Serious Entitlement Reform

Off Topic Politics and World Issues
21

[quote]dmaddox wrote:
…so you only have to save 10-20% of your income. Time Value of Money is incredible.[/quote]

Banking 8,000/yr on a 40,000 gross would be tough even in the low cost of living areas of the country.
I am not excusing anyone from saving and investing. IMO…we have a serious problem with people living beyond their means. Individuals that mismanage their finances/businesses/lives should not benefit for having done so. That is why lifetime earnings seems the most reasonable standard.

22

[quote]thethirdruffian wrote:

[quote]pittbulll wrote:
I don’t see why we can’t ween oil companies, coal producers , farmers and all other Corporations that get subsidies off.[/quote]

Name the subsidy that oil companies get. It’s a lie oft repeated.

I expect more from you.
[/quote]

Pitt you have been repeating this lie for about 5 years now…and your comment is the best you can come up with?

For shame.

23

[quote]BlueCollarTr8n wrote:

[quote]csulli wrote:

[quote]usmccds423 wrote:
I don’t see any reason why we can’t ween many Americans off certain benefits. I think SS should be pracically elinated over the next 50-100 years.[/quote]
I wish they’d get rid of it within a couple years. Those government nitwits should have slain that monstrosity long ago.[/quote]

Consider…
The median individual income is currently a little south of 40,0000 yr. Assuming they work for 50 years at 40/yr that’s lifetime earnings of 2 million. I believe it is estimated that one would need at least 500,000 [1 milliom seems a more common recommendation] for a secure retirement. The cost of living is ‘mild’ where I live by comparison and it would very difficult/impossible to save 25-50% of gross earnings and keep a roof over your head. If I earn 100,000 and live like I earn 50,000 it could be done, if you earn 40,000 there isn’t much room south of where your starting. It’s a tough problem and I see no leaders from either party that are up to the challange. The poor-house system that SS replaced was no better and cost just as much, if not more. [/quote]

Ya I agree with this, which is why I said many Americans and not all Americans. Retirement wouldn’t be as much of an issue if we didn’t over consume, but that’s a different discussion all together.

24

[quote]UtahLama wrote:

[quote]thethirdruffian wrote:

[quote]pittbulll wrote:
I don’t see why we can’t ween oil companies, coal producers , farmers and all other Corporations that get subsidies off.[/quote]

Name the subsidy that oil companies get. It’s a lie oft repeated.

I expect more from you.
[/quote]

Pitt you have been repeating this lie for about 5 years now…and your comment is the best you can come up with?

For shame.[/quote]

What lie is that ? I can not see through the tax code and neither can you . One article can not undo the press that covers to Contraire .

25

[quote]BlueCollarTr8n wrote:

[quote]dmaddox wrote:
…so you only have to save 10-20% of your income. Time Value of Money is incredible.[/quote]

Banking 8,000/yr on a 40,000 gross would be tough even in the low cost of living areas of the country.
I am not excusing anyone from saving and investing. IMO…we have a serious problem with people living beyond their means. Individuals that mismanage their finances/businesses/lives should not benefit for having done so. That is why lifetime earnings seems the most reasonable standard.
[/quote]

I saved more than that when I made that and live in the Boston area.

Tis utter bullshit it can’t be done.

I have money in my savings from when I made 13k a year at a liquor store while in college.

It really isn’t that hard.

26

In other news, we are sending 60 Million to the Jihadist rebels in Syria! Yippee, but how many teachers are getting laid off for that exchange?

27

[quote]BlueCollarTr8n wrote:

[quote]dmaddox wrote:
…so you only have to save 10-20% of your income. Time Value of Money is incredible.[/quote]

Banking 8,000/yr on a 40,000 gross would be tough even in the low cost of living areas of the country.
I am not excusing anyone from saving and investing. IMO…we have a serious problem with people living beyond their means. Individuals that mismanage their finances/businesses/lives should not benefit for having done so. That is why lifetime earnings seems the most reasonable standard.
[/quote]

I agree.

