So my federal marginal tax rate goes from 35% to 49.x%?
Goodbye sixty hour work weeks and squeezing that extra patient in at 6 pm! Since the Democrats plan to take more of my family's Ife savings with higher income taxes, higher capital gains taxes, higher Social security taxes, and a wealth tax, and also lower my income with M4A... nah, I think I'll just retire. That way I can lay off my office manager, and my nurse; also my housekeeper, and my yard service, since I'll have the time to do those jobs myself. More time for cooking at home, less eating out; I'll let the Thai place down the street know we won't be needing them as much next year.
Yes, this should all work out well for jobs and the economy.
2
As someone who supports President Trump and supported his re-election, this article is great news.
And this is why I will vote for Trump.
1
Income and wealth belong to The People. No one should have wealth. Everyone should work hard. Maybe small change for spending at commissary once the month.
And how many jobs will you provide?
no thanks !
I've paid my fair share and more for 40 plus years
3
As a high-income earner, I don't mind paying my fair share of tax, but I'll have a huge problem with it if they decide to raise taxes on me before raising taxes on companies like Amazon, FedEx, Chevron, Netflix, Aramark, GM, and other multi-billion dollar corporations that paid ZERO taxes last year.
11
During the last four months of the year my husband and I have higher take home pay because his salary exceeds the social security cap and we don't pay Social Security taxes. We're far from being millionaires, but we do just fine in the 8 months of the year in which we pay social security taxes with plenty to save, travel, and build up our savings for a home. All in the high cost area of Westchester Co. NY! We'll continue to be a-okay even if we have to pay the same amount in social security taxes all year long. If you earn enough for this to affect you, you're going going to be just fine!
4
I'll agree to this if the military budget is cut by 80%. I don't work this hard just to pay taxes for military spending.
3
What about a donut hole? Impose a social security tax on the first $125,000 of income, and then nothing more unless/until income exceeds $225,000. Anything over that amount would be subject to the social security tax.
1
One issue that needs attention is the taxation of all income, from whatever source derived, for Social security not just the first $118 or whatever the new cap is.
Additionally, a hard look at deductions and exemptions. Second home mortgage interest deductions are a good example. Tax ALL income as ordinary income such as dividends, interest, “accrued interest”, and many others. Bring justice and true equality to the skewed tax code.
1
Very few rich people play polo. The game seems more international, as the upper-classes from, not just Britain, but the gulf states and South America play. Class, while co-related with wealth, is not the same thing. Owning a polo pony and polo kit is expensive but this is not as expensive as owning a yacht or a high-end sports car. And the cynical view is that people pick up the game to get their kids into college. Polo on campus - like squash - recruits from wealthy domestic families, poor kids in specialized programs - they exist - and international students. So if you are looking for the back door into Stanford, Cornell or Virginia, this game might be the ticket.
I will not shed tears for high earners that may pay more in taxes. How much does one need to have a comfortable life? You can only eat and drink so much. You can only sleep in one place, or drive one car at a time. I am not jealous of those who can afford vacation trips, multiple cars, and more than one house. But the super rich are so disconnected from reality, they cry when they lose a small fraction of income to taxes, that would be enough for a low wage earner to at least have the basic benefits of life. The sad part is that high earners live at the top of an income pyramid, which is built on the backs of those at the bottom.
2
I'd appreciate y'all saving Social Security, thanks. It is scheduled to go bust the year I retire.
2
I have observed for a long time the great reduction of taxes once earnings go over the Social Security threshold. I would never hear it discussed. It is time this inequality is stopped.
3
Social Security is a bedrock of our national approach to retirement and needs to be solvent. Democrats however need to carefully consider two matters. First the entire tax burden that people confront -- which involves, Federal and State income taxes, property taxes, Medicare, Social Security, Sales as well as fees paid. There is a serious tipping point where the push back will be strong. Second, in the spirit of Jamestown where all who benefit must contribute, progressively adding to the taxes of all even the lowest paid (it need only be a dollar or two a month) would go a long way toward easing the pushback.
Where I live, $250,000 pre-tax for a family of four means the lifestyle commonly known as "the working poor" - unless you are lucky enough to have inherited a sufficiently modest, fully paid-off property.
6
I'm a 1%-er. I don't mind being taxed more during my productive years to pay into the system, but I'm not crazy about the idea that my final payout will be lower. You can argue that I should be putting away money for retirement (and I am), but life is uncertain and any extra cushion is welcomed. This wouldn't stop me from voting Democrat under any circumstances, I just don't find this plan attractive, and I worry that too many moderates or the sliver of Independents out there will find this really unattractive.
3
eliminate the cap on SS taxes (it should have been done two decades ago)...keep the cap on the deductibility of state and local taxes (or eliminate them entirely), and keep the new, higher standard deductions...double (or more) the income levels that determine if one pays taxes on SS benefits (they have not changed with inflation for a quarter of a century)...
5
I've long believed that the wage limit should be raised but if I were running for president, my proposal would be for a tax rate of 11% (5.5% for wage earner and 5.5% for the employer) but with a limit of $300,000. To close the loophole on income through S corps, I would propose the same treatment as for partnerships and that all income would be subject to SE tax.
Politicians don't seem to understand that the higher a tax rate is, the more likely people will work to get around paying it.
2
This would affect me as I stop paying into SS by mid-June, when I've hit the limit. I'd be thrilled for this to be implemented. It's fair, as my high income is a result of working hard (true) but also a result of being the beneficiary of all sorts of advantages that I didn't earn - like having educated parents, being white, being a native citizen, and being healthy. I also chose a career (law) that pays particularly well, although I could have chosen one (teaching) that requires just as much education but doesn't pay anywhere near as well. I am happy to share my good fortune.
Yes, yes, yes. Vote this into law.
6
The assumption about inequality is that all people who are making greater than $250,000 have always made that much. After working my whole life, I finally achieve this level, only to see that it was for nought. I need to aggressively save for retirement to make up for decades of low pay, student loans, childcare, etc. An extra $200 a month from Social Security will not even come close to making up how much I will lose.
11
The US has become a nation of don't touch my stack as the old song goes. 50% of Americans live marginal economic lives. When they get old or sick they sink lower. The GOP focuses on resentment. The resentment comes from decreasing control over ones finances. They have dried up. The GOP is only interested in harnessing them to vote for such sympathetic types like Trump. With the minimum wage the GOP argue that raising them would harm small business. So the minimum wage languishes as a pittance. The GOPs chief bugaboos are the earned income tax credit and expanding health care coverage to the 50% of Americans languishing in debt without adequate health care.
3
I don't "enjoy" my high income. I earned it -- by putting myself through grad school and professional school. I don't mind contributing more to the system to make it more stable, but I do mind if I'm just dumping in more money to give it lower-income people without any additional benefits coming my way.
11
My wife and I make about $200,000 and pay SS and Medicare on all $200,000 because we both make about the same. Sure, we both will get 'full benefits' when we retire, though, this is quite marginal for the amount of extra tax we pay compared to if one of us earned 200,000 and the other quit their job.
Anyways, as a professor in engineering married to a professional spouse (with an advanced degree) who works in private industry, I laugh at this idea that I am supposed to sympathize for the 'working professionals' that make over $250,000 if they have to pay SS tax again on their over 250,000 a year earnings. We are talking mostly about the top few grades of executives at this point, doctors that own their own private practice, and lawyers that are partners in high-flying law firms. Most hard working professionals max out at 150-200K a year in earnings --- A lot of those that do crack into the 250Ks and higher do so only temporarily, or can do so via positions of family prestige (corporate connections) or wealth (i.e. doctors that can access the capital to form a private practice vs doctors that can barely get their debts paid off)
Now that being said, I think SS/medicare should move to a flat tax rate on ALL income (including capital gains) or into the general progressive tax system, and we stop seeing it like a 'benefit plan' and more like the public poverty amelioration program it is truly meant to be.
3
The problem is that Social Security now provides the only retirement plan for a substantial portion of workers in the US, and it will get worse as the baby boomers retire or can no longer work. If you do not refinance Social Security somehow (perhaps not as much as is being discussed), you are throwing the aged either into other subsidy plans, also financed by our taxes, or into the streets. The payroll taxes for Social Security are matched by the employer, it is a rational and effective program for providing security for the aged that has worked well for a long time.
If you want to preserve tax benefits for the highly paid, rescind the Republican elimination of federal tax credits for the professional and technical workers in blue states. As we are finding out under Trump, the tax payers have no control over how that money is spent.
3
This article would have been more interesting and more balanced if the author had discussed both Democratic and Republican proposals to "fix" Social Security. Raising the cap on earnings subject to FICA doesn't solve the entire problem, but neither does the GOP proposal to raise the retirement age (in essence reducing benefits).
So both parties need to cooperate and take potential criticism in order to put the trust fund on more solid financial footing. Shouting "Democrats want to raise your taxes!" doesn't help public discussions any more than hissing "Republicans want to cut your benefits!".
On a personal note, I've never had a problem paying taxes on my (relatively) high income, particularly after growing up in an environment where raising our own food was the only way my mother and father could feed us, in addition to Dad's two jobs and Mom's part-time work. As long as a combination of increased payroll taxes and higher retirement age help fix this issue and benefit those who really need it -- meaning, society ends up better off -- then I'm all in.
5
I recently read two articles that point out how the rich game the system to avoid taxes (legally!).
First, I read that Jeff Bezos "only" takes a salary of $50K from being CEO of Amazon. Second, I read that the capital gains tax rate is dependent upon the "wages" the person is paying - if you have income of less than $34K, then your long term capital gains tax is 0%; at Bezos's income, his rate is 15%. Amazing that we have this loophole built into capital gains income.
Before really hiking the FICA rates based upon income only, we should just declare capital gains income as self-employed income - if corporations can shift their workers to a "gig economy", ie, contract workers who have to pay their own FICA, then the rich or trust fund types should have to pay FICA on their capital gains also. No way an executive like Bezos should get away with just paying FICA on $50k, when he just cashed in $1B worth of his stocks, probably at a 15% rate. Stop the rich from gaming their taxes legally!
2
@Dave S You don't understand how capital gains are taxed. They are taxed based on your income level PLUS the amount of cap gains. So, fear not, Bezos was taxed at the full 23.8% for his $1B in cap gains, meaning he only was allowed to keep 87 cents on the dollar for his investment. If he lived in California he would be taxed a total of 36.8%. Don't worry, the rich pay a lot in taxes. Its the fact that almost half the country pays no income tax that is the problem.
2
There was a time when people would be offended if they thought they were taking welfare or charity. That time seems to have passed. By all means, let’s convert social security to an income transfer welfare program.
3
The debate of whether those who make $250K are rich or not is not the issue. The more pressing problem is whether those folks are willing to pay more taxes. If not, they will NOT vote democrat. Can we afford to lose their vote? Don't make it hard for those folks to vote Democrat. The alternative is Trump. A second term for Trump will be a death nail in our democracy.
The revenue gained by taxing this group is so small that it is not worth losing their vote.
The priority in dealing with inequality should first target those corporations who pay ZERO taxes (eg. FedEx) and the ultra-rich billionaires.
1
This is a good point.
Democrats have said for years: if you make less than $250K, your taxes will not go up.
Many people went to college and graduate school - often taking out large loans - on the expectation that they would eventually earn around this much and face this tax regime. Telling them now to “pay their fair share” while receiving less will not go over well.
If you change the rules now, some of these people will no longer vote blue.
1
"""For those making millions of dollars and living in a high-tax location like New York City, the combined marginal tax rate — including federal income tax, Medicare and Social Security tax, and state and local income tax — would be about 63 percent.""
And thank you. Except when we go back and check total taxation rates, I think we will find that the marginal tax rate for those making far less than millions will be shockingly high. As long as we all can see the math and have a vote, so be it.
I also support raising the social security cap from its current level to $175,000 at this time. Removing the cap entirely is too big a jump for me...but this is just my opinion.
At the end of the day, our federal government is broke, permanently indebted, and needs to take money from a larger percentage of the population than 50 million dollar estates and billionaires. So this is just an entree for governmental survival really. I'm OK with that reality because the alternative is a larger problem. But in exchange, we really need far better fiscal controls and management on the federal side of the public sector...and a whole lot of eliminated positions that don't substantially contribute to the whole.
3
@Mark It is a spending problem not a revenue problem.
During the Bush years the Alternate Minimum Tax (AMT) was instituted on anyone making over $157,000 which capped certain RE deductions and increased tax rates for these people. To some that seemed like a lot of money at the time. Trouble is that it was never adjusted for inflation and as result I was paying proportionality higher taxes on my middle class income. So when they advocate for taxing the rich, eventually it will be the middle class who will pay, since the rich have various ways at their disposal to avoid these taxes and there won't be sufficient revenues generated from them to pay for these extravagantly costly programs the dems advocate.
6
I'll grumble and complain, but if the result is medicare for all, affordable college, and a solvent social security system that's still around when I'm old enough to collect, then I'll do it.
2
250k is not considered rich when you've taken out 200k in medical school loans (this is not considered abnormally high. Most medical schools are at least 50k/year) and only started working after residency at the age of 30. On 250k salary, monthly take home is about 6300. Average rental cost of a 700 sq ft apt in manhattan is $4300. 6300-4300 = 2000. Then you need to remove monthly loan repayment on your 200k 30 yr educational loan, which is about $1000/mo, so you're working with about $1000 for food, travel, children's expense, medical etc. Your average manhattan doctor is not "rich" in any sense of the word. But, hey, lets go ahead and tax that person another $7000/year, that makes sense. If you want to dis-incentivize studying all of your life to achieve and serve your fellow man, especially in big cities, this is the way to do it. And no, its not so easy to pick up and move somewhere else when you've just started establishing your medical practice..
10
I think medical school should be free. We need more doctors, and if doctors were not saddled with ridiculous medical school debt, maybe they could afford to live in parts of the country underserved by the current medical establishment. We need doctors, and it’s ridiculous that we have a system that penalizes our best and brightest for seeking out that profession. Doctors who earn a lot will pay end up paying it back in future taxes. (No, I am not a doctor or married to one).
...so? They’ll still be wealthy, yeah? It’s not like they’ll suddenly need the food bank.
I am salaried in LA making good money. But I now pay over 50% in total non discretionary taxes--Income, SS, Medicare, CA income, property, cap gains. I am doing my fair share and will not vote for anyone who raises my taxes more, even though I have been a Dem all my life. I am done.
12
Let's see where Paul Krugman and others weigh in on, first of all on the numbers. After all, if Mr Irwin has a problem distinguishing between 83% and 17% ( x and 1-x?), his analysis starts off a little shaky.
More seriously, how about giving us the median and average of the "high income earner" ? By focusing on the floor proposed earnings 250K-400K it looks like Mr. Irwin is setting up the scenario of educated professionals in highest cost of living areas taking a hit on what could be considered middle class earnings. This injects an undeserved bias. If we took for example, a 700K income in Boston, higher taxation to aid in needed social programss would stand out clearly as making sense.
I thought the poor, unskilled, uneducated immigrants, with big families, legal and illegal were upposed to pay all our social security and Medicare costs. Are you telling me that's not going to happen? Wow. I wonder what other left wing fantasies aren't true?
7
I am not willing to work to keep less than 50% of my earnings. I will work up until that point and then scale back. After that you can find some other sucker to staff your ER, detect early cancer, and perform life saving procedures.
10
@Robert Y So, you will create an opportunity for another to work, great!
Respectively, I think this is actually the best argument for high marginal tax rates, and why the US had good economic growth and equal wage gains up until high marginal tax rates went away. I see nothing wrong with a system that encourages high earners to take a step back at some income level and allow someone else to rise to the opportunity to work and earn more. Better to pay 4 people 200,000 a year to share a workload vs pay someone 800,000 to hoard the work and income, in my opinion. Our system is too rewarding for those in positions of control with regards to work/income to reap as much work/income for themselves as possible.
Don't lose site (because it seems you have) that there are hundreds of thirsty hard working people that would love to have the opportunity to detect early cancer, perform life saving procedures, and staff your ER and are every much as capable of doing those things as you.
1
@Jim, I think your collectivist zeal has overtaken your common sense. People who can staff ERs, provide early cancer detection and perform in skilled health care jobs are generally not unemployed nor are there hundreds of them looking for work. (To-wit, see the articles about the staffing shortages at the UK’s NHS). If the docs, PAs, nurses etc start cutting back, our system will suffer. Yes, there are real world consequences to government policies
@Jim Doctors have already scaled back due to, among other things, increased gov regulation, decreased federal reimbursement, higher taxes. There simply are not 3 or 4 doctors waiting to take the place of a doctor that cuts back (attorneys maybe). The employment rate for doctors that want jobs is probably close to 100% already.
Barack Obama was a master of stealth income redistribution. Whether a populist version of same can become the law of the land remains to be seen. In any case, the disingenuous “2 cents” mantra is now being discussed, and discredited. Progress for progressives.
4
There ought to be a cost living offset for these federal taxes. High incomes come from working in places where the costs are higher, so taxing income uniformly creates a disadvantage for high income/cost states.
5
Social security is very popular, but the way money is raised to pay for it is regressive and has kept getting more regressive as income gains have skewed to the very rich. Why should there be any cap on income subject to SS tax? Why should only "earned" income be taxed and not rents, royalties, capital gains, etc? The answer that eliminating income caps would break the tie between amounts paid into SS and benefits received rings hollow. Benefits CAN be raised for people who pay in more while providing most of the increase to low income beneficiaries.
One way to keep benefits related to the amounts paid in, while still helping people of less income & wealth more is through progressive taxation of SS benefits. That already happens to some extent in the current system, in which a portion of benefits are taxed depending on your total income (SS benefits + other income). Two things may be needed to make it work: (1) Legislation that tax revenue received on SS benefits be plowed back into the SS Trust Fund so it's available to pay benefits (if that does is not already mandated). (2) The current formula for taxing SS benefits should be tested against projections of what new SS benefits for higher income people are expected, and the formula adjusted as needed to generate enough funding for increased benefits for ALL recipients, especially those with little or no income aside from SS.
Slightly off-topic, but in my view the two most impactful and least objectionable changes that could be made are:
1) Double (or more) the IRS budget, and as per Willie Sutton--focus on auditing where the money is.
2) Treat all income equally. Income resulting from speculation is neither more honorable, nor more "vital to the economy" than wage income. In fact, wage income tends to be spent while capital gains are often compounded, or should we say, hoarded.
