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It makes much more sense to just raise the social security tax cap than to means-test it. Means testing social programs tends to just add needless bureaucracy

It makes much more sense to just raise the social security tax cap than to means-test it. Means testing social programs tends to just add needless bureaucracy to them while also weakening support for them by adding an us vs them line of who benefits. Someone who makes 10 million dollars (or 100 million, or...) a year pays the exact same social security tax as someone who makes $176,100. You don't even have to raise the cap by very much to fix every foreseeable funding issue Social Security has

don_neufeld 1y ago
Yup. Means testing is one of this things that fools people - it sounds good, but in practice is wildly bad at what it’s trying to do, and can be borderline evil. Beyond the bureaucracy dimension - means testing puts up a barrier, not at the top, but everywhere. Adding “one more thing” to people who are already struggling can be disproportionally difficult for them to meet, and therefore cause them to miss out on benefits they are completely entitled to. Additionally, it can create incentives for behavior you would otherwise be completely pathological, such as divorcing your sick spouse because as a couple you don’t qualify for support, but individually they do.
- zimpenfish 1y ago
  > it sounds good, but in practice is wildly bad at what it’s trying to do, and can be borderline evil. The UK's DWP is a good example (and I'd suggest they crossed the border a long time ago into evil.) * https://www.bbc.co.uk/news/uk-england-merseyside-68727007 https://www.bbc.co.uk/news/uk-england-merseyside-68727007 * https://www.bbc.co.uk/news/articles/c20nrv02vz1o https://www.bbc.co.uk/news/articles/c20nrv02vz1o * https://www.bbc.co.uk/news/uk-england-leicestershire-67704644 https://www.bbc.co.uk/news/uk-england-leicestershire-6770464... * https://www.bbc.co.uk/news/uk-england-nottinghamshire-52500385 https://www.bbc.co.uk/news/uk-england-nottinghamshire-525003... * https://www.bbc.co.uk/news/business-51756783 https://www.bbc.co.uk/news/business-51756783 That's just a simple BBC search - going through Private Eye, for example, would bring up a lot more.
  - spwa4 1y ago
    Yeah the UK seems to be sprinting towards becoming a third world country with massive inequality just to protect the government's own spending power and of course completely accidentally, the wealth of the rich. There's "Gary's economics" discussing it, even though the usual economic comment somehow seems to escape him. (that would be "what about creative destruction" btw)
- FireBeyond 1y ago
  > incentives for behavior you would otherwise be completely pathological, such as divorcing your sick spouse We do live in the only country in the developed world where “deathbed divorce” is a thing to try to ensure your surviving spouse doesn’t get crippled by medical debt, so there is that…
- Aurornis 1y ago
  > Means testing is one of this things that fools people - it sounds good, but in practice is wildly bad at what it’s trying to do, and can be borderline evil. These non-specific appeals to emotion aren’t very convincing when we’re discussing a topic where we’re already collecting tax returns for the same people collecting social security.
credit_guy 1y ago
> Someone who makes 10 million dollars (or 100 million, or...) a year pays the exact same social security tax as someone who makes $176,100. You say this as it's some sort of injustice. But the guy who makes 10 million will collect the same benefit in retirement as the guy who makes $176,100. Or are you proposing that the guy who make $10 MM should pay more, but get their benefit capped? Because if that's what you are proposing, I don't see how that is just or fair. Except maybe following the argument along the lines "screw the rich, they can afford it".
- margalabargala 1y ago
  Social security is not a pension. It's more like insurance. It is designed to make life as a senior more equitable, not to stoke the egos of the wealthiest by ensuring they do not feel slighted by payments scaling to be larger than benefits above some certain income level. It is absolutely a "fair" and "just" thing for a society to do to itself.
  - s1artibartfast 1y ago
    I think you are confusing your wishes with reality. It is in no way like insurance today, and never has been. It has always paid out independent of circumstance. It was never about equity either - The poor get less, and the very poorest get none. Again, this is the way it has been since conception. It is a state mandated pension with low returns and a progressive fee. Noting more.
    - margalabargala 1y ago
      I think you misread. There's no "confusion of wishes with reality", we were explicitly discussing the not-reality that is wealthier people paying more and receiving less, and whether that is fair or just. My analogy to insurance was more about whether you pay into "your" account with your name on it or if you pay into a big fund directly pays out to recipients, and nothing is held aside for you.
      - 1y ago
cryptonector 1y ago
> Someone who makes 10 million dollars (or 100 million, or...) a year pays the exact same social security tax as someone who makes $176,100. Very few people earn that kind of money as taxable _income_. More people earn that kind of money as unrealized _capital gains_. Social security is paid for with a payroll tax and what amounts to an income tax. Once you're earning several times the cap you stop caring about it. If you earn 5x or 10x the cap then you will probably not be counting on social security, so there's no us-vs-them dynamic likely there. The problem is that to make this make a big different you'll have to hit hard those who earn only 1.5x or 2x the cap, and that's how you'd get an us-vs-them dynamic. Instead you can increase the retirement age, increase the cap, increase the tax rates, lower the COLAs, etc., and that's what we've seen so far.
- Spooky23 1y ago
  Very few people make a lot of money, it those who do make a shockingly large amount of it. There’s two drivers to the actual problem here… one is that wage growth slowed a lot since wage indexing and the yield on those taxes is lower in real terms. People who are making more make a lot more, and frankly that’s a well that needs to be tapped. The other is less popular… but we’re in wind down of nearly 25 years of conflict. The events of 9/11 were engineered to and succeeded in created the same type of economic attrition the US ultimately inflicted on the Soviets. We’re at a tipping point… our social insurance is approaching entirely avoidable cash flow insolvency. 25 years of war means that the military is worn out and needs trillions of investment to maintain parity. Ignoring the problems our strategies created brought us with a reactionary buffoon destroying the government and a fairly dim decade ahead.
deleted 1y ago
[deleted]
cameldrv 1y ago
I think younger generations are tired of getting a worse deal than older generations. If you means-test, some old people get less social security. If you increase the cap, working people pay more tax.
- breakyerself 1y ago
  "Working people"
  - cameldrv 1y ago
    i.e. people that are not retired and are doing a job to make a living.
    - breakyerself 1y ago
      The vast majority of working people wouldn't pay a penny more if the cap was lifted and the people who would be affected would still continue to enjoy a standard of living most can only dream of.