28

[quote]countingbeans wrote:

[quote]BlueCollarTr8n wrote:

[quote]dmaddox wrote:
…so you only have to save 10-20% of your income. Time Value of Money is incredible.[/quote]

Banking 8,000/yr on a 40,000 gross would be tough even in the low cost of living areas of the country.
I am not excusing anyone from saving and investing. IMO…we have a serious problem with people living beyond their means. Individuals that mismanage their finances/businesses/lives should not benefit for having done so. That is why lifetime earnings seems the most reasonable standard.
[/quote]

I saved more than that when I made that and live in the Boston area.

Tis utter bullshit it can’t be done.

I have money in my savings from when I made 13k a year at a liquor store while in college.

It really isn’t that hard.[/quote]

I always like your posts and agree with the majority of your positions. I suspect there is information about your situation you are not revealing.
25 and single, shouldn’t be a problem…35 with kids may be a little different. Again, I’m not excusing the choices people make, but IMO…you are stretching the bounds of reason a bit.

29

[quote]countingbeans wrote:
[/quote]

I am interested in your opinion about the article itself…??

30

[quote]BlueCollarTr8n wrote:

[quote]countingbeans wrote:

[quote]BlueCollarTr8n wrote:

[quote]dmaddox wrote:
…so you only have to save 10-20% of your income. Time Value of Money is incredible.[/quote]

Banking 8,000/yr on a 40,000 gross would be tough even in the low cost of living areas of the country.
I am not excusing anyone from saving and investing. IMO…we have a serious problem with people living beyond their means. Individuals that mismanage their finances/businesses/lives should not benefit for having done so. That is why lifetime earnings seems the most reasonable standard.
[/quote]

I saved more than that when I made that and live in the Boston area.

Tis utter bullshit it can’t be done.

I have money in my savings from when I made 13k a year at a liquor store while in college.

It really isn’t that hard.[/quote]

I always like your posts and agree with the majority of your positions. I suspect there is information about your situation you are not revealing.
25 and single, shouldn’t be a problem…35 with kids may be a little different. Again, I’m not excusing the choices people make, but IMO…you are stretching the bounds of reason a bit. [/quote]

13k in college it was 4 of us splitting rent on a house…

The 40k was really 42k, I had an auto 10% go to my 401k and put another 10% in my rainy day fund. One kid and my wife at the time who brought home 33-ish, our rent was 1,700, let alone any other bills. We’ve since spent all but 4-6 months of living expenses on a house, had another child and I make quite a bit more than 40k.

In all fairness, maybe I am pushing it a little. We seem to agree in principle, that many people make poor choices involving their money, I see it every day at work. BUt my larger point being, it really isn’t that hard to save for retirement if you can be a little more selfless and a little less selfish.

31

[quote]BlueCollarTr8n wrote:

[quote]countingbeans wrote:
[/quote]

I am interested in your opinion about the article itself…??
[/quote]

I’m a huge fan of means testing, but not on lifetime earnings.

My problem with life time earnings are:

  1. Lifetime earnings does not show an ability to pay, assets in hand does
  2. Will affect people’s risk tollerance, and we need people to take risks
  3. completely shafts small business owners, and puts pressure to structure their ventures in a way that maxs out taxable income, which is just crazy talk
  4. SSI pretty much is already based on lifetime earnings

As for medicare, I don’t have an issue raising the rates 1-2%, just space it out over 5-10 years. So increase .1% a year.

I was thinking, and this is a baby idea but what if they allowed people to opt out of the employee portion of SSI (employers still paid theirs) and instead that 6.2% of your pay would buy TBills? Sloves some of the “china borrowing” problem, and should net some return on your money. (However SSI is really a great return, you get back the equivalent of 10’s if not 100’s of times what you put in.

32

[quote]countingbeans wrote:

I was thinking, and this is a baby idea but what if they allowed people to opt out of the employee portion of SSI (employers still paid theirs) and instead that 6.2% of your pay would buy TBills? Sloves some of the “china borrowing” problem, and should net some return on your money. (However SSI is really a great return, you get back the equivalent of 10’s if not 100’s of times what you put in.
[/quote]

I love this idea. I would prefer to take my money and make more money with it. If you live long enough SSI does pay you a ton of money at little to no risk. If you die early you get nothing and your heirs get nothing. I would prefer to pass a lot of my SSI to my heirs, because I will not need it myself. I look at SSI payments to me in the future as being nothing more than Friday Night Pizza money.