Certainly, a lot more tweaking would be necessary for a tax system which is more progressive AND produces enough revenue to make a start on long-overdue funding of SS, health care, housing, education, infrastructure, day care, etc. We might also consider devoting some resources to increase the chance of our planet still being habitable 100 years from now.
1
High income person in California here. Not looking for any sympathy but I will say dems ought to be careful - even my coastal elite, hyper-liberal peers here in San Francisco are quietly balking at the Warren/Bernie tax proposals... might be a canary in the coal mine for the rest of the country.
The tax situation in CA brutal - high earners pay 13% state on top of federal of 37% and it's no longer deductible (thanks Trump!), so marginal tax rates are over 50%. In return we get the worst schools in the country, crime-riddled cities and our power doesn't stay on.
The notion that the federal government is going to raise my taxes further to subsidize people largely in low-tax red states drives me crazy. Crazy enough to move to one of them...
10
@Joe
I'm from one of the red states that, depending on whose numbers you believe, gets more than they put into federal taxes. I still pay the "magic" 50%+ total rate personally. The democrats have long proposed redistribution of wealth from high to low incomes, but that's not what is happening. Capital gains and the carried interest tax rate are both far less than what people who work for a living pay. What we are doing in this country is taxing the shriveling middle and upper middle class to subsidize the top and the bottom. California for example has 12.5% of the country's people and 35% of its welfare recipeients. That's not an accident. Welfare is a decent paying job in California, but somebody has to pay the taxes to fund it. In idaho we have a high percentage of millionaires because lots of Wall Street types come here and buy a ranch with the money they save paying only 20% on their incomes in taxes. They then write their "hobby ranch" off. Obama had both houses in 2009, nothing changed. Trump said he'd get rid of it, it's a little harder but it's still there. Want a fair tax system? tax ALL income, from work, dads trust fund, stocks, hedge funds, all of it the same.
2
@Joe Wait you say your a good liberal but then object when Trump limits your tax deductions?!? Sounds more like you like liberal policies unless you have to pay for them.
Sure, tax the wealthy, but for crying out loud, corporations SHOULD PAY TAXES.
5
ALL of them should pay more. Poverty, in this country, should be clearly redefined, way beyond the current 1970's standards. Every citizen is entitled to food, shelter, education, and health care. These are basic human needs and rights, regardless of the "character" of the person in question. The rich will pay for it, because they can. Simple. All this whining, among the very well-to-do, is nauseating. Taxation is not a punishment, it's an opportunity to give back to the country that made you prosperous. I WANT to pay a $million dollars in taxes. Imagine what I will have left. Lucky me.
3
@ChesBay The simple answer is about 50% of the country pays no income tax and even gets cash back. That is unsustainable. The top 3% pay over 50% of the US income tax. Guess what, they are tired of paying for everyone else. At the very least, require everyone to pay something so they feel part of the system. As it is now, too many people get a free ride.
1
This article fails to ask a crucial point. Why is social security solvency failing? Social security was designed on a self sustaining model where what people were paid out was tied to what they paid in, as the article acknowledges.
And yet here we are. There is no upper limit on the waste, corruption, and ineffectiveness of government spending. It's not that the government lacks funds. It's that the government routinely wastes literally billions of dollars at every level from our local government with failed initiatives like Thrive NYC which squandered $800 million to the military with huge contracts for largely useless vehicles and weapons that will never do anything more than line the pockets of firms like Lockheed Martin.
No one should have an effective tax rate above 49.9%. Anything above that is a fundamental assault on private property.
5
@Jon P
The average social security/Medicare recipient, depending on the status (married, single two incomes etc) get back between 10 and 40% more in benefits, after inflation, than they paid in. It's a Ponzi scheme that has always depended on way more workers than retirees to pay in. The fact that infinite population growth in a finite country is impossible never occurred to the guys who set it up.
3
Oh, those poor, abused high earning professionals may have to chip in some more to help the less fortunate. Why, they may not be able to afford that beach house, or the beemer. What a tragedy.
2
@Pde $250K in a western coastal state is middle class for a family of 4. An extra $7K in taxes is almost $600/month. That's real money.
The cap on the payroll tax should be removed. This would insure the solvency of Social Security and reduce poverty. But this should include reducing the overall payroll tax rate to ~10% for example (5% for the employee and employer). This would give most people, their employers and the self-employed a tax reduction. People who can afford it would continue to pay 5% above 128K.
At the same time reform the rest of the code and expand the brackets. Currently, the top 37% rate kicks in at an AGI of $510,000 (single) but should be more like 2-3 million. Very wealthy individuals have much lower rates because their income comes through investments, stocks and non-payroll sources. Increase the capital gains tax to match payroll income tax as Warren Buffet suggests, but in a tiered fashion also up to 37%. The higher your annual income, the higher the capital gains rate. Now THAT would encourage keeping money invested in the economy.
Also rescind the Republican corporate tax cuts. These cuts will eventually crash the economy and are egregiously unfair allowing corporation to skirt paying any federal taxes on profit.
We can revise the tax code to be fairer, cut out unnecessary spending, invest in health and education for all Americans and bring the federal budget back into balance. It’s just math. If the rich don't like paying more into the very system that enables them to be rich in the first place, maybe they would prefer top rate of 90% under Eisenhower.
3
@Michael
"Now THAT would encourage keeping money invested in the economy."
High capital gains taxes means people don't take capital gains and that means money is inefficiently tied up in the economy rather than redeployed. So, in other words, the exact opposite. I would love to sell stocks and investments but don't because of the absurd high tax rates of capital gains (over 33% state and federal) so I keep investments going even though I would rather invest in other things but just take tax free loans against it instead.
"Also rescind the Republican corporate tax cuts. These cuts will eventually crash the economy and are egregiously unfair allowing corporation to skirt paying any federal taxes on profit"
Now you lost me. Corporations pay tax on profit. Your statement is simply not true.
My family falls into this category. We would gladly pay more as this tax goes directly to helping people who need it. I think it’s a great idea because of that! There’s (hopefully) no siphoning this off to fund military, for-profit prison, corporate welfare or other similar wastes.
The problem, if there is one, is the change, as people organize their expenses and commitments around expected earnings. Phasing in a tax increase like this over 3-5 years would make a big difference to a lot of people.
And taxing investment income as well? Sign me up.
5
First, we have to get rid of all the tax exemptions and loopholes. Start with a clean slate and use a fair, graduated tax that everyone pays. If we keep the loopholes, all these extra taxes are for naught. And we need to keep corporate tax low, else they'll leave for Ireland or other tax-friendly countries.
Very misleading and convoluted article that appears to incite fear of additional taxes. The author moves from individuals making $250K, then $300K then "millions per year" to arrive at his inflated total taxes, including the employer portion of Social Security. The author doesn't explain his math or show the cumulative calculation or break it down by income level, as the current tax code does. Not helpful in showing that the vast majority of American taxpayers, those making less than approx. $130K per year, the current Social Security cutoff, will not be affected.
5
@FrankM The article was pretty clear. Its math. Its not hard. Its also understood that the more employer taxes on employees means less salary for employees.
For federal income tax purposes, as well as social security taxes, income can be classified into "earned income," which is generally wages and self-employment income, and subject to social security taxes. And, "unearned income" which consists of interest income, capital gains and loss income, rental income and retirement income; all of which are not subject to social security taxes.
In 2019, the amount of funds expended in social security benefits now exceeds the amount of money collected via social security taxes. Currently, with an overall annual trillion dollar federal deficit, the social security deficit too cannot continue to add to the federal deficit in perpetuity. A hike to cover the social security program is coming; either from raising the taxable wage category or broadening the types of income classified as "earned," or taxable, under the social security system.
As the percentages of annual national income from wages have shrunk and that due to interest income, capital gains, rents, and retirement income have grown, a change in the social security system's method of collecting taxes or paying benefits is needed to restore an economic equilibrium.
[11/22/2019 2:18 pm Friday Greenville NC]
2
You state that higher social security taxes will support
everyone equally but this is not true. If we look at the longevity data it is quite obvious that people with money live longer than the lower income beneficiaries thus collet benefits longer.
6
I make 3x more in the private sector for the same work than I made in the public sector. Same skills, same degree. Would I be willing to give that up if I could get health care and education for my kids?
Of course. The whole idea that 60% of my income goes towards security to the exclusion of 95% of my fellow citizens is ridiculous.
I'm not working for a fancy car or a boat. I'm working for education and health care.
I understand that people are frustrated that they will be subsidizing "less hard working people". However, I'm willing to help out a few lazy people to ensure that our teachers, our janitors, our social workers, yes waiters, waitresses, and daycare providers who also work long hours, our mail carriers, and nurses, everyone in the working class, has health care.
Their children should also be able to earn college through academic merit and not just loans.
Yes, I'm totally willing. but then, I don't think that poor=lazy. In fact I've seen quite the opposite.
78
@L -- Thing is, you won't really have to give up anything to get the health care. M4A will cost $trillions less than what we currently pay for private health insurance, (who gouge and cheat) and it will be so much better! When was the last time you heard ANYONE say they LOVED their private health insurance? Never? Improvement to our other domestic requirements will need some higher taxation, but if we stop spending 8 to 12 times more, on defense, than the next countries on the list, stop bribery of politicians by industry lobbyists, and spend more wisely, we can fulfill our wildest dreams. What's more, the rich will STILL be filthy rich, the gap will just be smaller, and our consciences will be clear, as we fulfill the long promised American dream for everyone. We will finally be who we say we are, instead of lying to ourselves about how great this country is. It WILL be great.
6
@L
I appreciate your logical, unprejudiced presentation of facts, why the poor are SO poor and the rich are SO rich.
Only fairer, moderately greater progressive taxation can do some necessary justice to this system.
Some, moderate economic inequality is acceptable. But since the Reagan era inequality has been rising far too much. We don't need a revolution as Bernie Sanders advocates. But we do need economic justice.
6
@ChesBay -- Polls show that 70% of Americans want M4A. Interesting that NYT and its readers don't seem to support the idea. I'd love to know why. It can't be that they don't understand how it would work. It must be some kind of class bias that means they believe there are people who don't deserve health care, which means they don;t deserve to live. Also, a total lack of civic responsibility--somebody else pay for it, not me. Lovely.
1
If it means Sheldon Adelson and the Waltons @ anteing up, say, $50m a year more in taxes, I am willing to pay $10k more a year in taxes.
3
The one fundamental fact that very few leaders or Americans understand and accept is that there is no social security trust fund. That misconception, perpetrated by politicians on both sides has obscured the reality of the actual financial condition and health of all entitlement programs, especially social security and Medicare. Even center-right analysts mention the trust fund expiring in 2041 or worse 2034. They point to social security payments exceeding FICA tax revenue next year and so requiring the government to use the “trust fund”. Problem is there is no fund, at least as most of us would define it, a pot of money to be used to pay benefits. What exists are assets in the form of US government bonds - but bonds are NOT cash. They have to be redeemed for cash. Sine we are running $1 trillion budget deficits, where does the cash come from? You got it - more borrowing. And there is the fraud-and now both Trump and the Dems want to expand benefits. Both sides are guilty of malfeasance in their management and communication of this problem to the American people.
2
You should teach in RI. Most teachers in RI retired when they were 52 years old, with 3% COLA pensions, at the same time making $90K a year, and the schools are horrible, class sizes are very small It is illegal for muni teachers in RI to go on strike but they do anyway. Property taxes are very high. I know many public school teachers in RI, they worked 1/3 the hours I work as a computer professional, with great benefits, and most teachers in RI will collect over $1 million on Pensions before I ever see a dime of Social Security.
4
Hmm, seems kind of lose-lose for D voters here.
(1) If the Rs are in charge, they will very specifically punish you by raising the taxes you pay (SALT cap).
(2) If the Ds are in charge, they will very specifically raise taxes on dedicated D voters because they know those folks will reliably turn out at the polls for them anyway.
There may be other people who should also pay their fair share for society's safety nets (uncommitted occasional R/occasional D voters), but anyone who taxes them will lose elections. Thus the TCJA pass-through deduction -- Ds will never dare touch it due to how many uncommitted R/D voters it rewards.
1
Although I could not produce evidence, I would be willing to bet that the wealthiest Americans pay nowhere NEAR the 60% tax you mention. When you are that rich, you employ people to hide your money from the government.
We need an overhaul when Democrats get in the White House again - I read awhile back that FedEx paid NO income taxes in 2018 and isn't funding pension plans any longer for new workers. The Chairman and CEO, Frederick Smith, will take home over $15 MILLION in total compensation this year.
Meanwhile, my 72 year old sister-in-law who is retired from teaching has had to go back to work part-time in order to meet her bills and put money away for unforseen emergencies (like a new stove, fixing the heating system, etc.)
I struggle to understand how Americans think this is OK. Many will push hard for Republicans to stay in power. I cannot think of one thing this administration has done for the lower or middle class. It's all about the rich. Their philosophy is "The best way to help the poor is not be one of them".
2
@JG This administration demonstrably lowered taxes for the middle class. And has presided over incredible job growth. Avoided getting into any new wars.
A couple thoughts:
Paying more taxes is fine if you actually get more benefits and services, like healthier citizens and vast improvements in our infrastructure.
At any rate it sounds in the article like they're talking about FICA taxes, which despite the fact that I earn well over what would normally be affected, it won't hit me because I'm technically a state employee doesn't pay social security taxes in lieu of a state pension system.
1
Being a Social Security beneficiary and paying attention to details, it must be stated that when you are eligible to collect there is a sneaky little provision that up to 85 per cent of benefits are taxable depending on the amount of other income. In my case it is deferred income from pensions and investment income. So high income retired individuals are not going to see all that much of their SSA benefit after taxes. Just be glad you're rich, and be happy (or maybe just resigned) to be returning some wealth to the commons. It's really a good thing.
5
3
I do not like paying taxes anymore than the next person. It is difficult to work as hard as I do and feel like I don’t get to take home all I’ve earned. However, I also realize that I benefit from the services I receive when I drive down the road, use my local library, and enjoy the security of knowing there is a fire department and police/sheriffs’ department to ensure my safety. I don’t have children in school, but I’ve utilized public colleges to obtain the education I required to have my career. Someday, I hope to get my Social Security check and Medicare. After all, I’ve paid a lot into those programs.
I did not benefit from the 2017 Tax Reform Act. I lost the SALT deductions that kept our budget together. As a matter of fact, as a Californian who owns a home, I had to write a check to the IRS despite the fact that I increased my withholding last year in anticipation of a higher tax bill. I am not feeling inclined to pay more taxes for money I have earned by working at a physically and mentally demanding job. Until multimillionaires and billionaires pay more in taxes on passive income that they earn from investments and inheritance, I do not believe I need to pay more. The same is true for corporations such as Amazon, Microsoft or Starbucks who pay little or no taxes.
Fix that situation before coming after me and my family.
8
Today the top marginal tax rate is 37%
From the '50s - '70s the top federal tax rate never fell below 70%. America prospered, and invested in infra-structure. Does the Interstate Highway Project ring a bell? .
Despite conservative claims that taxing the wealthy hurts the economy, economic growth has often been better when taxes were higher on the rich.
3
@HapinOregon It was actually as high as 92% like AOC likes to say but they never tell the whole story such as everything was deductible, credit card interest = deductible, car loan interest = deductible, tax shelters were numerous, so the effective tax rate was only minimally higher than today.
“[Elizabeth Warren] will provide a $200 immediate increase in benefits across the board for every current and future beneficiary — the biggest increase in benefits in nearly 50 years.”
There's no other way to describe this - it's a breath-taking attempt at vote-buying.
While what to do about seniors in financial difficulty who have nowhere else to turn is indeed a legitimate issue for discussion, I would suggest that the many Social Security recipients who do not need another $200 per month should also be part of the conversation.
--------------
A personal data point:
We were a pair of DINKs when I stopped working at a very early age. I was earning right at $100,000, and my wife was earning substantially more. At the time, we lived in Speaker Pelosi's district.
In the early 1990s, the marginal rate on my first $60,000 of income became 63.9% - that was 39.3% Federal Income Tax, 9.3% California State Income Tax, 12.4% FICA, and 2.9% Medicare. The latter two were double what an employee would pay in payroll taxes because I was self-employed.
All that is fair-enough, and I have no complaints. I stepped aside, and someone else stepped into a role that would otherwise not have been filled by me. It's almost certain that the people who followed me in the jobs I would have been doing in the future paid substantially less than the taxes I would have been paying had I continued in my profession.
1
@BayArea101
The last point was simply to point out that we can't be certain of the results that major policy choices will produce. In our case, higher taxes made my choice to stop working in my mid-40s while at the top of my profession a very obvious one. I never looked back.
Cry me a river.
1
By counting the portion of the social security tax paid by employers as something paid by employees (saying that "economists believe are ultimately borne by workers" - an iffy statement), this article misrepresents the amount of tax individuals will pay if the cap is lifted from social security deductions from paychecks. Even under Warren's plan, the tax on the employee would be 7.4%, not 14.8%. Regardless, it is a change that is long overdue if the the social security tax is supposed to pay for the social security program for all Americans and give them a livable pension. Increased social benefits such as federal health insurance, better social security benefits and other items on a liberal agenda should be paid for by everyone who has the means to shoulder an increased share of the cost . Plans to increase taxes on only the highest earning 0.1% to pay for increased services (health, education, retirement) are unrealistic. A wealth tax on the richest Americans will accomplish some of the money raising for increased services, but no doubt not all, and, like our European counterparts who have a more comprensive social safety net and services than we do, we need to increase taxes on everyone who is wealthy, even moderately so.
1
Proposals to increase taxes fail to recognize the effect of removing the SALT deduction which was a HUGH tax increase to the high tax democratic states. You start adding up NYC and NY taxes which become flat taxes at higher income levels which combine to 12.7% with no break for capital gains, 12 or 13% social security and medicare tax, and a 37% federal rate plus sales and property tax will further encourage the migration to lower tax states and the loss of critical brain power, such as medical specialists.
1
Wasn't Moody's one of the rating agencies that gave tripple A ratings (AAA) to mortgage bonds back before '08?
2
Would much rather restructure capital gains taxes to increase them eventually to the regular rate, and add them to the SS fund if needed, but I am willing to take the hit because it would be pretty foolish in the long run to keep shafting poor folks just because the rich have the power to do so. Given the way wages work today for the average or below worker, they are simply not going to be able to get ahead enough to have any other way to stand a chance of retiring at some point. Sure, you can always work the suckers to death if that is your ethnics, looking at you libertarians, but that is not the way I think society should treat people.