don_neufeld 1y ago

Yup. Means testing is one of this things that fools people - it sounds good, but in practice is wildly bad at what it’s trying to do, and can be borderline evil. Beyond the bureaucracy dimension - means testing puts up a barrier, not at the top, but everywhere. Adding “one more thing” to people who are already struggling can be disproportionally difficult for them to meet, and therefore cause them to miss out on benefits they are completely entitled to. Additionally, it can create incentives for behavior you would otherwise be completely pathological, such as divorcing your sick spouse because as a couple you don’t qualify for support, but individually they do.

zimpenfish 1y ago
> it sounds good, but in practice is wildly bad at what it’s trying to do, and can be borderline evil. The UK's DWP is a good example (and I'd suggest they crossed the border a long time ago into evil.) * https://www.bbc.co.uk/news/uk-england-merseyside-68727007 https://www.bbc.co.uk/news/uk-england-merseyside-68727007 * https://www.bbc.co.uk/news/articles/c20nrv02vz1o https://www.bbc.co.uk/news/articles/c20nrv02vz1o * https://www.bbc.co.uk/news/uk-england-leicestershire-67704644 https://www.bbc.co.uk/news/uk-england-leicestershire-6770464... * https://www.bbc.co.uk/news/uk-england-nottinghamshire-52500385 https://www.bbc.co.uk/news/uk-england-nottinghamshire-525003... * https://www.bbc.co.uk/news/business-51756783 https://www.bbc.co.uk/news/business-51756783 That's just a simple BBC search - going through Private Eye, for example, would bring up a lot more.
- spwa4 1y ago
  Yeah the UK seems to be sprinting towards becoming a third world country with massive inequality just to protect the government's own spending power and of course completely accidentally, the wealth of the rich. There's "Gary's economics" discussing it, even though the usual economic comment somehow seems to escape him. (that would be "what about creative destruction" btw)
FireBeyond 1y ago
> incentives for behavior you would otherwise be completely pathological, such as divorcing your sick spouse We do live in the only country in the developed world where “deathbed divorce” is a thing to try to ensure your surviving spouse doesn’t get crippled by medical debt, so there is that…
Aurornis 1y ago
> Means testing is one of this things that fools people - it sounds good, but in practice is wildly bad at what it’s trying to do, and can be borderline evil. These non-specific appeals to emotion aren’t very convincing when we’re discussing a topic where we’re already collecting tax returns for the same people collecting social security.