33

[quote]countingbeans wrote:
We seem to agree in principle, that many people make poor choices involving their money, I see it every day at work. BUt my larger point being, it really isn’t that hard to save for retirement if you can be a little more selfless and a little less selfish.
[/quote]

Yes we do. There is no excuse for not saving, it’s saving enough.

34

[quote]countingbeans wrote:
I was thinking, and this is a baby idea but what if they allowed people to opt out of the employee portion of SSI (employers still paid theirs) and instead that 6.2% of your pay would buy TBills? Sloves some of the “china borrowing” problem, and should net some return on your money. (However SSI is really a great return, you get back the equivalent of 10’s if not 100’s of times what you put in.
[/quote]

I have no issue with ideas like this.

35

[quote]countingbeans wrote:
I’m a huge fan of means testing, but not on lifetime earnings.

My problem with life time earnings are:

  1. Lifetime earnings does not show an ability to pay, assets in hand does
  2. Will affect people’s risk tollerance, and we need people to take risks
  3. completely shafts small business owners, and puts pressure to structure their ventures in a way that maxs out taxable income, which is just crazy talk
  4. SSI pretty much is already based on lifetime earnings
    [/quote]

Yes…like many approaches ‘lifetime earnings’ has it’s short commings, but it seems reasonable that a persons ‘potential’ to save must be factored in some how. Help me understand your #3?

36

[quote]BlueCollarTr8n wrote:

[quote]countingbeans wrote:
I’m a huge fan of means testing, but not on lifetime earnings.

My problem with life time earnings are:

  1. Lifetime earnings does not show an ability to pay, assets in hand does
  2. Will affect people’s risk tollerance, and we need people to take risks
  3. completely shafts small business owners, and puts pressure to structure their ventures in a way that maxs out taxable income, which is just crazy talk
  4. SSI pretty much is already based on lifetime earnings
    [/quote]

Yes…like many approaches ‘lifetime earnings’ has it’s short commings, but it seems reasonable that a persons ‘potential’ to save must be factored in some how. Help me understand your #3?
[/quote]

Running short on time, if you still don’t get it let me know and I’ll expand when I have more time.

As it is now, I can set up an entity that has huge losses for tax and nice EBITA gains. I can take distributions against the debt. Which means I can take cash out and it isn’t income for tax return purposes. It is essentially return of capital at that point, even if my capital account goes “negative” because the recourse gives me basis. (The debt is the recourse).

Under the changes, I won’t want to do this, I would want to bring my money out after showing income on that entity. So I wouldn’t care about my EBITA, but only my bottom line, and would want that to be positive, not too far positive because I don’t want to earn myself out of SSI, but I need enough income to qualify. (This also means I would want to call this income SE, which adds 15% to my tax bill.)

So I’m going to end up, over my lifetime paying more in taxes.

37

[quote]countingbeans wrote:

[quote]BlueCollarTr8n wrote:

[quote]countingbeans wrote:
I’m a huge fan of means testing, but not on lifetime earnings.

My problem with life time earnings are:

  1. Lifetime earnings does not show an ability to pay, assets in hand does
  2. Will affect people’s risk tollerance, and we need people to take risks
  3. completely shafts small business owners, and puts pressure to structure their ventures in a way that maxs out taxable income, which is just crazy talk
  4. SSI pretty much is already based on lifetime earnings
    [/quote]

Yes…like many approaches ‘lifetime earnings’ has it’s short commings, but it seems reasonable that a persons ‘potential’ to save must be factored in some how. Help me understand your #3?
[/quote]

Running short on time, if you still don’t get it let me know and I’ll expand when I have more time.

As it is now, I can set up an entity that has huge losses for tax and nice EBITA gains. I can take distributions against the debt. Which means I can take cash out and it isn’t income for tax return purposes. It is essentially return of capital at that point, even if my capital account goes “negative” because the recourse gives me basis. (The debt is the recourse).