2
@Steve ...of course not...and then people complain why the "French Revolution" occurred..!!
1
Social Security was created to give hard working people retirement with dignity. Today it has become a income supplement for high income earners as they receive the majority of the benefits. If we really wanted to return the program to its purpose not only would we remove the cap, we would means test. My recommendation would be to reduce the qualifying income $ for $ above some amount - say what we use as a cap today. So anyone who makes 2x the $138k or $276k in a year would have no qualifying income for benefits but the tax would continue to be charged.
1
Bring it on! The rich should not get their money for free. Fair shares for all. No one needs $100K or more. Tax away all wealth above $100K and give to The People!
1
@Fred Why don't we print a trillion for everyone?
1
This is just one of those scare tactics used by the Super -Rich empowered White majority...I always try to put a conversation like this with one example:
There is a police issuing tickets for speeding on a hidden road trap:
The first one fine- ticket is for a super rich guy in a Lamborghini. he makes a take home pay of 100Thousand per week. He gets fined 200dollars for speeding.
The second guy fined drives a BMW600 and takes home 5thousand per week. He gets fined 200 dollars for speeding.
The third guy fined drives a Hyundai and takes home 500dollars per week.
Who do you think the system penalizes more, or is it equal justice..? I rest my case about Taxation for the common guy..You can apply that to any other of the endeavors that we all go in life, like Education, Healthcare and the like...How do you think Finland/Norway and other progressives Nations Tax the super-rich..?
1
If I may I would suggest a payroll tax revision less "aggressively," which would have less opposition from the rich, while benefiting the working poor and increasing the social security trust fund modestly/moderately:
First for the working poor, CUT payroll tax, say to 1% each for employers & workers each on the first $10K, and to 2% on the second $10K. This will help small businesses also; small businesses often fail.
Lift the cap but cut payroll tax on both employees and employers to 1% or so beyond say, $250K.
Such a less aggressive, relatively seamless measure would be most helpful to the working poor & startup small businesses and it would stimulate the economy. Very few high income folks would strongly object to it, while extending social security solvency.
People tend to have a tendency to go overboard with anything they focus. As examples, the ever-increasing cigarette tax, which I think is too high, while gasoline tax is TOO LOW - I am a nonsmoking driver. Another ever-increasing tax, which hurts the poor far more than the affluent, is sales tax.
2
The upper middle class is the monkey in the middle. We need two incomes to afford to live in Los Angeles, but we are penalized by the marriage penalty, no deductions, and the highest marginal income state tax rates of any state. Depends how and what one calculates, but we pay 30-40% in taxes while corporations and billionaires pay near zero. Neither the Dems nor the GOP has done anything about this known inequity for decades,and these are proposals to make it worse for higher income professionals. The tax cuts went to the top. The poor quite rightly pay little but the upper middle often pays the highest percentage in fact.
8
High-income professionals need to realize that they are in the same boat as people of more modest incomes on a lot of issues, regardless of the seductions of extreme wealth to convince them otherwise.
There is no real economic security as long as your health insurance relies on your employer, or Social Security's continued existence is threatened. Watching relatives and friends suffer from lack of resources while you are able to stay affloat is also not a treat, as anyone that's moved aging parents into their home or protested at the cost of their kids' schooling can attest to.
Even if moderately wealthy people pay more taxes, they will be better off in an overall system that manages these costs and risks through appropriate funding.
2
Taxes shouldn't be increased at a specific income level. I think we are all aware that the cost of living in some places is much higher than in other places. It would make more sense for taxes to be linked to cost of living. An income of $250,000 in DC, New York, Connecticut, or California would not be excessive. In my city, it would be an excellent income.
6
I'm not endorsing one single dollar in higher taxes for myself until FedEx, Amazon, et al are forced to pay at least one single dollar.
6
So we would have the highest marginal tax rate in the world and still have poor health and social benefits. We either must have a huge nonproductive class in this country, paying for a military to police the world or the government is squandering our tax dollars.
4
Until there is a geography prong to tax rates, the code will always be lopsided and selectively regressive. $250K a year would make one fabulously well to do in small town middle America, but would literally be subsistence living in many cities. And it's nobody's fault that cities are so expensive, and people are not blame worthy for being born in a city. So explain to me why people in middle America are entitled to live on an estate and have savings left over, while people in cities are left in apartments in shaky neighborhoods. Or they move out and have a 45 minute commute so that their housing expenses drop to only $80K or so a year, then get dinged for hardly being around to raise their kids.
If the goal is to tax the "Rich" then by all means let's tax lavish lifestyles. Absolutely have high tax brackets for high earners; it's only fair. But allow all people to deduct their SALT payments, student loan payments AND the price of average housing costs from their income, and pay the higher tax rate on the rest. The federal government has used cost of living allowances in pay and benefits for decades. Not including the same matrix in the tax code is nothing more than another hidden hand out to the disproportionate political clout of conservative states.
4
If you want to live in your silo, your going to have to pay. You want the benefits of a large city? Well so do a lot of people. That drives the price up. It’s basic economics—supply and demand. The Taxman cometh for you. If you don’t like it, move out. You can’t have it all and a subsidy from the Central Government too.
You could just as easily spin this the other direction and say that people who earn more than 132k are now enjoying a tax break, but it might be revoked.
Why should earnings above 132k be privileged more than earnings below 132k?
3
If 62% of women will be living on social security as their only means of income that means women will be affected significantly by having 200. a month more in SSI. That means many of your moms. This article sounds to me like it was written to undermine Warren and Bernie. The article is helping to scare people into not voting for the kind of change this country really needs.
1
I am so traumatized by current events that I can barely speak. I will say one thing; In the 1950's the highest tax rate was up to 90% but everyone thrived. So, why won't that work now? Social Security tax should not have an earnings limit, and high wage earners should pay their fare share.
2
@Nancy Have you ever thought that there were other things different in the 50s than just the tax rates?
@DL Yeah. The earnings were more evenly distributed and corporations actually paid taxes instead of getting subsidies.
Yes, we had STAKEHOLDER capitalism then, not shareholder capitalism.
Warren and Sanders are living up to the stereotype that liberals have never seen a tax that they have not loved. Under Warren and Sanders, too many Americans would be burdened with confiscatory taxation.
A Warren or Sanders nomination for the presidency will guarantee four more years of Donald Trump. Hopefully reason prevails and the Democrats nominate a moderate more representative of the American electorate.
6
"Blue" states have long put far more into the government than they have received whil the reverse is true for almost all "Red" states. These tax plans would just accentuate that.
4
being in the impacted category, this is fine with me, so long as the taxes on those with even more money are even higher
1
This is actually a great idea but here’s an even better one. Do not collect any FICA tax on the first $50,000 but don’t just stop at $250K. Have no ceiling. If you make $5 million, you pay FICA tax on all of it. You can afford it. It’s the people on the bottom who cannot.
5
Me thinks that the most equal way to thread the needle of government need for money is to tax stock trades and portfolio gains.
Me thinks also that Soc Sec should be morphed into a fund, like Singapore's Central Provident Fund, that allows for individual control of their funds, that can be used for healthcare, housing, education, and any other social good (like non-processed foods). Doing this is the best way I can see to empower people and in some cases it could even be used for reparations.
Social Security is insurance against poverty, either in old age or disability.
1
This plan is ridiculous! The Dems have lost my vote for sure. To be honest about $200K household income is even not that much in the greater Buffalo area (Just moved here). It does not certainly make me rich. I know other readers will castigate me for saying this. But this is the truth. It is may be (slightly) upper middle may be.
Both my wife and I work very hard to get to this in a place like Buffalo since the jobs are not that plentiful (mostly 50-60 hours a week). This is to just to maintain our jobs.I am 41. And then there is constant pressure/tension of we being replaced by H1B workers (And the Dems are unwilling to take action here).
Our take home pay is around $100K, after all taxes and deductions (this is a high tax state and can't deduct SALT). We pay $12k in health insurance premiums for the family plan. And $12K (total) for 401K. As far expenses are concerned, we have a mortgage of $400K (nothing fancy,but nice in a good school district) and a 20 year mortgage (at 41 can't afford longer terms). Total payments for this including property taxes and maintenance etc. comes to $4K/month. Car payments (2 cars, no public transport here) another $1k including insurance. Child care and another expenses $1.2K. All other expenses like grocery/gas/clothes/things for kids $1.5K. Charity contributions and support to parents (occasionally) another $0.5k. Total monthly about $8-8.5K per month or about $96k-$102K.
Where is the money to contribute more? How can we do this?
7
You are brutally rich. Pay you taxes. Don’t complain.
1
@Fred
$100,000 in Bryn Mawr is worth $48,500 in Buffalo, on that basis, people making 121,250 in Brwyn Mawr are brutally rich and should be subject to the same amount of extra tax.
The issue isn't whether we should support SS and each other, we should. The question is how do we do it fairly, and that requires a more complex discussion.
Being rich isn't about what you make at any given time, its about what you make over a lifetime, whether you have deferred compensation, whether your parents helped you or let you live with them, what your financial investment is in your occupation, where you are forced to live to make the money you make. If someone goes to college for 4, 8 or more years, they have reduced earnings, or no earnings, for those years, plus they are making a financial investment. In addition, they are not saving during those years and are losing the value of compounding over the long haul and people's investment returns over a 20 year span are significantly affected by which 20 years you look at. Being able to buy a house earlier in life, because of not going to school, being able to live at home or getting a small amount of parental support can also deeply impact ones wealth.
And there are even more variables.
Maybe we should do more to cap CEO salaries and make corporations be responsible citizens. Otherwise, let's figure out who really is rich.
5
You all do realize that every SS $ is spent in entirety every month
Only the 1% save it
Any spare change we living solely on SS can gather, will expand our economy
Save SS and save USA!
3
Why should anyone earning under the cap of $137,700 dollars be subject to payroll taxes on 100% of their income BEFORE deductions when someone with wage income of $275,400 only owes payroll taxes on 50% of BEFORE deduction income? All income, not just wage income should be subject to payroll tax BEFORE DEDUCTIONS!
5
I don't mind paying more Social Security tax to assure the solvency of the program and to give seniors living on fixed incomes a much needed boost. I believe it will be a great deal easier to sell this to the upper middle class if we first implement a wealth tax and then move to tax capital gains at the same rate as earned income.
The bottom line: I'm happy to pay my "fair share," so long as I am confident that all those who are wealthier than I are doing likewise.
6
Excellent idea. Eliminating the cap on Social Security/Medicare contributions is essential to the preservation of those programs, and it is inherently fair. Why should lower income earners pay a larger percentage of their wages than high income earners?
4
While I would be affected by a higher social security tax max, I see that as an acceptable cost to live in a civilized country. Many Americans are unable or unwilling to save for retirement. They are protected by social security, which not only sets money aside but keeps it from being harvested to line the pockets of financial barons. I don’t want to spend my affluent retirement living in a country that fails to protect the majority of low income citizens from destitution in their “golden” years.
4
Why praytell if social security is an annuity will the benefits for high earners also be capped at the higher amounts? I am already paying more for Medicare with IRMA for the crime of making a six figure high tech salary. I am also taxed (a second time) on my earned social security benefits. Where is the fairness? The least the government can do is remove the cap on social security payouts so that high earners who contribute more can receive greater benefits.
2
This proposal is actually easier on high wage professionals than it should be. A cap on Social Security wages is ridiculous, regressive, and should have been eliminated long ago. The fact that it hasn't is one reason average workers view our system as elitist. I say, get rid of any cap on wages subject to Social Security and Medicare. Now.
3
I'm trying to figure out the article's claim that applying FICA taxes to investment income would reduce investment, as government would have more to invest in our suffering infrastructure.
2
Do you know what $7400 is to a household that makes more than $300k/yr?
An auto lease payment. So they will not have a SECOND Porsche 911, Ranger Rover or Mercedes S550. Actually it's less than a lease payment because some of these vehicles cost $1000 A MONTH ($12,000 A YEAR) to lease.
Oh, boo-hoo.
The SS system is underfunded badly enough that they will have to start CUTTING benefits in 2034 (that's only 15 years from now).
The younger generations have paid their payroll taxes like all those before them and they DESERVE to collect the benefits they PAID FOR. All the change in taxes will do is fully fund a system that had been shorted since 1986.
3
Neil Irwin, your statement, “they owe nothing on earnings above that level.” Is INCORRECT FACTUALLY. 3rd paragraph in today’s print of your story.
You say that the social security payroll tax is 12.4% for income up to $132,900. And then you say they owe nothing on earnings above that level,
That is FACTUALLY INCORRECT There is a Medicare tax (ok technically it’s not social security but it’s still a payroll tax and you should have said that) of 1.45% on ALL earnings, no cap (thank you various 4 administrations of both parties).
Furthermore, anyone collecting social security who makes over a certain amount and it’s not a huge amount, gets hit with multiple IRMAAs... those are income related Medicare adjustments
Welcome to retirement and too bad if you saved your money. You will be penalized.
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Neil Irwin: Why is it when the system redistributes money from the middle class to the rich like it has been doing for the past 40 years, it's ok because it's "just capitalism". But when the system redistributes money from the rich to the poor it's socialism?
4
The real killer are self employed professionals who has to burden the entire social security cost themselves they dont split with a employer
7
We should raise these taxes. But really the baby boomers shouldn't have put us in this position. Now we have to prop them up. They should be ashamed.
3
"Moreover, the Warren and Sanders plans would apply Social Security taxes to investment income for the first time, not just to earnings. That would make it harder for high-income people to avoid taxes by reclassifying their labor income as business income. "
Given 799 "Comments" as I type, I cannot determine if someone has jumped on the inconsistency in this statement. Investment income is not business income. If in some way it is, someone please explain.
1
@Zeke You can't make interest unless you make enough money to sock away a very significant chunk of it into investments. This is not the working class couple with $5,000 in their savings account at 1%, but people with stocks and bonds who get actual, measurable returns. In other words, the wealthy. It is income. The tax is an income tax.
2
How come there's no discussion on means testing SS? Boomers sitting on a $5 million nest egg are surely in a better position to absorb a decrease in SS benefits than Xers and millenials are in absorbing increased FICA taxes.
5
I say it is very fair, most people on SS have worked for most of their lives and deserve a decent retirement. I say raise the cap higher it would not hurt the 1% much and help the people who need it the most. The idea of cutting SS benefits is just plain unfair and wrong. In addition, I say increase the benefits for the people who need it most, after all, they worked most of their lives and deserve a decent retirement, it is just fair.
2
I'm a beneficiary, having contributed to Social Security for over half a century (!) - and am glad of having paid, because what I now receive is an important part of my income.
Social Security is one of the best ideas we ever had - another, of course, being the National Parks system - and both are under attack by the current administration, which does not seem able to let anything good alone.
We should get together to shore up Social Security. Best would be to raise the current contribution cutoff level enough to guarantee that the system will stay solvent - but not so much as to provide more ammunition for those who would dismantle it.
4
The Brookings Institution just released a report that shows that the city in which I live will be the 16th most affected city by AI replacing most metro area jobs, including those held by higher educated and income earning individuals. Everyone seems focused on every little tidbit proposed by the most liberal candidates of the democratic party. Perhaps, people should look at the past behavior of those candidates for signs of how well they will represent the interests of the majority. The 1% increased their income and wealth each by 5% in the past generation (15% carried interest tax rate on that income). The next 19% only had a 1% increase in income, but achieved an 11% increase in wealth, which will evaporate in a downturn if held in securities, personal residences when the 1% buys up more at rock bottom prices. The middle class had the greatest decline of wealth--even greater than the decline in their earned incomes--but both the very highest of all categories. The working poor (bottom 20%) still just treading by as always. Don't remember where I saw this graph. But the writing is on the wall for all of us who are not part of the controlling capital class nor have them as our customers. They will exert even higher leverage over the latter, too. We need to reduce the amount of power the very wealthy exert through their oligopolies.
2
I hope the Democratic nominees read these comments.
$250k in the metro NY area or San Francisco is not a high income for a family of four. Let's make sure that those with salaries over $500k and corporations are paying their fair share of taxes before we hit the middle class again. $250k is middle class in these areas.
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@FLF While I am sympathetic, the median salary in NYC is $74K. The median salary in SF is $94K.
$250K isn't middle class anywhere. The best hope for NYC and SF residents would be to vote in politicians who will ease the roadblocks to development. SF is the worst example, NIMBY uses environmental laws and zoning reviews to slow down or halt development (which raises construction costs and also increase the value of existing housing stock). The beneficiaries are existing home owners.
Rather than linking tax policy to geography, a better limiting principle would be to allow people who work hard and achieve success to be able to keep the majority (meaning more than 50%) of their earnings on the marginal dollar.
5
@James , the thing that mystifies me is why people who claim they make the most money because they're so educated and skilled cannot move because apparently they won't find an equivalent job elsewhere in the country where it's less expensive to live.
Equivalent income no. Equivalent or better standard of living, yes. All the claims that the rest of the country is a giant cesspool is propaganda.
This reads like a translation from an American Enterprise Institute white paper, meant to scare upper-middle-class voters into rejecting the progressives' proposals. Mr Irwin, you need to be more upfront about your stories' sources.
Mr Irwin does give the other side's view in the last few paragraphs, but it's a half-hearted statement.
As other commenters have pointed out, the Fairfield polo player's brother, who is a middle class bus driver headed to retirement, will suffer Social Security cutbacks in the 2030's unless the program is fixed. What does the American Enterprise Institute suggest we do about that? Do they have a white paper?
3
I remember the astonishment of liberals how the hillbillies of the hinterland vote Republican, much against their self-interest. This article shows how the coastal (avocado) toasters would do exactly the same thing. However, it clarified for me who to vote for in 2020. In my own self-interest, Republican!
5
I have no problem paying higher taxes, as long I know the state is really making an effort to make the USA an equitable state for all. If Switzerland can do that, so can America: healthcare for all, affordable education for all, food security for all, roof-security for all, no foreign wars, respect for all nations.
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Oh lord...these leftist wealth redistribution schemes are nothing more than punishing successful individuals under the guise of compassion for lower income strata people.
Social Security and Medicare are the two biggest Ponzi schemes the world has ever seen.
I'm a middle class retiree, and I disapprove of Socialism, which is what these plans are.