credit_guy 1y ago

> Someone who makes 10 million dollars (or 100 million, or...) a year pays the exact same social security tax as someone who makes $176,100. You say this as it's some sort of injustice. But the guy who makes 10 million will collect the same benefit in retirement as the guy who makes $176,100. Or are you proposing that the guy who make $10 MM should pay more, but get their benefit capped? Because if that's what you are proposing, I don't see how that is just or fair. Except maybe following the argument along the lines "screw the rich, they can afford it".

margalabargala 1y ago
Social security is not a pension. It's more like insurance. It is designed to make life as a senior more equitable, not to stoke the egos of the wealthiest by ensuring they do not feel slighted by payments scaling to be larger than benefits above some certain income level. It is absolutely a "fair" and "just" thing for a society to do to itself.
- s1artibartfast 1y ago
  I think you are confusing your wishes with reality. It is in no way like insurance today, and never has been. It has always paid out independent of circumstance. It was never about equity either - The poor get less, and the very poorest get none. Again, this is the way it has been since conception. It is a state mandated pension with low returns and a progressive fee. Noting more.
  - margalabargala 1y ago
    I think you misread. There's no "confusion of wishes with reality", we were explicitly discussing the not-reality that is wealthier people paying more and receiving less, and whether that is fair or just. My analogy to insurance was more about whether you pay into "your" account with your name on it or if you pay into a big fund directly pays out to recipients, and nothing is held aside for you.
    - 1y ago

cryptonector 1y ago

> Someone who makes 10 million dollars (or 100 million, or...) a year pays the exact same social security tax as someone who makes $176,100. Very few people earn that kind of money as taxable _income_. More people earn that kind of money as unrealized _capital gains_. Social security is paid for with a payroll tax and what amounts to an income tax. Once you're earning several times the cap you stop caring about it. If you earn 5x or 10x the cap then you will probably not be counting on social security, so there's no us-vs-them dynamic likely there. The problem is that to make this make a big different you'll have to hit hard those who earn only 1.5x or 2x the cap, and that's how you'd get an us-vs-them dynamic. Instead you can increase the retirement age, increase the cap, increase the tax rates, lower the COLAs, etc., and that's what we've seen so far.

Spooky23 1y ago
Very few people make a lot of money, it those who do make a shockingly large amount of it. There’s two drivers to the actual problem here… one is that wage growth slowed a lot since wage indexing and the yield on those taxes is lower in real terms. People who are making more make a lot more, and frankly that’s a well that needs to be tapped. The other is less popular… but we’re in wind down of nearly 25 years of conflict. The events of 9/11 were engineered to and succeeded in created the same type of economic attrition the US ultimately inflicted on the Soviets. We’re at a tipping point… our social insurance is approaching entirely avoidable cash flow insolvency. 25 years of war means that the military is worn out and needs trillions of investment to maintain parity. Ignoring the problems our strategies created brought us with a reactionary buffoon destroying the government and a fairly dim decade ahead.

deleted 1y ago

[deleted]

cameldrv 1y ago

I think younger generations are tired of getting a worse deal than older generations. If you means-test, some old people get less social security. If you increase the cap, working people pay more tax.

breakyerself 1y ago
"Working people"
- cameldrv 1y ago
  i.e. people that are not retired and are doing a job to make a living.
  - breakyerself 1y ago
    The vast majority of working people wouldn't pay a penny more if the cap was lifted and the people who would be affected would still continue to enjoy a standard of living most can only dream of.