Under the changes, I won’t want to do this, I would want to bring my money out after showing income on that entity. So I wouldn’t care about my EBITA, but only my bottom line, and would want that to be positive, not too far positive because I don’t want to earn myself out of SSI, but I need enough income to qualify. (This also means I would want to call this income SE, which adds 15% to my tax bill.)

So I’m going to end up, over my lifetime paying more in taxes.

[/quote]

Maybe employers would be exempt because they have to pay both halves of SSI. This would only apply to W-2 Incomes.

38

[quote]dmaddox wrote:

[quote]countingbeans wrote:

[quote]BlueCollarTr8n wrote:

[quote]countingbeans wrote:
I’m a huge fan of means testing, but not on lifetime earnings.

My problem with life time earnings are:

  1. Lifetime earnings does not show an ability to pay, assets in hand does
  2. Will affect people’s risk tollerance, and we need people to take risks
  3. completely shafts small business owners, and puts pressure to structure their ventures in a way that maxs out taxable income, which is just crazy talk
  4. SSI pretty much is already based on lifetime earnings
    [/quote]

Yes…like many approaches ‘lifetime earnings’ has it’s short commings, but it seems reasonable that a persons ‘potential’ to save must be factored in some how. Help me understand your #3?
[/quote]

Running short on time, if you still don’t get it let me know and I’ll expand when I have more time.

As it is now, I can set up an entity that has huge losses for tax and nice EBITA gains. I can take distributions against the debt. Which means I can take cash out and it isn’t income for tax return purposes. It is essentially return of capital at that point, even if my capital account goes “negative” because the recourse gives me basis. (The debt is the recourse).

Under the changes, I won’t want to do this, I would want to bring my money out after showing income on that entity. So I wouldn’t care about my EBITA, but only my bottom line, and would want that to be positive, not too far positive because I don’t want to earn myself out of SSI, but I need enough income to qualify. (This also means I would want to call this income SE, which adds 15% to my tax bill.)

So I’m going to end up, over my lifetime paying more in taxes.

[/quote]

Maybe employers would be exempt because they have to pay both halves of SSI. This would only apply to W-2 Incomes.[/quote]

That would significantly change my opinion of using life time earnings in the calc. Such as some sort of multiplyier or whatever for years spend self employed/employing others.

39

[quote]countingbeans wrote:

[quote]dmaddox wrote:

[quote]countingbeans wrote:

[quote]BlueCollarTr8n wrote:

[quote]countingbeans wrote:
I’m a huge fan of means testing, but not on lifetime earnings.

My problem with life time earnings are:

  1. Lifetime earnings does not show an ability to pay, assets in hand does
  2. Will affect people’s risk tollerance, and we need people to take risks
  3. completely shafts small business owners, and puts pressure to structure their ventures in a way that maxs out taxable income, which is just crazy talk
  4. SSI pretty much is already based on lifetime earnings
    [/quote]

Yes…like many approaches ‘lifetime earnings’ has it’s short commings, but it seems reasonable that a persons ‘potential’ to save must be factored in some how. Help me understand your #3?
[/quote]

Running short on time, if you still don’t get it let me know and I’ll expand when I have more time.

As it is now, I can set up an entity that has huge losses for tax and nice EBITA gains. I can take distributions against the debt. Which means I can take cash out and it isn’t income for tax return purposes. It is essentially return of capital at that point, even if my capital account goes “negative” because the recourse gives me basis. (The debt is the recourse).

Under the changes, I won’t want to do this, I would want to bring my money out after showing income on that entity. So I wouldn’t care about my EBITA, but only my bottom line, and would want that to be positive, not too far positive because I don’t want to earn myself out of SSI, but I need enough income to qualify. (This also means I would want to call this income SE, which adds 15% to my tax bill.)

So I’m going to end up, over my lifetime paying more in taxes.

[/quote]

Maybe employers would be exempt because they have to pay both halves of SSI. This would only apply to W-2 Incomes.[/quote]

That would significantly change my opinion of using life time earnings in the calc. Such as some sort of multiplyier or whatever for years spend self employed/employing others. [/quote]

Most business owners are natural savers, but not all. W-2 income earners are naturally risk averse so saving is more difficult. W-2 income earners want immediate gratification while business owners know that to make money you must invest with some level of risk with a long time horizon.