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@MJN - Then, as a retiree, I'm sure you do not collect Social Security or Medicare, right?
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@MJN , tax rates at the top have DECLINED by ONE THIRD since the 1980s. You were saying?
1
It is a joke to compare the proposed tax burden of the Democrats plans to the current burdern or to four years ago. Under Reagan the highest Federal rate of tax paid by the professional class was 50%. The rich (myself included) have had our relative tax burden decrease for decades with no consequences except higher deficits and higher inequality. If the increase in taxes will pay for so0cial distribution rather than war, then tax us till our pips squeak, or at least as high as in the Reagan era.
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My headline would have been: Boomer generation proposes higher income taxes just as boomers go into retirement in order to fund solvency of welfare system that boomers raided.
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In order to fund all this stuff we could easily cut military spending just by a bit and then bring back the corporate taxes that Trump got rid of and not have to raise taxes on middle class people.
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@Biz Griz , given the size of the deficit, that doesnt cover the bills. Why not do all of the above? Fake growth driven by asset bubbles is why we keep having market crashes. It's getting old. 40 years should tell you that the way things have been done DON'T work.
Currently, the rate of poverty is lower among seniors than any other demographic. I wouldn't fight a reasonable increase to my taxes, but I'd much rather see it go to education, infrastructure, and healthcare for all people, not just seniors.
4
In order to properly have this discussion, we need to take into account the cost of living in various locations. Our federal system that taxes people on the same amount of income no matter where in the country they live is flawed. High earners in high cost area are not economically better off than moderate earners in lower cost areas; in some cases it is the reverse.
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Instead of focusing on fear mongering about a rise in taxes, I would be interested in knowing who will benefit from the various plans. I just retired from teaching in a public school. Will the students I saw in front of me a few months ago have access to healthcare and safe, affordable housing? I'd be willing to pay higher taxes to see that happen.
1
Liberal states, i.e., blue states, ALWAYS pay more than the poor, undereducated, unhealthy conservative states, i.e., the red states. Confederate states continue to be the takers in our nation contrary to their belief system.
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SSN taxes are loaned into the General Fund and used on many other programs. Congress changed laws long ago that allowed them to play this shell game. The US Gov't owes HUGE amounts of money to SSN and this practice needs to STOP before any more raises on SSN taxes. Let's start applying the money to where it is supposed to be spent. Many States have the same issues where legislators steal/borrow funds from one area and use in another area. Texas recently passed a State Amendment which dedicates revenue from the sales tax on sporting goods to parks, wildlife, and historical agencies no longer allowing this money to be used elsewhere. Federal and more State Legislations should abide by original intent (how many State lotteries were started to fund education and no longer do?).
3
While clearly adding to the progressive nature of our tax system, I support lifting the income ceiling on Social Security taxation. It has been so for Medicare for quite some time. It may end the discussion about Social Security solvency, although I would also argue for lifting the retirement ages 5 years - to recognize longer life spans and working years.
Yes, it does mean high income earners will be contributing more into the system than they may every get back, but it is a fair contribution to our safety net, and that i already the case today.
2
It's not just social security. Farmers, coal miners, auto industry workers etc etc, who voted for Trump are gonna need subsidy until they get back on their feet.
1
Thanks for this piece.
Its clear that even the NYTimes recognizes that any proposal from today's Democrats is on a direct line to the goal enunciated in a 19th centiry book, "Das Kapital", by Karl Marx.
The key part of his route is "dictatorship of the proletariat".
Another is destruction of a whole class of people.
You, and they, the Democrats in general, are not even trying hard to hide this fact. Sure, you sometimes post an op-ed piece urging the Democrats to lie about that sort of stuff, on the grounds "that we can implement that policy after we get in power", which of course is also standard in the Communist modus operandi.
In other words, its clear that the rational person absolutely must vote against every Democrat at every election or
else we are doomed to the fate of the USSR, Cuba, and Venezuela.
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Good! I'm a 6th year charter school teacher and as such, an extraordinarily under-paid professional with 50,000 worth of student debt. the amount of work I do is easily worth 100,000 and yet I seem to get by on less than half of that just fine. Liberals? Conservatives? If you make more money than me it's tiiime to pay up! Lord knows I'd rather be making 50k a year with 10 of it going toward the public good than 40k because education is simply devalued in this country (which is exactly why these scare tactics are so effective!) Sheesh.
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@Mrs. Frizzle Yes, teachers are under-paid professionals.
I spent a great deal of time volunteering at my childrens' schools. I have great respect for this important work and believe it should be well paid.
The difference here, is that teachers struggle on $100,000 salary a year. They qualify for affordable housing. Just look at Zillow for Massachusetts, and see if houses there can be purchased for $300,000, $400,000. or $500,000 or less. I did and I noticed that you can live outside of Boston and own a huge house for the price that does not exist anywhere in the Bay Area. You may say, well, you make half the money. Yes, but the cost of housing is over double what it is to find just a decent house in Massachusetts. Here, with a $50,000. salary, you would not have enough income to rent even a studio. My point is that if there are wealth taxes, they should me modified to take into consideration the area someone lives in, in order to be fair.
12
Wow, strange days are here when someone is looking at Massachusetts as an example of affordable housing prices.
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@Mrs. Frizzle Most teachers (but not all, I don;t know your exact situation) don't pay social security taxes. So your after-tax income is 6.2% higher than an equivalently paid private sector worker.
I have read the break-even salary (where your taxes exceed what the government pays for you) is around $65K.
3
I just wish the Republican Party wasn’t filled with insane people. I’d rather pay more taxes than vote for those crazies, even though I feel like we are already over taxed out here
2
As someone who is fiscally conservative and socially liberal, this proposal unacceptable and will pain me to not vote for the democratic option if this platform continues. Folks impacted by this are the same people who work hard and got hit with the cap on mortgage tax deduction and state tax deductions last year. I’m personally drawing a line in the sand on this issue. Make a cause for less government waste or a reduction in military spending to pay for this and I’ll keep an open mind .
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@David Anderson I couldn't have said it better myself. Thank you!
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@David Anderson
"As someone who is fiscally conservative and socially liberal, this proposal unacceptable and will pain me to not vote for the democratic option if this platform continues. "
Absent taxation, how would you fund your socially liberal agenda?
"Folks impacted by this are the same people who work hard and got hit with the cap on mortgage tax deduction and state tax deductions last year."
At the risk of the obvious, it was not the Democrats who enacted that. If you want to reverse that, those who voted for it need to be replaced.
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@David Anderson At the very least, the 401K contribution limits should also increase. Many high earners can only put away $19K in tax deferred accounts. The current SS system takes $17,100 from a worker making the cap or higher. Yet the benefits of SS dramatically decrease on a per dollar basis the more you put in.
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Can we expect the normal NYT articles about how 250k is really not that much money?
1
But income is relative, isn’t it? To people who don’t make anywhere near that, it sounds like a hefty figure. To people who do, it might sound less lofty. Extensive discussion and reporting is already available on the subject of income relative to one’s own perception of financial longevity and security. After all, singling out someone for what some describe as ‘economic justice’ simply because they make more money than you really isn’t that different from singling out someone for any other difference in their way of life, beliefs, or or appearance, and I thought Democrats frowned on those sorts of behavior.
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How to lose a general election in ten days!
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If I have to hear another wealthy person cry about finally having to pay their fair share (by the way the same percentage the rest of us have been paying) I am going to be ill. You should be great full for how good you have it and how much this country has done for you, now shut up and pay your share.
1
@MDM what percent of your income do you pay in taxes? I pay 33% federal and 10% state. Effective rates, not marginal. Plus another 4% in property taxes. And lord knows how much in sales taxes, gas taxes, etc. And then there’s FICA, etc.
So all in, I’m paying over 50%. Effective rate. What do you pay?
Who’s not paying their fair share again?
5
As George Will said: if you rob Peter to pay Paul, you'll always have Paul's support.
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The greatest hypocrisy of them all is the Dems trying to repeal the SALT limitations. Only helps the wealthy. Mind you, it was the GOP that put the tax in.
2
Let me tell you how it will be
There's one for you, nineteen for me
'Cause I'm the taxman, yeah, I'm the taxman
Should five per cent appear too small
Be thankful I don't take it all
'Cause I'm the taxman, yeah, I'm the taxman
If you drive a car, I'll tax the street
If you try to sit, I'll tax your seat
If you get too cold, I'll tax the heat
If you take a walk, I'll tax your feet
'Cause I'm the taxman, yeah, I'm the taxman
Don't ask me what I want it for
(Ah ah, Mr. Wilson)
If you don't want to pay some more
3
Clear problem we are facing:
The current tax system is giving rise to the inequality of income, wealth and opportunity.
Hang out in Springfield, Mass; Waterbury, CT; anywhere in Alabama, Mississippi, Louisiana and tell me: do you like what you see?
Mr Irwin, wake up before they wake you up.
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Not only would the money be expended on Health Care and Education, but Trillions would also be sacrificed on the Altar at Al Gore's Church of Global Warming
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It's a tired and false talking point of the left that the "rich" don't pay taxes. The top 1% of taxpayers pay 40% of all federal income taxes. Time for another tax cut AND time to cut spending. And certainly not the time to reward illegal aliens with healthcare like most Dem presidential candidates want to do.
Time for the US to stop supporting half the world. Trump wants the Europeans to start pulling their weight for the cost of their defense. And the main stream media and DNC attack Trump rather than siding with the US.
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@Reader In Wash, DC And you buy into the lies and obsfucations of both conservatives and neoliberals. The top corporate earners -- Amazon, Exxon Mobile, WalMart, GE, Google and any number of others I could could also include here, paid ZERO TAXES. Who are you kidding other than yourself?
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@EDC Learn how the tax system works please. If a company like GE has billions of losses, those losses offset future taxes. I am sure GE would rather have been profitable during 2007 to 2011 and paid taxes. They are much worse off from the losses than a few years of $0 tax benefits.
Amazon and other growth companies are investing in capital infrastructure (CAPEX on a Cash Flow Statement). These costs depreciate, which offset profits. When you are building out a huge amount of infrastructure, the depreciation offsets taxes due.
Corporations are playing by the rules that Congress passed that were designed to incentivize CapEx spending (which is what employs people, you know building data centers, refineries, shipping centers, etc).
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@James These corporations are playing by the rules THEY BOUGHT WITH BRIBERY of our Congress. The entire economic collapse in 2007-2008 was 'legal' only because those white Wall Street thugs wrote the laws that in turn protected themselves from going to jail, where they all belong. As far as investing in capital infrastructure? Is that what you think they did with the latest round of tax cuts for the wealthy? What they did was buyback stocks and lined their pockets even more. If corporations cannot exist without massive handouts from the Federal government, i.e., THE PEOPLE, then they have no business being in business. Until they can exist completely on their own I don't see why any taxpayer should be forced to sustain them. Perhaps you need a lesson in what a government of the people, by the people, and for the people actually means.
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Taxes at the rate under discussion will have no effect on investment, innovation or work. Gates started microsoft when the top marginal rate was 75%. Get off the right wing lies.
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@libdemtex You are confusing marginal personal income taxes with corporate taxes. An infant MSFT had a much lower corporate tax rate.
Plus, effective tax rates (what people actually pay) has been consistent around 30% over 80 years, regardless of the top marginal rate.
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@James True, top marginal corporate rates in the 1960s were 50%. People had personal corporations to avoid paying the high marginal rates to say nothing of the great benefits these personal corporations gave their employee (a deductible corporate expense).
Duh! How do we pay off the $23 trillion dollar+ debt the untax and spend Republicans have given us? The point of this Republican strategy was to bankrupt social security and force us to make the difficult choice of heavily taxing the upper middle class or cutting benefits like Medicare and Medicaid. They have accomplished their goals thanks to an ignorant, math challenged electorate that continues to votes for Republicans and their tax cuts even when the math does not add up. This article reminds us that we need to make sure the beneficiary’s—the billionaires and corporations like FedEx —pay back some of the billions they have stolen thru dumb tax policies and not try and stick it to the upper middle class.
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@ commenter who is confused about why democrats lose
No. Au contraire, Democrats win when they speak the truth. Hillary, Kerry and Gore lost because they did not. Bernie and Warren will win because they are unabashed speakers of the plain and sad truth. We have a caste society and the rhetoric that holds it together is even stronger than Buddhist nonsense.
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Tax the high income? So What?! The bottom half have been taking on a growing proportion of taxes for decades. Cry me a river.
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*sigh*
“We’re only going to tax the wealthy 1%”
“Well, maybe also ppl making over $250,000.”
A small business can easily meet that threshold of 250K. Dual income earners can easily hit that and even a single can make that depending on his or her profession. And I very much doubt she’s living in Missouri.
Colbert (the Frenchman not the late show host) wrote “The art of taxation consists in so plucking the goose as to procure the largest quantity of feathers with the least possible amount of hissing.”
These proposals are the equivalent of grasping the a fistful of tailfeathers. At some point you have to wonder why even work? Let someone else be the gerbil on the wheel.
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This article seems like it was meant to scare people into voting for Trump.
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@Anne Berg
Common sense is not the same as “scaring”....
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Liberals view taxation as their obligation. Let's see how much obligation they accept before they cry!
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The billionaire tax hikes are now millionaire tax hikes. That did not take long. What comes next after millionaires?
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@Andy Deckman how about corporations and religious properties?
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@pseg "corporations and religious properties" Yes
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@Andy Deckman It has already come! This isn't even a millionaire tax hike... This is a significant tax hike for those making > $250,000.... It is a huge tax hike for people that are making good money, but in a place like NYC, still very much middle class.
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It seems foolish for Democrats to propose raising taxes disproportionately on their own base, especially after that base was already disproportionately impacted by Trump’s policies—with the tax cut cancelled out by repealed SALT deductions, and no relief subsidies from the trade war like farmers got.
Why don’t we fund progressive goals by cutting military spending and subsidies to red states instead?
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@HO Because Democrats are better than that. Because we are willing to partially put our neighbors and community and country and world ahead of our own elfish personal bottom lines.
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@MadManMark - You cannot possibly run a large and diverse country based on altruism. The majority will inevitably support there own interests. The government was designed to make sure all interests were represented, so they can work out a compromise.
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@HO - At the end of the day, the majority of Americans want is simply a system that's fair.
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I am not one of the high wage earners. Living in California I can say I am tired of tax hikes. In California it’s only led to more waste and unwise spending. Why don’t we try to eliminate government waste, starting with the military ( and I don’t mean young military families), before adding another tax increase?
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@Melissa - I agree with cutting the military budget but it is a hard thing to do for politicians. Outside of salaries and basic overhead, military spending mostly goes to defense contractors, who employ a lot of workers. Reducing that budget is going to send some of these companies into bankruptcy and will dump a lot of workers onto the unemployment rolls.
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@Melissa
If you're going to really cut government spending you're going to have to go after mandatory entitlement spending. Medicare, other health care and social security make up the bulk of this spending. It is almost 67% of the federal budget. Military spending, while a lot of money, is only 15% of the federal budget. The truth is, most people don't pay their own way in this country. Either while working or in retirement. We used to have corporations pay ~33% of the budget, it's now under 11%. We keep reducing taxes on the rich and corporations and keep giving out money to everybody. Something has to give.
Good. My wife and I are high-income professionals living in a Democratic state.
Please, yes, take a bit more from us, which we can easily afford, so that we and others can have, like, universal healthcare and a Green New Deal that is the only option (whatever form it should take, which is debatable) for survival. Among other things, like a livable wage and guaranteed job for everyone if they want it.
See, here's the thing: if you're not for that, you're unbelievably selfish. Have kids? What world will they inherit so you can have even more bespoke Whole Foods fruits flown in from Pluto? (Pluto? Just roll with it.)
So, go ahead: look in the mirror and make your moral choice. Trust me, it's not hard: my wife and I are hardly moral paragons. That's the point: this is *easy*. It's not even a hard choice.
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@Doug Tarnopol I agree completely. I've long benefited from having social security wages capped. As a professional in a coastal democratic state, my income almost from the day I graduated was higher than the social security wage limit. Saddled with student loans, for years, that was the only only way I had any savings.
And now that I can afford more, I would contribute more.
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@AP18 What about the young professionals in the shoes you were in decades ago?
Young businesspeople, software programmers, lawyers and doctors who are just beginning to make six figure salaries, are saddled by ever-increasing student debt and skyrocketing housing prices, and do not have generational wealth transfers, who are struggling to put together a downpayment?
Is it fair to ask us to sacrifice our futures, futures that we worked for harder than the 95% who didn't make it, to subsidize better living conditions for people without the same drive to build something for themselves?
And let's not kid ourselves - Warren and Bernie's version of an up-scaled Social Security is just that. In this instance we're not discussing raising taxes for improved environmental policy or socioeconomic mobility policies, we're singularly discussing Social Security on steroids.
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@D no, the lower 95% of income earners didn't just "not work hard enough" to pull themselves up sufficiently by their bootstraps. Real wages have been stagnant for decades. The vast majority of the economic benefit from increases in productivity have gone to the top 1% in this country for many years. The majority of Americans are working harder than ever without getting rewarded commensurately for their efforts. It's important for the health of the overall economy to ensure that we don't have huge numbers of elderly people living in poverty - and on top of that, I want to actually receive the substantial payments that Social Security keeps telling me I'm going to get on top of the money I already have saved for retirement. Signed, a professional who had six figure student debt and bought a house at the height of the last bubble.
81
My great concern is that the Democratic presidential candidates are competing to see who can make the most woke and socialist promises:
Free college tuition. Medicare for all, including illegal immigrants. College loan forgiveness. Reparations for blacks and gays. Guaranteed basic income. Federal job guarantees. Federally mandated school busing to achieve integration. Green New Deal (eco-socialism). Voting and early release for prisoners. Open borders.
All the fabulously wealthy US individuals and corporations together do not have the many trillions of dollars needed to pay for these goodies year after year, and even Bernie Sanders has admitted that taxes would have to be raised on the middle class to pay for Medicare for All, not to mention the additional trillions needed for the other items. (For perspective, the current US budget is about $4.4 trillion, with a deficit of about $1 trillion.)
As Margaret Thatcher aptly noted, the problem with socialism is that sooner or later you run out of other people’s money.
Don’t forget that our goal in 2020 is to elect a Democratic president, and that will require appealing to the independents, undecideds and others whom the Democrats failed to reach in 2016.
