4 ms·

> "This statement, however, is obviously untrue since, if one cares to move one's eyes slightly down the page at the Tax Policy Center web site, one will find t

by whack 10y ago

> "This statement, however, is obviously untrue since, if one cares to move one's eyes slightly down the page at the Tax Policy Center web site, one will find that 73.1 percent of all tax units (in 2015) do pay either federal income taxes or federal payroll taxes. In other words, plenty of people who don't pay the "income tax" pay taxes on income via the payroll tax. That income tax is assessed at a flat and regressive rate of more than 15 percent, once both worker and employer shares are included. (The employer share negatively impacts the employees' wages, of course.) In 2014, payroll taxes combined for a total of 34 percent of all federal revenues in 2014, or one trillion dollars. (Those who don't get a paycheck pay the aptly-named "self-employment tax" in its place.)" https://mises.org/blog/myth-half-americans-dont-pay-federal-taxes https://mises.org/blog/myth-half-americans-dont-pay-federal-...

toomuchtodo 10y ago
Income tax is not payroll tax! Income tax -> Federal income tax (discretionary spending) Payroll tax -> Social security and Medicare (non-discretionary spending) Everyone pays into entitlements via payroll tax. Not everyone pays into discretionary spending (everything except social security and medicare).
- MaysonL 10y ago
  Which is why the government borrows the SS and Medicare tax payments to use on other stuff and puts IOUs in the SS and Medicare trust funds.
  - toomuchtodo 10y ago
    The US government lends itself SS and Medicare funds because there is no safer asset class than US treasuries.
    - spinlock 10y ago
      Bullshit. The government bond traded for SS and Medicare funds is not sold on the open market. It has got zero to do with the risk free rate of return. The government can default on all SS and Medicare payments without affecting any bond holders.
      - toomuchtodo 10y ago
        TL;DR Bondholders can go to zero. Special notes will not. > The government bond traded for SS and Medicare funds is not sold on the open market. https://www.stlouisfed.org/publications/regional-economist/july-2010/flight-to-safety-and-us-treasury-securities https://www.stlouisfed.org/publications/regional-economist/j... "Government debt of the United States is typically issued in the form of U.S. Treasury securities. These securities—simply called Treasuries—are widely regarded to be the safest investments because they lack significant default risk. Therefore, it is no surprise that investors turn to U.S. Treasuries during times of increased uncertainty as a safe haven for their investments. This happened once again during the recent financial crisis. In fact, the increase in the demand for Treasuries was sufficiently large so that prices actually rose with an increase in the supply of government securities." http://www.cbpp.org/research/social-security/policy-basics-understanding-the-social-security-trust-funds http://www.cbpp.org/research/social-security/policy-basics-u... "The Social Security trust funds are invested entirely in U.S. Treasury securities. Like the Treasury bills, notes, and bonds purchased by private investors around the world, the Treasury securities that the trust funds hold are backed by the full faith and credit of the U.S. government. The U.S. government has never defaulted on its obligations, and investors consider U.S. government securities to be one of the world’s safest investments." https://www.ssa.gov/oact/progdata/fundFAQ.html https://www.ssa.gov/oact/progdata/fundFAQ.html "By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds. In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash." Special issues are literally more valuable than gold, backed by the taxing authority of the US government.
    - nocman 10y ago
      "The US government lends itself SS and Medicare funds" And that should have NEVER been legal. That money should have stayed in the funds. Any growth from those funds should still be in the funds. If they had not effectively stolen the money for other uses, those programs would not be in the mess they are in now.
      - toomuchtodo 10y ago
        The US government borrowing is how that money is invested. If you're upset it was all spent on wars and the military and not on productive uses, that's a governance problem; hold your reps accountable.

by whack 10y ago

toomuchtodo 10y ago

Income tax is not payroll tax! Income tax -> Federal income tax (discretionary spending) Payroll tax -> Social security and Medicare (non-discretionary spending) Everyone pays into entitlements via payroll tax. Not everyone pays into discretionary spending (everything except social security and medicare).

MaysonL 10y ago
Which is why the government borrows the SS and Medicare tax payments to use on other stuff and puts IOUs in the SS and Medicare trust funds.
- toomuchtodo 10y ago
  The US government lends itself SS and Medicare funds because there is no safer asset class than US treasuries.
  - spinlock 10y ago
    Bullshit. The government bond traded for SS and Medicare funds is not sold on the open market. It has got zero to do with the risk free rate of return. The government can default on all SS and Medicare payments without affecting any bond holders.
    - toomuchtodo 10y ago
      TL;DR Bondholders can go to zero. Special notes will not. > The government bond traded for SS and Medicare funds is not sold on the open market. https://www.stlouisfed.org/publications/regional-economist/july-2010/flight-to-safety-and-us-treasury-securities https://www.stlouisfed.org/publications/regional-economist/j... "Government debt of the United States is typically issued in the form of U.S. Treasury securities. These securities—simply called Treasuries—are widely regarded to be the safest investments because they lack significant default risk. Therefore, it is no surprise that investors turn to U.S. Treasuries during times of increased uncertainty as a safe haven for their investments. This happened once again during the recent financial crisis. In fact, the increase in the demand for Treasuries was sufficiently large so that prices actually rose with an increase in the supply of government securities." http://www.cbpp.org/research/social-security/policy-basics-understanding-the-social-security-trust-funds http://www.cbpp.org/research/social-security/policy-basics-u... "The Social Security trust funds are invested entirely in U.S. Treasury securities. Like the Treasury bills, notes, and bonds purchased by private investors around the world, the Treasury securities that the trust funds hold are backed by the full faith and credit of the U.S. government. The U.S. government has never defaulted on its obligations, and investors consider U.S. government securities to be one of the world’s safest investments." https://www.ssa.gov/oact/progdata/fundFAQ.html https://www.ssa.gov/oact/progdata/fundFAQ.html "By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are "special issues" of the United States Treasury. Such securities are available only to the trust funds. In the past, the trust funds have held marketable Treasury securities, which are available to the general public. Unlike marketable securities, special issues can be redeemed at any time at face value. Marketable securities are subject to the forces of the open market and may suffer a loss, or enjoy a gain, if sold before maturity. Investment in special issues gives the trust funds the same flexibility as holding cash." Special issues are literally more valuable than gold, backed by the taxing authority of the US government.
  - nocman 10y ago
    "The US government lends itself SS and Medicare funds" And that should have NEVER been legal. That money should have stayed in the funds. Any growth from those funds should still be in the funds. If they had not effectively stolen the money for other uses, those programs would not be in the mess they are in now.
    - toomuchtodo 10y ago
      The US government borrowing is how that money is invested. If you're upset it was all spent on wars and the military and not on productive uses, that's a governance problem; hold your reps accountable.