If all of these progressive (socialist) promises, or even a few, are planks in the 2020 Democratic platform we are doomed to a second term of Trump as president.
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@Mon Ray
This writer gets it. I can see the scene on election night now. Warren loses in a landslide and proclaims to a half-filled hall of long-faced supporters that they should not despair but continue the fight. Many people are hugging each other insisting how wrong and unfair the outcome is. Must have been the electoral college, or the right-wing media, or the billionaires who did her in. Get real folks. The Dems are preparing to fumble it again, and they will unless they take a good hard look at themselves, move to the rational center and get the vote out (and yes, that means in the overwhelmingly poor neighborhoods as well, some of whom seem to vote only when one of their own is on the ballot). There's still time.
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Democrat-leaning states already pay more in taxes that then get distributed to poorer states, a transfer of wealth from blue states to red states. This has been long-standing. That isn't a problem in and of itself, but the issue is what happens to that money. We'd be happy to pay more in taxes, provided it went to social welfare and progressive policies.
In blue states, there is more spent on progressive agendas - I am not claiming them utopias - while red states seem to work harder to create poverty, criminality, discrimination, illness, and death.
Taxing blue states more aggressively would not equalize anything, but simply make the balance even more unequal, sending money to states where the dollar goes farther, only to extend the horrible policies we'd want to stop and reverse.
12
@James Igoe you seem to miss the point of democracy. Voters are entitled to create poverty, criminality, discrimination, illness and death.
I am a Democrat. I generally support their policies. However there is no way that I am going to pay that much more in tax on top of what I already pay. Not everyone with a “high income,” is wealthy. Some of us who worked our behinds off to become professionals owe hundreds of thousands of dollars in student loan debt and deferred making money for years. Enough is enough. Let Donald and Jared who pay no taxes pay more first.
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@Joe Every thing democrats touch turns to poverty(California, New York City, Oregon). I agree with you on that they shouldn't tax those with large amounts of debt but I disagree with you on taxing billionaires. Billionaires already pay a substantial part of the US tax collection and any more would be unequal. We should lower our spending, not raise our tax rates.
7
@Henry Alley You realize that if California was a country, it's economy would be the 5th largest in the world, right? Rather than recite tired, old conservative misinformation, go actually study the European economies. Germany, Denmark, and Sweden are all great examples of capitalist democracies and have strong welfare programs and robust economies.
1
Why don't bleeding heart liberals who are always out to save the world but never on their own dime start a charity and stop trying to pick the pockets of taxpayers - the 50% of us that actually pay taxes?
6
I'm all for it. Considering I only have a few more years left in the work force and the fact that my wife already puts a sizable amount of her salary into tax-deferred accounts it would be wonderful to come in under the magical number as a couple and avoid the additional taxes, yet get the added increase in benefits. With all investment income generated in our ROTH plans immune from the greedy hands of Democrats we will be ready to feed at the Government trough along with the 47% who DON'T pay their fair share. What's not to like about freebies? And to all those AOC millennials struggling to pay the rent let them eat cake.
3
Life long moderate Democrat here. I’ll never vote for Trump. Nor would I ever vote for Warren or Sanders. So there. You foolish democrats. If you nominate Warren or Sanders you will get what your stupidity sowed. Four more years of Trump.
8
These tax increases would affect me, without question. I would pay roughly $10,000 more per year under the proposal.
That said, I'm happy to pay an increased amount to fund SS. I would be more than willing to pay more in traditional income taxes, too, if significant cuts to the DoD were to occur in favor of education, healthcare, and infrastructure investment.
I'm tired of Washington funding wars in third world countries while far too many of our own citizens move rapidly toward a more third world existence here in the States.
2
Since the social security break-even age is around 77, a large number of Americans older than that are getting a free ride. The idea of an income cap on SS is nutty and the cap should be abolished.
Somewhere in our history Americans adopted an incredible capacity for selfishness. Why do so many voters not want to help the less fortunate? What is it about our culture? Why is America such a land of takers? Greed is not good. I don’t care if you call me names for saying that.
@Aaron I personally prefer to donate locally for issues in my own community - at rates far higher than the amounts being argued about here. Most Americans are quite generous. In fact if you look at the numbers, conservatives voluntarily dig into their own pockets at high rates / levels of giving. I strongly believe that I should choose most of this than increase pass through dollars to Washington.
1
@ commenter who questions the fairness of the premises of the rich paying taxes and not getting them back
Of course it is “fair.” Have a look at Rawls’ work on fairness as justice.
You take care of the worse off before you maximize the welfare of the rest.
You know why?
Because one day you may wake up as one of the worse off.
Social contracts are not linear in payoffs. In civilized countries.
1
Tip O'Neil famously observed that 'all politics is local' so, by extension, all politics is first personal (as in 'what is best for me and my family'). Voting in the USA is of course private, and anonymous. Putting all of that together: when a Blue State professional, who would be personally impacted to the tune of thousands or tens of thousands of dollars by these DOA schemes to raise SS taxes, closes the voting booth curtain, what do you really think she is going to do? Of course no NYT commentator (or anyone they know) will admit publicly they are voting for Trump and, by extension, the straight Republican Party line, but if I were you, I'd be prepared for another 'morning after' surprise next November.
1
Looks like the Democrats have figured out how to solve Trump's suburban voters problem and to send those voters back to the GOP.
5
Hey candidates! Why not tax the republicans instead? What goes around should come around!
Why shouldn’t we increase taxes on the wealthy, especially when they’re paying a lower rate than middle class. I’m not sure we should raise the cap on payroll taxes above $250,000, but it’s open for discussion. We have these mega corporations earning massive profits and paying no taxes. That needs to change. We have the wealthy corporations paying unlivable or just livable wages while over half our populace cannot afford an extra $400 bill. We can’t afford any form of medical care, our infrastructure is crumbling, while repubs push for tax cuts for the wealthy and involve us in these inane wars, while they refuse to viably fund the needs of our vets. And...let us not ignore that we have some of the worst wealth inequality in the world. We have so many needs that could be funded, but instead we cater to only the wealthiest who can spend almost unlimited funds in our political system to manipulate our politicians.
We need change...BIG CHANGE.
When an individual or an heir takes money out of an IRA that money is added to any other income and taxed at the income tax rate.
It is not taxed at a capital gains rate.
3
Here is another way to look at this.
Currently, if I had a job that paid me $1 million a year, I would pay NO social security tax on $863,000.
That means my overall percentage is actually about 1.7% instead of the 12.4% someone making $137000 dollars pays.
That doesn’t seem fair to me.
Even if the percentage dropped as you went up into the millions, it would be more than reasonable to take SOMETHING and not leave the burden so completely on the “lesser” earning folk!
Tax rates are relatively low in the U.S. and government spending is extremely high compared to other western countries, especially military spending. Medical fees are inflated, Pharmac is milking Americans by outrageous high costs for medicines compared to much lower prices in other countries. It is astounding how little the average American know about where their tax dollars go. The problem is not taxing "high income professionals", the problem is there are too many loopholes and corruption and too little humanity and honesty. Hence Trump.
Tax me.
But tax everyone like me.
Tax the rich.
Make sure they all pay.
And let everyone enjoy the benefits
Of an educated society
With a safety net
To catch those
Who didn’t get rich.
Amazing to see that a flat tax proposal is being labelled as an extreme tax hike on the affluent. Seriously?
1
Taxes are not a "necessary evil", but rather the price we pay to live in a civilized society. I will pay more taxes under Warren's plan and I am happy to do so to advance whatever components of her plans get implemented. I like my life in the US and I am actually willing to pay a lot more to make American great again by rebuilding aged infrastructure, providing quality health care for all (even new legal immigrants), properly managing public lands, etc. Freedom and a high quality of life are expensive. It is ludicrous that the super-wealthy don't want to pay for the benefits they get. Try living a few days in Thailand, Russia, etc. (or any number of oligarch havens) and you will beg to return to your life in thew US no matter the cost!
The schizophrenia of American political philosophies is the divide between social democracy and aggressive capitalism.
No one has been able to reconcile these two opposing mindsets including the present administration that hates government workers, immigrants, charity to desperate foreigners or helping anyone who is not in a position to help Trump.
Trumpism has a tendency to highlight these violent opposite voter attitudes making it clear that America is deeply divided on most significant issues.
The result is an anxious and hateful relationship between family members, former friends, and coworkers.
Flat tax rates for all; zero deductions of any type; zero tax shelters; problem solved.
2
Three biggest lies:
1. the check is in the mail
2. don't worry, I'll respect you in the morning
3. don't worry, we'll only increase taxes on billionaires and other 'rich' people (say Democratic politicians)
5
Sen Warren is a true believer, like Bernie. So, don't blame the Republicans this time, Dems!
2
@Bos I blame the Dems for Trump, they ran a horrible candidate that was more disliked than Trump.
2
250k In NYC, SF, LA and other city and suburban areas is not wealthy.
Stealth taxes for groceries, car & home insurance, property tax, maintenance charges, child care & daycare for kids, maintenance charges, internet service, health care are all jacked up, if you live in a big city you pay more.
Any democrat advocating a tax on 250k is targeting there base city and new suburban voters. This is Madness and centrist Democrat’s will destroy them on the debate stage.
I am a Warren supporter but dismayed that this threshold is too low.
Tax those earning over 1 million a year who can afford a little extra, they are not voting Democrat and they pay less tax due to financial planners , off shore or other advantages, and private accountants, they pay more than the 42% I pay already between fed, social, city, state and property taxes.
4
@Kelly P
I've had a glimpse over the fence at the lives lived by some of the very wealthy. Most inherited their fortunes - a very few earned them.
Those inheriting wealth think nothing of others. Their focus is on what they have, and preserving or increasing it.
Some of those earning their fortunes share it with the people that helped them but many others do not. They may give early employees stock options when they cannot afford to pay the salaries deserved but look at Microsoft. Early employees got rich but Gates tried to cut Paul Allen's share when he got sick. People working for Microsoft now are likely to be contract workers.
There should be taxes on INHERITED wealth. NOBODY needs hundreds of millions much less BILLIONS. The 'foundations' set up by the wealthy often benefit them directly - though staying within the legal limits of what they can do. Buying the land around your mountaintop home is NOT 'preserving the environment' it is giving you more privacy. The same goes with buying a ranch and making it a 'performance venue' and 'art center' which coincidentally serves as your fourth home.
Look at the $181 BILLION owned by Walton family members - growing at $7,000 a minute. Their income from dividends has grown while employee wages remain static.
Fewer and fewer people are controlling more and more - to the detriment of society as a whole.
1
Eliminating the cap is the right thing to do as having it is flat wrong. One needs to look at why the cap was even put in place when Social Security was put in place - Republicans who really did not want to support it wanted it.
1
I hope the younger generation takes a lesson from this corrupt generation now and moves somewhere with good cost of living, lives debt free, and accumulates assets. Take advantage of remote work and the advantages of mobility the young have over the old. The current generation has leveraged the future to fund an unsustainable lifestyle *for themselves*. Most people shouting more taxes have no idea the cash flow issue facing most businesses, and could care less about freedom and pursuit of happiness. The current generation are nimby rent seekers who want to destroy new opportunity to have more for themselves. The younger generation should say hard no, no more.
1
@B They are, why do you think nobody under 60 likes Biden.
1
I started off making $300 per month. It took me well over 25 years to reach high income level. I was frugal. Now you tell me Warren and Bernie that you will tax the heck out of my income so I keep working into 70s? My paid for my kids education and saved little. You are making me a Republican now. I hear the same from so many people. Don’t help re-elect the current man in WH.
9
Let's be real here. Even with a tax increase to fund Social Security, rich people will still be rich and overpaid CEOs will still be overpaid, especially in proportion to the workers who actually create value in the company.
The argument against higher taxes on the rich is absurd, flawed and based purely on the greed that has become embedded in American society since Reagan.
Thank you NY Times for finally bringing this to everyone's attention. This tax would impact every professional household - doctors, lawyers, engineers, etc. While I am all for saving Social Security, how does anyone think it's fair that people who have studied hard and made financially sound decisions should be punished with higher taxes without any increase in benefits? As the article stated, this is just a wealth transfer from the affluent upper-middle class to poorer people. What happened to individual freedom and responsibility? What kind of message does this send to future generation - "if you do well in life and make more money through your hard work, you will be obligated to pay for those who make less than you or decided to put in less effort than you". This is a terrible idea; Democrats should be looking at the existing federal budget and see where they can slash costs to fund SS.
As an immigrant and an independent voter, these Democrat proposals disgust me. I guess this election I am going to be voting for the Republican. At least they don't tax me to death.
8
Higher marginal tax rate than Sweden but with very few of the benefits. A lot of people would be ok with paying higher taxes in this country if they got something for it but this is ridiculous.
7
Sooner or later, they will run out of other peoples money.
Then, they'll tax people more.
A race to the bottom is all this is.
5
I’m not shedding any tears for the “merely wealthy”.
@cynicalskeptic You are neither.
Politicians throw out an arbitrary income level. There is no consideration as to where a person lives. Deep South States residents might brag about their income; whereas someone in New York might be too embarrassed to go to their college reunion even though both make the same amount.
2
Most of America forgets that having a six-figure income in NYC results in a standard of living equivalent to someone making half as much in middle America (less, if you consider the horrible school system forces many parents to spend big $$ that they can’t afford on private school). Between the reduction in the SALT deductions (thanks Trump for penalizing blue states) and these oppressive new taxes (thanks Dems for penalizing blue states), it almost makes me want to go Republican. Which I won’t this time around given our horrible president.
But keep squeezing me for dollars I don’t have and forcing me to work extra years before retirement and I’ll revolt. if the Dems found some way to level the playing field between taxpayers in high cost and low cost states (cost-of-living factor, anyone), maybe I’d calm down.
5
This article is misleading; it fails to point out that the 12.5% SS tax is split evenly between the employee and employer, so the increase to the individual is 6.25%. That's still significant but not the double-digit increase the headline ballyhoos!
It also fails to recognize that such an increase is not only necessary for Social Security's survival, but it improves the fairness of the benefits. Several studies featured in NYTimes articles point out that lower-income blue-collar workers have a lower life expectancy than high-wage earners. It certainly true in my family"s experience. My Father was an able-bodied seaman in both World Wars and later a machinist. He died at age 72 from a variety of heart ailments and Emphasima, whereas I'm 88 and still going. Even though my salary always exceeded the SS cap, I doubt that I paid into the system much more than my Dad, yet he had only one hospitalization, just before he died. I, on the other hand have had more hospitalizations than I can count on both hands. Professionals such as me tend to live much longer and will cost SS and Medicare much more, so its only fair that we pay more into both systems.
1
@Jim Makris
For self employed it is 12.5%. With half of it deductible on the federal return.
You cannot walk in San Francisco without stumbling over someone sleeping on the sidewalk or shrieking obscenities down the street.
A proportional raise in everyone's taxes--mine included, and I'm a retired office worker--for a more secure safety net would suit me fine.
Higher taxes helped fuel a strong economy in the '50's. Shall we try them again?
Thank you. Harriet
I do appreciate the Times running an article like this that is arguably critical of Democratic candidates, but I do also wish it took a critical look at entitlement program spending. Yes, Social Security is a vital safety net, but it also has holes. Supplemental Security Income (SSI) pays out $56 billion a year in benefits, mostly to foreign-born residents who came here largely for...the benefits! So, yes, Warren can raise taxes on us to help fund this program, but we could also, reasonably, sustain Social Security by managing our immigration programs better.
10
Proposals like this, and all the other 'plans' on Elizabeth Warren's website, bring to mind a famous description of a British Labour Party 'manifesto' (i.e. party platform used at election time) from the 1970s: 'the longest [political] suicide note in history'. High time to send Elizabeth and Bernie to academia or the lecture circuit before they destroy the Democratic Party at the national level - for decades.
8
@Richard That's funny because their ideas are wildly popular, maybe the corporate own Dems should just go away and make speeches to Goldman Sachs.
Neil Irwin, should clarify marginal tax rates as well as adjusted gross income and how our tax brackets work. Stating wealthy New York residents will pay a "63% marginal tax rate" without further explanation of "marginal tax" or how taxes are applied to income is confusing for most people. The wealthiest would not pay taxes of 63% off their gross income: after their Adjusted Gross Income is calculated, and available deductions are applied, net income is spread over 7 tax brackets and each dollar that hits the next bracket is taxed at the higher rate. The tax is considered "progressive" because it progresses as income rises but it's spread out over each bracket. NYT readers: research tax brackets for plenty of info on how it works.
4
America will quickly come to learn that a country can not run a large redistributive welfare state, a state that provides free everything (healthcare, education, child care, etc.) based upon a highly progressive tax system that spares over 50% of the population from the taxes necessary to support the system. All Northern European countries have tax system in which EVERY worker pays about 50% of their earnings in taxes. These include the employer paid social services taxes, usually about 30% of pay, but actually 23% of the combination of take home salary and employer paid social service taxes; income taxes that start at 25% at about $5,000 annual salary and hit 40% plus at over $40,000 per year, and a VAT on all purchases of all goods and services of about 20%. EVERYONE who works pays over 50%, and more successful pay about 70% combined. With a large government, it either quickly creates this type of sustainable tax system or it goes bankrupt. The question is, are Democratic voters willing to pay for the government they want???
13
@drcmd Totally agree with you. Americans want all of the frills but don't want to pay for it. In Canada almost everyone pays something into the Health System, even those near the bottom rung of the ladder. Warren's fuzzy math will never be able to pay for all of this. Everyone will have to pay and a VAT is likely in the US. There won't be enough money otherwise. There is never enough in the UK to pay for the NHS. Read the papers there, it's in there almost every day.
4
@drcmd Nobody, nobody has ever said it would be free, nobody.
Addressing income disparity is a high priority but too many of these tax solutions do not take into account local cost of living. $250,000 for two working parents in the NY metropolitan area may statistically be a lot of money when you compare it averages that include rural and low cost states. However factoring all the local taxes, higher costs including housing, and limited available aid for college means there is not a lot left over. Also chances are there is a reason those parents can earn their income based on their skills, not random luck.
"Fairness" should not be about redistributing from those that mathematically have to those that mathematically don't, it needs to incorporate the circumstances that lead to the numbers and it needs to maintain incentives to contribute to society.
15
Given the barriers to entry for lawyers in the US and the vanishing small proportion of Indians and Pakistanis in the field in contrast to medicine, for example, do not state enforced restrictions contribute to the generous salaries of much of the Democratic elite? So it would seem increasing high earning attorney income, as well as Doctor income should be a no brainier. Let us see the rent seekers in the Dem party put their wallet where their mouth is.
1
If taxes are raised on the super-rich, they will still, at the end of the day, be billionaires. If taxes are raised on the middle class, the effect is to prevent them from amassing the generational wealth that defines the super rich, trapping them in the middle class. The vast divide between the "haves" and "have nots" in this country cannot be bridged with the backs of the middle class.
8
It seems to me that the solution to this dilemma is simple, so simple I hesitate to present it.
Divide the country up into regions (countites, area codes, zip codes, etc.) Index federal taxes according to the cost of living within that region.
There is a concept called PPP dollars (look it up) that is money that does take the cost of living into consideration.
You might want to charge the people living in high costs areas more in PPP dollars because you may believe that are receiving benefits from living in a nice place, but at least that would be transparent.
Another way to approach this problem is to tax DISPOSABLE income.
4
Some facts (F) and opinions (O):
1. (F) The US can create as much money as it needs out of thin air.
2. (F) Adding this money tends to increase prices.
3. (F) Increasing production tends to lower prices.
4. (F) Unless there is something preventing production from increasing, adding more money to the people who need it & will spend it tends to automatically increase demand & thus production.
5. (F) The main purpose of taxes is not to raise revenue (see1,), but to control the amount of money in the economy in the case we cannot raise production enough to control inflation.
6. (O) The actual computation is above my pay grade, but I think if we do it, we may find that if the US spends wisely & gets money to the right people, we will find we are taxing way too much.
7. (O) I believe the progressive proposals are precisely the programs that will increase production. Not only will they get money to the right people, but they would lead to a healthier workforce, save the planet, etc.
7. (O) Because of 1., there is really no need for the US to borrow from the public. I think we should stop doing so. Thus there would be no actual debt incurred. While this is not so important economically, it could be important politically.
8. (O) Taxes may have beneficial side effects. They could reduce carbon emissions and thus climate heating. They could reduce inequality which is important since the Rich spend a lower percentage and use their money to speculate more.
What do you think?
2
As one of those who may be impacted by higher SS payments, if the end result is helping those less fortunate, I don't have a problem.
However, if the majority goes to expanding the existing bureaucracy, I'd rather look at Universal Basic Income.
4
This sounds like the beginning of the end. Unfortunately, we will not know that until it happens and we see the results. Just remember that the government cannot give anyone anything unless it takes it from someone else first.
6
I would suggest that the Democrats put forward a plan with slight increases in the social security tax on even the lowest earners as they raise the taxes on higher earners as described (.1% would mean $2.50 a month on $30,000 income). Why? When everyone benefits, everyone should do something. I am reminded of the recent article on World War ll rationing and scrap recapture. We need to recapture a sense of national common good. This can be done even as we address inequalities.
9
@HPower brilliant! Aggravating voters of modest means is a surefire route to Democratic victory.
1
As a professional, I think it's reasonable for high-income workers to pay higher SS taxes as long as long as Congress simultaneously raises the tax on capital gains and gets rid of all the other tax dodges for the investment class/non-working rich.
But we also have a right to ask specifically how much all the other "free" plans being proposed by Bernie and Warren will add to our tax bills. Will NY's professionals actually be willing to pay a marginal rate well above 60%?
Maybe we should first aim for making college and healthcare truly affordable instead of free.
9
@Elizabeth
You’re aware that all of those plans that expand the welfare state must go through Congress first, right? If so, then why do you think college and healthcare would become free if either of them became President?
3
She said affordable, not free.
Taxation rates change behavior. I like my profession, and plan to continue indefinitely - albeit part time eventually. That said, unlike owning a business, my salary is strictly on an FTE or fractional basis.
Once aggregate taxation on the last dollar reaches 70% it's a no brainer for me to immediately go to 80% FTE. My net after tax income will drop by 6% and I will have 10 weeks more off per year.
Professions will see their most experienced people dial back the workload and chill when the marginal gain on extra work is diminished.
13
@Todd Stultz
Even if everyone thought like you do, which they don’t, that would open up more opportunities for people within each profession. If you’re unwilling to work as much as a business needs, someone who is not employed will fill that gap.
9
Yes, someone currently unemployed will become a physician or engineer. Those who are qualified for these high income jobs are already working.
Educated immigrants will fill the gap, not an unemployed jr college dropout.
3
@James
No, not all persons with advanced education are employed at salaries with which they satisfied. Medicine is probably the only profession that restricts entry. Other professions have underemployed people willing to work for your wages. Think about that a bit more. Not everyone in your profession has been fortunate to have your opportunities.
1
The payroll taxes on Social Security and Medicare are already more than regressive; flat-rate on the lowest portion of wages vis-a-vis the entire populace. Eliminate the cap on income for payroll taxes and, even if left as flat-rate-regressive, would solve the "so-called" crisis for Social Security and Medicare. All the hand wringing over the "crisis" enveloping the Fair Deal (Social Security) and Great Society (Medicare) programs will disappear. Better yet, make it progressive above the current income cut-off levels and the "so-called" crisis in funding these bedrock programs is solved. Sorry, mega-million-billion-aires, your yachts and private islands will have to be a bit smaller. We do all hope that this crisis in your lives will not be too much of an inconvenience.
5
@Peninsula Pirate
That wasn't the point of the article. The point is those who are making $250-300K per year are not "rich." They don't have yachts and islands, many have student loans of $250-400K at 7.1% interest from med school. Upper middle class, but still middle class.
5
@Peninsula Pirate -- Sorry. I meant New Deal, not Fair Deal.
Nominantion of one of the candidates scheduled to participate in the next debate will help DJT win re-election. This is especially true of a candidate like Elizabeth Warren or Bernie Sanders, with tax schemes to impose high federal taxes on the rich and high earners. Other items in their platforms are also very objectionable.
6
Don't take any of my money or you get Trump . No I think we will take some of your money for the good of the nation and you can live with it or leave.
Hard not to consider this side-by-side with FedEx recent $ 1.6 billion tax relief. (That is - they recently payed $ 0 annual tax). We could use some comprehensive inquiry and subsequent reporting - don’t these phenomena relate?
What are corporate taxes compared to individual income taxes?
I’d attempt this study, but I’d fail, and have another job and hope your news organization will.
Respectfully.,..
11
It’s time to reaxamine a proposal when your talking point fails as badly as this one:
“Are we prepared to look people in the eye and tell them that with the enormous wealth disparity we have that people who have worked all their lives shouldn’t be able to sustain themselves with dignity?” Mr. Larson said.
Whether you support these proposals or not, a social safety net program is not an example of people sustaining themselves. It’s kind of the opposite of that.
10
Politicians have ignored this problem for the reason reflected in many of the responses, we want benefits but don’t want to pay for it. Most of it has to come from either the wealthy or corporations, or both. The alternatives are to cut benefits or borrow the money. I’d love to see the responses if someone actually laid out a plan to cut benefits. We need to be rational if we are going to solve this, good luck with that these days.
5
@Tim Rutledge
We could start with eliminating benefits for the super rich as Warren Buffet has recommended. My "almost father-in-law" is only a centa millionaire and still receives his social security check each month. I'd love to know how many there are like this and what the savings would be.
1
My parents received so much more from Social Security and Medicare over their retirement years than they ever paid into the system. In fact, the return outpaced anything and everything on offer from the private sector.
9
@BBB
You're absolutely right. Most people don't realize this. My dad paid in during his life when max rates meant about $36 per year in contributions. He retired early before Reagan increased rates. Now he gets $1400 per month...for decades.
5
A possible 63% marginal tax rate is insane: not just confiscatory but economically damaging as well. Too many people are acting as though (1) high income earners are somehow morally culpable for their success, (2) that they should be taxed in a way that actually lowers their standard of living, (3) that said people are greedy if they complain, (4) that they will do nothing about it when taxed potentially at 63%, and (5) there are no knock-on effects by making the US a less attractive place to live for successful professionals.
33
Taxing those with $250,000. income, ignores the fact that this is a lot of money depending on where a person or family lives. In many parts of California, this is a middle income wage because of the high cost of living.
Continuing to deduct social security from those who have met their limit early on, makes the most sense, and is a rather painless way to increase revenue.
10
@K.M
Painless unless you're the one they're taking it from. How do I then pay my student loans?
3
@Drbill I have great empathy for those with student loans. I went to school just early enough that I did not have huge loans, just some small ones. These are the kinds of considerations to be looked at. Perhaps those with student loans should not have to pay additional social security. It is not that it is easy to have to pay that social security. It was money used for small important remodels or holiday gifts, but it is important to create more financial equality in our society. Really, who should be paying more are corporations and the ultra rich, making over 1,000,000. a year.
1
Excellent article. It's very easy to support soaking the rich when it's simply a matter of class warfare against the "oligarchs." When you're talking about simple millionaires like Bernie Sanders, it hits a little closer to home. The article doesn't even mention the hidden tax on the middle class buried in Elizabeth Warren's Medicare for All plan. In doing all she can to avoid having to say she would raise taxes on the middle class, Warren would tax businesses the equivalent amount that they are currently paying to provide private health insurance for their employees. This is money that would have gone into higher salaries instead of being diverted into benefits. One of the arguments for a government-provided health plan is that it would free up businesses from the financial burden of providing health insurance. Now Warren comes along and confiscates that savings, eliminating the increase in salary and wages that might have resulted from the savings on the companies balance sheets. That recession Democrats have been hoping for during the Trump administration will come crashing down once a Democrat is elected president.
9
So professionals and business people will do the right thing and pay more tax. Although the tax system is the tax system so it doesn't really become a choice of doing the right thing.
But aren't they the ones that have the ability to raise their prices? So the average guy gets benefits yet then the above average guy raises his prices to cover the additional taxes he's paying for the benefit of the average guy. So no one is better off. Then repeat I guess. Makes my head spin.
3
Yay, I don't need to work anymore! I'll get free health care with Medicare for all, my student loans will be canceled, I'll get free education, and now my retirement is set with higher social security benefits. The hardest part of all this is figuring out how to spent my monthly UBI. Huge thank you to the rich and the wealthy Democrats living on the coasts.
24
Maybe if dems can reverse the Trump corporate tax breaks, the funds needed can be raised without a further tax hike on the already high tax paying states. 63 percent tax?? And Fed Ex pays nothing since the Trump tax overhaul?
11
If what this article is describing is true, Democrats will be doing what the GOP has wanted all along since FDR, that is make, Social Security an us against them program. Ultimately this will sow the seeds of its demise. Basically, it’s another attack on the middle class for succeeding. I’m disappointed, very disappointed.
Without a strong middle class, there is no democracy. I sincerely hope that the Autors are wrong.
12
Can we please just focus on winning states like Pennsylvania and Michigan in 2020, rather than making drastic changes that don’t need to be declared right now? The future of the republic is at stake. Just focus on removing Trump and the deregulatory swamp creatures he came with.
18
Exactly.
Why don't we raise the share of SS taxes that employers pay? They can well afford it and it won't penalize the people working for them.
2
@Frances Grimble of course it will (penalise the employees)- employers will just reduce wages or reduce employment to offset their increased share of SS taxes
1
I'd like to mention that if you own a sole proprietorship business, as I do, you get to pay the employer's share and the employee's share of SS taxes. I don't think that's fair, considering the only person working in this business is me.
11
Why not? That’s how it works for every other business no? Also you benefit from lower corporate tax rates
1
This is how the Dems lose.
By moving from:
"the uber-wealthy should pay their fair share"
to:
"let's raise taxes on THEM and make THEM pay for it (as long as it's not me)"
$250k in SF or NY is not much when a 1BR apt can cost $1M and you likely have student debt since your job requires a college degrees and maybe a graduate degree.
23
No. Au contraire, Democrats win when they speak the truth. Hillary, Kerry and Gore lost because they did not. Bernie and Warren will win because they are unabashed speakers of the plain and sad truth. We have a caste society and the rhetoric that holds it together is even stronger than Buddhist nonsense.
1
I know many people who are able to take advantage of social security and other government benefits even though they are well off either because they’re paid in cash, run a cash business or have money overseas somewhere. I also know plenty of people who made a nice living when they were younger and ran into medical issues or needed to be put into a home when they got older and had to drain their savings and ended up practically destitute because they didn’t qualify for government assistance. I’m a socialist at heart and don’t mind paying more to help more, but I wish there was a way to control waste and abuse of the system.
10
The policies seem fine. Progressive taxation is a good way to manage civic costs and ensure all are cared for. There is a not unrelated story in today’s paper about schoolchildren in NYC who don’t have homes. Monstrous of us to allow such poverty.
3
Many one-income families experienced this tax increase already when financial set-backs forced them to be two-income families. Where one income might pass the cap, two diminutive incomes do not.
4
I have great sympathy for the 12% of people living in poverty.
Unfortunately, the socialists driving the "tax high earners" train are not the ones living in poverty, but rather people who find themselves square in the trenches of the middle class. They are leveraging beneficence for personal gain.
6
All the generalizations about where the line is for "rich" are ridiculous. $150k a year in expensive places (like San Francisco, NYC) is no where NEAR a luxurious income, but in most states, one could have a lovely house and live very well. If you don't live in those expensive places, you really can't grasp it. We are a huge country with VERY different costs of living. Somehow it would be more equitable to devise a cost of living adjustment into the discussion and taxation of "rich".
Look at real estate in SF online if you don't believe me. $1m is common for a starter older 2brm condo. Don't forget the hundreds of dollars a month condo fees on top of that, after you pay for it..AND the real estate taxes and insurance on that little $1M starter condo! I urge everyone to look at real estate online, and remember they always exaggerate how nice the place and the neighborhoods are! Then perhaps drawing that line of who is "rich" will be a bit more difficult.
15
You found a two bedroom for only 1M? That’s bargain basement pricing.
2
This is a great plan for minting future Republicans and discouraging the pursuit of advanced degrees.
14
There might be Democratic support to raise taxes to pay for our current liabilities for SS, but expanding benefits and running up a bigger bill when we already have such high national debt isn't going to garner support.
6
A truly brilliant move by the Democrats to stick it to the disenfranchised middle class in coastal cities. Not wealthy enough to afford lobbyists and not numerous enough to make a difference at the polls in these blue states.
21
Surprise surprise, to really make a difference, you need the higher tax to reach down closer to the masses (ie the middle class). T'ax the billionaires 'is a great tagline, & it should be done out of fairness, but it is NOWHERE near sufficient to take care of the big problems, even if it's a 99% tax. There is no such thing as easy solutions.
11
This plan will send suburban professionals right back to Trump. With a $250,000 threshold, this higher tax hits doctors, lawyers, CPA’s, other professional workers and small business owners. Democrats can’t afford to push these voters away if they are serious about beating Trump.
29
I would like to know what is the percentage of administration fees in social security funds before government increases taxes on the middle class ( largest percentage of government tax income sources). More taxes income doesn’t warrant a fair distribution to the welfare of people, it may fall into corruption black hole of administrations.
Fighting mismanagement of funds may be more effective than taxing more on high earners, who usually spent more, in turn, stimulate trickle down economy, it’s not as bad as what you thought! Corruption is the worst foe of the people!
3
I think politicians promoting higher taxes for, or increased services for, Social Security and Medicare need to explicitly counter a common meme of the younger generations: "We'll pay for the Boomers and never get any benefits ourselves." It should logically be obvious that if the SS system is funded to distribute full benefits past 2035, that younger people will personally benefit. Also that they will benefit sooner from not having to personally support aged parents and grandparents. But still, what I hear is "everything's for the Boomers, not for us." If politicians want the younger generation's votes, they need to address this. Sometimes a message needs to be more explicit and emphatic.
4
So let me get this straight. The college educated upper middle class who largely vote Democrat, will now get penalized for the sins of the ultra-rich who the Republicans will protect no-matter-what, and support welfare systems that mostly Republican-leaning states will benefit from? Sounds like an easy way to lose a lot of Democrat votes.
25
Are we talking about a tax raise from 12.4% to 14.8%?
That should not be an issue at all for someone making over $250,000 per year. To be transparent, I am fortunate enough to earn above that threshold and pay around 50%. Hard work is still rewarding at those rates. Although I would like to pay less taxes, I would vote against reducing it all the way down from 50% to 15%. A civilized society has a price and should include fair access to education, health care and the legal system for each human being. That cannot be financed from 15% tax rates.
8
@Wim No. This is a tax of between 6 and 7.5% added on top of approx 40% federal and 7 to 13% state (depending where you live) 2% local / city tax and property tax.
I like my profession, but my "number" is 70 - once the last dollar in is taxed at 70% aggregate from all sources, I choose an 80% fractional FTE. Net income drops by 6%, 10 weeks more off per year, and as a bonus I am depriving the taxation beast some revenue.
I'll have no problem filling the extra time with more travel, exercise, work around my home, and more time visiting local farms and making excellent meals at leisure.
2
It would be good social policy to shift some of the Social Security tax burden from wage income to investment income.
Investment income has been protected by lower tax rates on capital gains, originally intended to offset much higher inflation in the 1980s, but applied to gains in just over one year in the current low inflation environment.
There are many other tax advantages granted to the investor class, like carried interest and acceletated depreciation, in part because of their donor influence over Congress and the President.
6
The point is, you have already taxed my income once. If I’m smart enough to save, and not go into credit card and other stupid debt, and I invest my hard earned already taxed dollars, I shouldn’t be taxed on my gains at the same initial rate. Or for that matter, at all.
2
I think the most equitable way to address income/wealth discrepancy is to make sure no one gets any wages/salaries, and make everything government owned. The government can then make sure it provides equitably to everyone - food, shelter, healthcare, education, entertainment... Only then all is fair and equitable.
6
@MX You win the sarcasm-of-the-day award.
1
@MX Hopefully your post was satire ---- Fair and equitably miserable. I have no intention of leaving my home along Lake Michigan - except to endow it as a family retreat for extended family after I'm pushing up daisies.
Great, so I get to pay more in taxes to prop up a system that I'll never see a cent from.
I love that people in my income bracket are rich enough to get tax hikes, but not rich enough to get tax cuts.
21
I am one of those higher earning professionals in a coastal blue state whose payroll taxes would increase while my benefits do not. I recognize that I have benefitted from society’s investments in my education and I am happy to contribute toward the well being of all. Social security was designed to reduce or eliminate endemic elder poverty and that should still be viewed as its primary purpose. Those who are upset that rich people don’t quite get as much as they pay in are being churlish. For my part, I’m happy to pay it. As a 2%er (well almost) I say bring it on! It’s past time
7
Same situation - and my sentiments exactly. Thank you.
@Doug K Enjoy. How high would your marginal rate have to go before you would trim your FTE and enjoy more time off for a nominal drop in net ?
If this tax increase is offset by restoring the SALT deduction, the FICA tax increase would be much more palatable.
10
Amen
@Berto Collins
Spoiler alert - it won’t be.
1
The income cut off for paying social security taxes has been on an upward trend as long as I have been keeping track. For years I have fluctuated between paying SS taxes all year and hitting the max before the end of the year. The little extra is nice but I have always thought that if social security is at all at risk for funding that really raising the limit makes perfect sense.
6
And I’m sure none of the proposals are taking into consideration this new phenomenon called Student Loans that affect so many of today’s “Big Winners”..
A lot of doctors/lawyers/dentists might be earning $250k , but they also might have a $6,000 loan payment to make every month with what’s left of their take-home pay after all the taxes are taken out.
19
Oh don’t be silly....school will be free free free.
3
People at these income levels are wealthy and are usually able to afford paying more tax. At these incomes, the accumulated wealth over a lifetime can be considerable, and much more dramatic than annual income disparities. And wealth itself comes with opportunities and privileges that provide further advantages for more wealth disparity. This has little or nothing to do with higher social value, skill, or harder work than for many with much lower incomes, notwithstanding the narrow accounting methods of most economists.
These taxes will not eliminate their wealth, but rather moderate it somewhat. And it will not discourage the large majority to pursue the professions represented by this wealth. In fact, one reason for the higher salaries are current limits on higher education and access to many professions, which itself is often based on wealth! In a more equitable society, there would be many more doctors, lawyers, and so on, which itself would bring their salaries more in line with equity. So yes, bring on these taxes!
3
@Doug
"current limits on higher education"
There are more advanced degrees out there today than ever before. Many of them are just collecting dust on a shelf because there are not enough job opportunities to make use of them.
4
@Doug Enjoy paying them. At a certain top marginal threshold, time to work less for a nominal reduction in net pay. Tax policy affects behavior in ways that the planners rarely consider.
2
One thing that you did not mention in this article, mentioned in your prior articles, is that Social Security is no longer progressive. Higher earners because of longer longevity gain more from the system although their paycheck contributions are larger. Those living in the poorer areas of DC have a longevity 20 years less than the surrounding affluent suburbs. and this will be reflected in the returns they get from SS and also in their heavier utilization of Medicare.
Bernie Sanders campaigned on this proposal in 2016. It was minimally mentioned in the debates, and Clinton artfully dodged this issue. I suspect Biden will follow Clinton.
Warren did introduce her version prior to the last debate. It received no mention in the debates, and hardly a whisper of
attention from the media. Both proposals are extremely significant. addressing the needs of the elderly and also the SS trust Fund deficit.. They are very popular with seniors. So why have they buried in the media. Is it surprising that these candidates have minimal support from those above 65.
More than 50% of wage income comes from the top 10% of income earners. Only 20% from the top 1%. More than 70% of wealth is owned by the top 10%. One half of this from the top 1%. Those in the range from 2 to 10% were beneficiaries of all the tax cuts since Reagan. They should pay their fair share, along with the millionaires and billionaires above them
3
Shore up Social Security and give us real single payer, MFA and I would are fine paying 14.8 percent taxes. It would be a much better value for our tax dollars than the current system.
2
@macman2 You mean 74.8%? Otherwise, your offer is too sweet.
Can you just raise taxes on people that earn more than me? I work really hard and don’t think it’s fair to take more than 50% of earnings from people that do actual work...
19
Tax hikes only with some commensurate focus on reducing expenses, including common-sense immigration reform (limit number of illegal immigrants and their dependents, as well as support a more sustainable minimum wage for entry level / low-education jobs), limits on number of children (max 2 unless you can afford them), and some adjustment factor for living expenses (because $250k is an entirely different ballgame in NYC vs say, Kansas)
11
@Polly What common sense!
Increasing the income subject to SS tax does not help make the the system more secure since people are supposed get back what they put into the system. Trouble is a lot of people get back much more than they ever paid in even adjusted for inflation. SS is just another form of welfare for may recipients.
Same with Medicare and the Dems want to expand it. What insanity.
12
It is true, but only because the system is skewed toward high earners, that makes it only fair to tax those who benefits most of the economic system
1
@yulia
The system is skew so that high earners dont' get back what they put in. That is not fair.
3
@Reader In Wash, DC No, the high earners gets much more than they put it, that's why they are high earners. I don't see them rushing toward lower wages to get much if they feel it is unfair. They have choice - give up your high salaries and pay low taxes and enjoy all program for the poor. I bet a lot of the poor would switch their place with the high-earners despite the higher taxes.
You want a country that actually works, infrastructure, education, health and welfare? Raise everybody's taxes. And make sure the GOP ain't in charge of where the money goes.
It seems so obvious.
5
trump and his Republicans passed a tax bill that double taxed the Blue States transferring even more of our tax money to Red States. We are already paying more money and not seeing any of it. A tax to keep Social Security solvent is a worthy cause. A tax to combat climate change is a good cause. A tax for healthcare is a good cause. Double taxation for a wall that any plane can fly over or people can tunnel under is not a good cause. I would vote for more taxes if I have representation for those taxes.
12
Instead of taxing everything, why don’t we just give the federal government all of the money we earn and let them hand it out in a fair and equitable manner? Particularly since they do such a prudent job of spending the more than $4 trillion they receive in taxes every year already.
16
We talk of 'high earners' as if this country has any uniformity when it comes to wages and costs.
Categorizing anyone here in NY (or a slew of other locales) as a 'high earner' for making $200,000 a year is delusional.
A person making a third that amount will have a far better lifestyle in most of the country. Houses cost far less and local taxes are minimal in comparison to 'high income areas'. 'High incomes' are paid in areas where costs are high.
The middle class is being squeezed out of existence by both lower wages AND higher taxes. Meanwhile the truly wealthy pay minimal taxes and companies pay nothing.
45
In the major metro area in which I live, 250k for a family of four is middle class: not even upper middle class. I support a national healthcare system, but politicians need to be honest. Middle class taxes will go up.
38
They may or may not. After all, 250K in many parts of the country is considered to be rich. I guess for some middle class the taxes will go up, for others won't.
So what? What is the magic about middle classes? How are they defined?
The income distribution is supposed to bell shaped. It actually is L shaped (mirror image actually). So where is the “middle”? The median?
In any case, if people have to pay taxes progressively so be it. As long as we are living in a country where everyone is allowed to pursue their happiness, realistically. That includes universal healthcare and education. That includes clean air and water.
I had enough of the American rhetoric. Middle classes and the American Dream! We are living in a quasi-fascist state. Wake up!
This nation now serves the rich and powerful.
The wealthy have an ever growing share of wealth while paying less and less in taxes. The Walton clan has garnered $6 BILLION in tax savings over the years while sitting on a fortune worth $175 BILLION or more. Meanwhile many of their 1.5 million employees are on food stamps.
Huge corporations - that make their profits here in the US - pay nothing in taxes. How can that be possible?
Yet we hear nothing of having business pay THEIR 'fair share'.
12
I see nothing wrong with these proposals. Increasing the payroll tax cap on 7MM people of a nation of 330MM seems like a small price to pay for 20 years of additional Social Security solvency. I have two comments. One, the amount paid in for social security has been separate from the benefits for many years because of the cost of living adjustment made every year. Two, I looked at my recent Social Security statement. My projected retirement benefits are tied to the amount I am expected to earn between now and retirement. So, if the cap goes up to $250,000 won't retirement benefits for those individuals go up too?
1
There is a cap on SS benefits. So, high earners will get max SS but not over the cap.
1
@Joe Smith
Dream on!
I live in Newton MA, a town filled with the high income, liberal professionals described in this article
And as I look at the cornucopia of affluence that surrounds me, I think maybe tax increases aren't such a bad idea: if people can afford to add a 2,000 for addittion on to a 3,000 square foot house, they can afford to help with social security
12
I have no issues paying higher taxes. But social security money should be about solvency. Not new promises to retiring boomers. We should be investing in the countries future - not its past.
9
But who wants to work for future, if the future doesn't guarantee the decent living?
Most people have no idea that high earners aren't paying into Social Security on 100% of their paycheck. I shared this fact with my parents years ago, and they were floored.
Here's another fact most people don't know: At the current pace, the top 10% of households will have 100% of the wealth in the U.S. 33 years from now.
10
@Zep
At present the 6 Walton family members (Walmart heirs) have $191 BILLION (Marketwatch Aug 2019) in just the Family Holding company. They earn $100 million a day, $69,444 a minute.
Walmart is the largest employer in 20 states. It has 1.5 million employees in the US. Most store employees make $10-15 an hour (most at the lower end of the range).
The Forbes 400 are (combined) worth 42.96 TRILLION HALF that wealth is held by 45 individuals.
The Brookings Institute says:
"The top 1% alone control more wealth than the Middle Class - defined as the second, third and fourth quintiles eg the middle 60% of the US population.
5
@cynicalskeptic What does any of that have to do with a big tax increase on a two income professional couple (who probably didn't hit max earning till late 40's early 50's) pulling down say 700k per year. We don't blink at sports figures and entertainers pulling down millions, but some grouse about high income professionals who typically work long stressful hours ( as example - not mine - consider a heart surgeon and a lawyer as a two earner couple ) There's not a lot of down time. No tears, but between officials trying to turn medicine into a public utility, and higher tax rates on labor - yes, even for professionals it is after all labor. More time off and less work becomes very attractive once the marginal gain on extra work is diminished.
3
Despite contrary opinion, I still opt for a "flat tax rate" of a percentage that would be fair to all. Every individual in this country that uses services should pay a portion and contribute to the betterment of our country even those on the welfare benefits receiving end. Everyone paying a fair share feels ethically right.
12
A flat tax might work fine. But wages and benefits for hourly workers and salaried professionals must be adequate able to support individuals and families after taxes.
Compensation is the real issue. The wealthiest have reached a point where they control just about every variable that affects our economy from what is produced to what everything costs to what everyone is paid. Its nonsense to say government does this. We effectively live in a managed economy designed to maximize wealth for the wealthiest with very little investment for the future or expense for consequential costs or damages. This is the principal cause of almost every social, environmental and economic problem. Nothing in our economic system has been designed to be sustainable.
7
I think it is a great idea when we will have a flat distribution of wealth. We all contribute to GDP, it will be fair it will be equally distributed.
1
But Sanders at least also has some good news for these high-earning professionals. They would be able to send their kids to public colleges without paying tuition. That would be quite a benefit. Perhaps around a hundred thousand dollars for each kid at current tuition rates. They would get the same benefit as people with far lower incomes would get. Even though they are wealthy enough to afford tuition they wouldn't have to pay. Sounds like a good deal. According to Sanders every child has a right to a free education including higher education.
5
@Bob Not true, public colleges use holistic system which works against higher income families. Also, public colleges will have to reduce their size - in Europe only 30% HS grads go to college/university for free.
8
I don't mind the rich kids getting free education, as long as the low-income kids have the same chances to get same education.
1
@Bob Not even close 250k for U Notre Dame, ~ 120 k for Case Western reserve (She got a nice merit award for top shelf grades from a demanding school) Both using their degrees to good effect. Well worth it. Not sure the other is a good deal. The taxation rates will rise further when they realize it still isn't enough.
2
As a high wage worker, I don't have a problem paying more SS tax IF future benefits are also increased. The benefits don't have to be increased 1-1, but there should be some proportional increase.
15
The photo accompanying this article is laughable. My wife and I make more than $250K, but could afford nothing in that photo—not that car, the horse, or even to have such a nice grass lawn. 250k doesn’t go very far in the Bay Area, with crazy-high state taxes, sales taxes, property taxes, and annual “enrichment” we give to our public schools to keep them afloat. Am I in favor of increasing the tax burden on billionaires? Sure—take their polo ponies. But any more proposed cuts to our income means I don’t vote for that candidate. I have kids I need to send to college.
87
I also live in the Bay Area and also make more than $250k/yr and also have a kid that will need to go to college. I’d be fine with the increase in social security taxes (it’s for the general good of the country) if we got our SALT deductions back. At least the SALT deductions gave us a way to partially offset the cost of living here. Without them, we’re going to get killed by these democratic tax plans.
43
Everyone in this class must consider that our economic system is not sustainable as it is. That we are paying a tremendous cost in unaccounted for consequential costs and damages. Taxes are not the only solution. Europeans do just fine, if not better on lower incomes. Their healthcare, housing, transportation, education all cost less. Big houses full of stuff is not common. But they live well, work less and enjoy life.
8
Can we consider a purchasing power parity tax rate? My friends in the Midwest make half of what I make in CA but have huge houses. I can barely afford rent on 1000sq feet and childcare and am certainly not in the position to buy a house when the base price is nearly $2m in and around SF. We need more creative solutions!
14
As small price to pay for policy that actively targets the super rich.
3
Very simple , democracy is under attack by the Trump administration. If we all have to pay a little more in taxes, repeal the zero taxes that Amazon, Fed Ex dont pay, give health care to the American people, fix our roads, fix our schools take care of rural America fix everything that is so broken in this country. Get the homeless and the mentally ill off the streets, be the good people we know we can be. Everyone who is decent American would not care to pay mores taxes because we would be doing good.
We are going to lose our country and for what the current dictator and the greed of Wall Street. We all have skin in this country to stay free, and have a country that we can continue to be proud of.
The Bloombergs, had their opportunity to help everyone in NYC he didnt do it, so lets look to Warren, Bernie.
Today listening to the corruption of this administration, watching the people in Hong Kong fighting for their freedom we need to stand up and be Americans who care about each other.
A little more taxes will not hurt anyone, not doing something will destroy this country. Slum landlords like Jared, Milken should not be allowed to destroy this country because they have rich lawyers and lobbyist who are bent on the destruction of freedom.
We have a crook in the White House who is being advised by Mr. Miller a SS guard, we are on the slippery slope and awe need to right this ship called America.
4
I won't lie, increasing the social security maximum will affect me negatively. It would bug me if I paid flat tax on all my income but richer people didn't. Why not just make this a flat tax on all income. Then I wouldn't mind.
5
When we will have flat income distribution, flat tax will make sense.
Lets be perfectly clear. Income inequality isn't about the 1% or fraction of 1%. That's a cliche, an example of low hanging rhetorical fruit. The class driver of income inequality is the top 20%. These are the meritocracy and they ain't just Republicans by a long shot. This is the professional / investor class and the liberals in it are just as economically Darwinian as any conservative wealth hoarder. These are the Clinton Democrats, the people who support social & environmental justice as long as it doesn't hurt their pocketbook (or perhaps portfolio instead?). The people driving working class families out of the cities and driving up housing costs across the country. The republican tax breaks targeted them too and they're why a Bain vulture capitalist has thrown his hat in the ring. They want Warren and Sanders out and their financial advantage left in place. Their nannies, gardeners, house maids & employees are the ones being left behind and that's okay as long as we don't deport them or discriminate against them. (I'm against deporting and discriminating also, but that's not the point) But let them & the rest of us unionize and demand a living wage or advocate for affordable housing and health care then the difference between the conservatives and liberals isn't worth mentioning. Talk about Roosevelt style liberalism and taxation and watch the rent seekers raise such a fuss and send Trump a check. Plutocrats together and forever, sad eh.
5
@John Chastain - They are also the only ones with the skills and education to run the government and society in a complex technological era. The people at the bottom don't really have any choice but to leave them in charge. Whatever they decide should be done, that's the way it's going to be.
8
Actually, it is not truth. The low-income people can also govern they just never got a chance.
1
@yulia, isn't it interesting how oppression is justified by the oppressors and their apologists. It is based on the assumption that complexity is always desirable and income level is indicative of intelligence and competence. The tech bros use technical complexity the way professionals use jargon, as a tool to isolate and perpetuate their dominance of their fields and society. Two points, one, I call them bros because they use the same argument to keep women out of their isolated tribe, two, the Microsoft operating systems whose complexity is its very "Achilles heel" & aptly demonstrates the very fragility of both tech and its proponents.
1
This article assumes that professionals will simply be paying more taxes.
If I take my current costs of over $10,000 per year for medical that I pay through my employer and we go to single payer. My taxes may go up but my over all costs may go down. Meaning I'm either ahead or breaking even where I was.
This article is actually comparing what we as professionals will have in our pocket at the end. Who cares if your taxes go up if your costs go down because you longer have to worry about medical cost creep.
5
Your medical costs won’t go down much if any. Other taxes will more than “cover” your savings. Nothing will be free.
I am for single payer, but we all have to be realistic and understand that we will pay be paying for it.
1
Yet one more way Boomers have jammed it to the younger generation. They paid in less than they should have, and now we have to bear the burden.
10
@Todd It doesn't look to me that the *age *of any taxpayers will affect any changes in tax rates. Furthermore, you too will be old someday and need Social Security and Medicare. And your aging parents and grandparents will (or do) need them before that--I assume you care about them.
1
@Todd
It wasn't boomers who paid in less, it was their parents. Boomers are only now starting to retire and most of their working life was under the Reagan SS tax increase. My dad never paid more than $30-40 per year and now gets $1400 per month, still going strong at 89
3
Boomers had a similar attitude toward their parents. Funny how that works.
1
The low hanging fruit for Democrats is to eliminate the wage cap on EmployER contributions (not employees' share). That should be a no brainer,
Until the dust settles on all the other tax increases on upper middle class professionals, it's too early to declare war on them in this segment. Dems need those suburban and professional voters in 2020. don't be stupid, please.
My new book, Enlightened Public Finance: Fiscal Literacy for Democrats, Independents, Millennials and Collegians, explains now to navigate this issue, and also provides 8 achievable, rational, pragmatic tax reforms that raise over a half-trillion of ANNUAL revenue.
3
Allowing the wealth gap to grow may destabilize society. Increasing taxes on high earners is preferable to marauding mobs wielding pitchforks and guillotines.
6
Easiest fix for the “oh it’s going to run out of money so we need to cut benefits” scaremongering. People RELY on these benefits. As a high enough earner that the cap kicks in during the year, RAISE or ABOLISH the cap!
4
This is how our political system works. Republicans have gone wayyyy too far to the right with Trump and have alienated a large % of their traditional base. They are already suffering and will suffer more consequences.
If the Dems win in 2020, they too will overreach by raising taxes and increasing spending, and anger a significant number of their new supporters. This will open a window for Republicans to once again move towards the center to grab those voters back. Anger over taxes has always been the primary motivator for GOP voters.
Liberals love to talk about how many people vote "against their economic interest" by supporting Republicans. But the same is absolutely true for upper income liberals. You simply can't expect a majority of self-interested people to support politicians who see them as a piggybank.
Donald Trump's toxic personality, racism and other nasty tendencies have forced millions of educated Republicans to vote against their best interest. There is no guarantee they will keep doing it once he is gone. But just try convincing a religiously liberal person that there hasn't been a major shift to the left in our country.
14
I’d rather pay $200 a month for health insurance. Seriously this is to get an extra $200 a month in retirement? What a terrible rate of return! I’d rather keep my earnings and invest! We should be allowed to opt out of Social Security and use an IRA instead.
7
@See? Right on! I’m with you!
I am left of center and always found Warren and Sanders plans to be non starters. with this revelation I am glad the Senate belongs to the GOP. but unless the economy tanks and thanks to Sanders and Warren tagged as socialists, democratic voters like me who are on the verge of upper middle class in expensive liberal areas would not have to be the sacrificial goats for lower income tiers, coz trump as despicable as he may be, will win the battle ground states. Warren et all are out to destroy the silent class of strivers by using their hard earned income through professional jobs to expand welfare for lower income classes.
34
The people whining the most about paying additional taxes are in NYC, D.C., Chicago, and CA. They may be outraged if they have to pay more, but they’re a relatively small percentage of the population and their votes won’t matter given their locations.
3
Their votes in the democratic primaries most certainly WILL matter! I’m a self-employed UMC professional and I can’t cite for Warren or Bernie with these crazy tax plans. After losing the SALT deduction I can’t take an additional $10-20K hit.
3
@BK - Yes, but they constitute the core of the Democratic party. They provide the money, the ideas, the candidates, the delegates to the convention - everything. Without them, the Democrats would be down to self-interested public employees and poor people on welfare, and they'd be wiped off the map.
5
@BK in the primary they will. For this issue that's all that counts.
2
Perhaps we should tax welfare payments as is done in Scandinavian countries. Everyone needs skin in the game
16
"This would pump vastly more money into Social Security..."
Nope.
It would cause the economy to crater in as the top tax rate goes from:
32% + 12.6% Social Security + 3.4% Medicare + 3% Unemployment + 8% State income tax + 8% state sales tax on what's left over = 60%
to
39.6% + 27.4% = 70%
This is the tax that took the stock market down 90% and started the Great Depression.
In 1932 Hoover increased the personal income tax from 24% to 67%.
14
The tax rate did not cause the depression. The depression, like the 2008 recession, was caused by wild speculation & over valuation. I can’t believe 5 people ‘liked’ this comment! The US had higher income tax rates in the ‘50’s & ‘60’s!
2
@Mary Sampson with substantial deductions and exemptions - few paid those rates.
3
The Republicans took money from the Democratic states in their tax reform to solidify their rural base. So now Dems want to double the favor? The Republicans will be laughing all the way.
19
@Jim T
Yet another uninformed regurgitation of a false narrative.
That tax change capped SALT deductions to $10,000 but also eliminated the Alternative Minimum Tax. The truth is Dem politicians never want to admit that the AMT always prevented taxpayers from fully deducting SALT anyway. Just more partisan cherry-picking.
SALT deductions went away and so did the AMT. It balances out.
4
"Moreover, the Warren and Sanders plans would apply Social Security taxes to investment income for the first time, not just to earnings. That would make it harder for high-income people to avoid taxes by reclassifying their labor income as business income. This has the potential to reduce the accumulation of savings, and over time reduce investment in the economy."
Prohibiting people from avoiding taxes by reclassifying income is a bad thing? Only if you're a shill for those who have been gaming the system.
3
It is not a tax increase, it is just returning tax rates to their normal levels. They were higher throughout American modern history, even Republican administrations. Furthermore, research clearly shows that very high income individuals are not motivated by money, but what it represents to them.
3
What is “normal” and if you are going to look at historical rates you must consider that the income tax was zero up until the early 1900’s.
There is normal.
2
@Adam Maybe a business owner doesn't care, but your doctor, dentist or lawyer might just take off an extra day a week or 10 weeks off in blocks during the year as the marginal loss in net income at higher tax rates makes the time off much more attractive.
3
Republicans have run on smaller government and low taxes. They haven't cut revenue they have transferred it to the private sector while leaving an enormous debt to the public.
Democrats run on bigger government and high taxes. They aren't willing to tell the truth that we can't only tax Billionaires to satisfy the enormous funding these programs require.
The system is based on compromise and we have stopped compromising. That was abundantly clarified when Speaker Boehner and President Obama reached a serious compromise on a long term budget plan that Boehner couldn't get through the Republican liberty caucus.
The radical wings of both parties is simply killing this country. And yes the Republicans are worse by miles.
6
There should be NO cap on taxable Social Security income and every dime earned should be fully taxable no matter what the source of income is. It should make no difference what state you are living in.
This anti-tax hysteria will do more to destroy what is left of this nation than any Russian or Chinese meddling in our elections.
4
Why should I pay more taxes when Amazon and other companies paid zero dollars in taxes? Honestly, why??
20
Higher income tax yes, but being back the SALT-deductions.
10
As someone who would be most affected by this proposal, I am in favor of this. There is such income inequality in this country and if this will lessen the gap and make social security more sustainable , I am all for it.
5
I am a retired entrepreneur. At NO point in my career was I ever even remotely concerned about taxes. Paying them indicated that I was succeeding at my business, and I considered paying taxes to be part of my obligation to the social contract of our nation.
I *was* concerned about providing relevant services to my clients, to maintaining and expanding my client base, and to innovating to gain new business.
I'm suspicious of the motives of wealthy, successful people who oppose increased taxation, given that taxation has massively *decreased* during my lifetime, for ideological and pandering reasons, with devastating effect on American society.
I'm equally suspicious of journalists whose work calls economic fairness and societal well-being into question. You conveniently found whiners, but you didn't ask me for my opinion.
7
@David Depending on the top marginal rate, many salaried professionals would prefer more time off rather than marginally greater take home pay at high last dollar taxation rates. If total aggregate confiscation is 70% from all sources, 10 more weeks off a year is way more attractive than the extra 6% I would clear in net income.
1
This kind of thing is why I won’t vote for Warren or Sanders. The wealthy — earning above $1m a year — should shoulder the increase. Not software developers making $140k. It’s finally enough to support a family and we should keep it!
29
Your wage is several multiples above the average income so don’t push off your responsibility to the wealthier.
1
"The top earners facing new Social Security taxes would not see their future benefits rise commensurately; rather it would amount to a transfer from high earners to low- and middle-income Social Security recipients."
And that would be the end of the SS system as conservatives would paint it as a welfare program and frightened Democrats would agree and start block granting or slashing the program.
Better idea: Keep it equal for everyone, like all insurance is. Raise the payroll tax 1.2 points on employer and employee.
For the employer who just got a 16 point cut in corporate income taxes, this is no big deal.
For a worker earning $50K is would be about $12 per week, the cost of a movie ticket.
This minimal increase would put the system on a 100% footing for 75 years according to actuaries.
Just because SS is based on age and income, and not risk, does not mean it should not be viewed as a retirement insurance program.
That is what the "I" stands for in the program's official title "OASDI."
3
I am fine with raising the cap on Social Security. If people who for the government and make more than the current cap, are being paid with tax dollars, then there is a loss. I would set the cap at what the most highly rewarded government servants make.
The 'rich' need to understand this:
There is a price to 'social peace'.
It costs money to avoid 'social unrest'.
With a President Sanders or Warren, the 'rich' are going to have to pay that price.
The Democratic liberal 'rich' need to get 'comfortable' with that idea.
Or am I missing something here?
2
@Kenneth Johnson Be careful how much. Atlas will shrug - Not the billionaires - the top 20% will throttle back. That will crush GDP. They'll sell the primary residence, move to the house at the lake and work 20-30% less from their home offices. The economy will crater, and they will just chill out in their quiet hideaways buffered by what they have already accumulated and moved to safe capital preserving investments.
2
They can start with eliminating the carried interest loophole that allows the hedge funders to avoid taxes on their profits. Didn't Trump rail against this during the campaign?
12
Removing the cap would bring in billions (yes, that's a "b") from the upper part of the upper quintile of earners not by taxing them more, but by taxing them the same as everyone else below them. Removing exemptions like this is one of the best ways to level the playing field.
Keep the conservative think-tank talking points on Fox News please.
3
Eliminating or drastically raising the cap on earnings subject to payroll taxes would destroy the connection between social security taxes paid and social security payments received. In short, it would make social security into just another welfare program, rather than an insurance program. I wonder if the Democrats have considered how such a transformation might affect public support for social security.
11
"What you pay in roughly corresponds to what you get." This is a vastly misleading statement. Social Security was never designed to be a personal insurance or a saving account. That is what the right would like us to believe so that they can privatize social security.
Social security is a trans-generational redistribution system. Like any redistribution system the rich pay for the poor. There is no way a worker earning minimum wage could save enough on their own to earn what they will earn through social security benefits. That is one of the reasons why poor states receive more in federal spending than others.
Rising or eliminate the cap would be the easier way to insure that one of the few systems that tie Americans as a nation continues to exist. Extreme individualism is eroding slowly Americans sense of belonging to a nation. Those who make $127k a year probably do so because there is a market that allows them to make such a good living, and they will receive full social security benefits for many years. It is time to share the fruit of prosperity with hard working and deserving Americans.
2
You are missing one piece in analysis which is death and it’s impact on the payouts. The system pays out more than what was collected from each of us because there is interest income plus employer contribution. And many people never collect what they paid in because they die young or early in their retirement.
Because the rich live longer than the poor they tend to benefit most from social security.
1
I have never agreed to the cap on SSI taxable incme. Either we are all in this together or we are creating a caste system. I earned more than the cap amount for years and it always seemed grossly unfair to the social security system. The real lobby against this are the corporations that contribute equal shares. SS should be funded and used by all who pay into it equally.
3
Tax revenues in 2016 not only quit growing, they shrank by 1%. Scary, scary, scary. This despite the economy growing 1.5% Three hundred billion in real economic growth in 2016 yield less than no revenues for the federal government.
What was going on? Those segments of the economy being taxed at Obama's 39.6% plus medicare 3.4% plus unemployment 3% plus state income tax of 8% plus 8% sales tax on what's left= 58% were not only not growing, they were shrinking.
Those parts of the economy growing untaxed were growing. The Amazon's, the Googles, the Berkshire Hathaways.
Want to go back to 2016's no increase in revenues? Restore those punitive Obama tax rates. Want another Great Recession, Great Depression? Go back to income tax rates above 50%.
5
The Warren and Sanders' proposals would raise the federal tax for income above 250,000 to over 50 percent. In New York City, state, city and federal income taxes would produce a margin tax rate close to 70 percent. So a hard working doctor earning 500,000 dollars a year would pay 175,000 dollars in taxes on the last 250,000 in income while living in high priced New York City. How many want that? Can I have a show of hands from well paid independent contractors?
18
@Yankelnevich They should go to 80% FTE and take 10 extra weeks off a year. Would be a brainstem reflex for me the moment the last dollar I earn hits 70% confiscation. I assure you I won't miss reading the MRI scans I would in those 10 weeks.
Top earners, those earning more than $137,000 in Social Security wages per year, live longer. In fact the wealthier one is the better medical care one has; therefore, longer life expectancy. The S.S. is based upon the 'whole life expectancy' charts. The median age of death for a person age 70 today is 84. BUT, every year one live beyond that age, one takes from the account of another person.
Top earners, live longer, they will collect beyond their 'used best by' date, and therefore must pay more to cover their own way.
2
The original sin in the whole debate is already to name social security contributions as taxes. It is not a tax, because a tax is defined as a payment to the government for which the recipient earns nothing in return. That is not the case with social security, as the payer earns an entitlement to a pension. In no other jurisdiction social security payments are considered taxes. Again, this shows that the Democrats are not interested in taxing the really wealthy people, only the people who actually work for their money and are not in a position nor willing to make lavish donations. In NYC, a high school principal married with a sanitation worker can make together 250,000. If Democrats would be really interested in taxing the wealthy, then they could have outlawed the carried interest capital gains treatment and capital gains tax preferences already a long time ago. It’s all a show. Thank you NYT for bringing this up.
14
Given the invidious nature of tax cuts that have happened over the last 40 years, some revision needs to be made. Continuing to raise the cap on Social Security, at least to keep the system going reasonably would work, but still, it is regressive.
4
What is the justification for creating a no-man's land between the current cap of $132 thousand and $250 thousand? That is going to create all sorts of weird incentives as income creeps towards $250,000 and just seems like pandering to the upper middle class v. other professionals. And why is the rate over $250,000 higher than the current combined rate when you get no additional benefits? I see commenter after commenter say the cap should be lifted but that is not even what is being proposed.
3
@Tracy
What is the justification for freaking out about a proposal that would have to go through Congress first?
Nobody likes taxes but some of us our willing to pay more to assure more equal distribution of resources. Would you rather be a respected professional working at a job you value and even love or working at a minimum wage job and dependent on government programs which are mostly granted along with doses of disrespect and contempt?
I save my disapproval for well to do people who pay no taxes and are proud of it.
6
@Susan Bernard , True, it is not just privilege in income, but also privileges in work themselves. Besides, a high school principal is rarely as competent carrying out his/her job as a sanitation worker. My city has failing high schools, but consistently clean.
3
I cannot see why there should be any ceiling on social security contributions. It's a highly regressive tax because it is flat until it reaches a ceiling, meaning those with higher incomes pay a smaller percentage of their money into social security than those with a lesser income. Anybody who is even half-progressive can see that that is a bad idea. How can one object to paying the same percentage as those less off?
9
My thanks for this analysis. I am not going to vote for warren or Bernie now. Neither are my wife and my neighbors.
36
I’m a ‘high income professional.’ I will gladly shoulder a tax increase if it means I will enjoy affordable healthcare like the citizens of every other ‘advanced nation’ on Earth. If less of the tax I pay will go to fund ill-conceived military adventures like the Bush wars in Iraq - not one but two nightmares from which we still have not awakened.
If the separate Medicare and Social Security taxes I paid for the past three decades will not be pilfered and squandered and will instead provide much deserved security in my old age and for the generations of elders that will follow me. If my tax dollars will be used for the common good, not to subsidize agribusiness and petroleum industry profits and to fund fat, boondoggle military contracts, hugely profitable private prisons and immigration detention camps.
When Ike was President, we had a steeply progressive tax structure topping out around 90%. The rich were still rich and enjoyed luxuries. They did not throw up their hands, say ‘what’s the point?’ and quit. We had affordable higher education, built the interstate highway system, developed the space program, funded scientific research and the arts.
Since Reagan slashed taxes on the rich, income and wealth inequality has inexorably grown and is now downright toxic. The rich do not need to be richer than God; and they should not be in a position to buy politicians to ensure they and their families will remain so in perpetuity.
Time’s up. The New Gilded Age is over.
26
Buy politicians?
That’s so last election!
Now we have multiple billionaires who sincerely believe, that their great good fortune, is somehow indicative of their own ability to leap into the race and dominate- that they should be President, themselves.
3
It has not been established yet how much money one needs to feel secure. If one saves and invests like crazy, with a good outcome, one can still be hit with the nursing home expenses, or expenses for an Alzheimer facility, or assisted living. Such expenses can eat up quickly years of savings and good investments. I suggest that E.W. gives us free all three: nursing home expenses, free Alzheimer's care, and yes, free assisted living. While some such care may be free for extremely poor, it should be extended to others.
5
My guess is that there will be some form of community care (in-home) but free assisted living with memory care if required? Then who would go to a nursing home? All elderly people who can't live independently aren't going to get the equivalent of a small studio apartment with attendants at no cost - just isn't going to happen.
Or the Feds might just rebrand nursing homes as an assisted living centers - problem solved!
Or continue paying on that long term care insurance.
2
@Jp Or the government could add long-term care coverage to Medicare. Also dental and vision coverage.
@Frances Grimble :"Or the government could add long-term care coverage to Medicare"
Please see my comment regarding the "small studio apartments". My mother could not live independently for the last 3 years of her life. The cost of assisted living (not a nursing home) was $4000/month for an adequate facility in Michigan (essentially a small studio apartment). There were no Medicare funds or Medicaid funds available to assist in paying that tab. Do you really think this will be made available to everyone who cannot live independently on the Medicare budget?
If there is long term care it will probably be closer to the current nursing home scenario as currently supported by the state and Medicaid (plus the person's assets).
Yes, in-home care has been mentioned but that won't cover those who absolutely cannot live independently.
I'm in that category of people who would pay more if these SS tax proposals become law, as I'm in the top 10% of earners in the US (but way below the top 1%). I'm totally in favor of some form of increase in the SS taxes as long as we also find a way to make the 1%, the 0.1% and the 0.001% contribute a fairer share than they pay now. SS is a good program and we need to find a way to keep it solvent. Paying more into it is the only way to do that.
6
"[Warren's] Social Security plan would affect around seven million Americans, compared with the 75,000 that her advisers estimate would be affected by the wealth tax."
"Under Ms. Warren’s Social Security plan, and not incorporating any other changes to the tax code, a family with one wage earner making $300,000 a year, for example, would pay an extra $7,400 in tax each year."
So her Social Security plan would affect around 2% of the population, and raise their taxes by 2.5%?
I'm about 2% concerned.
6
We need to be more clear when we define a group as "Rich" when discussing additional tax. A professional couple earning a combined income of $250K is not necessarily "Rich". Analyzing this couple's budget would show that their income that is not taxed is being invested back into our economy through paying for housing, transportation, and other labor based services and not being saved.
However, what if this same couple happens to have 5 Million in investments. If they receive a 4% return on their investments that's $200K a year in investment returns. Additionally, If they reinvest the investment returns, their investment balance and returns grow larger annually.
If the couple earning $250K in salary with 5 Million in investments loses their jobs they can maintain there lifestyle by living on the return from their investments, without depleting their wealth. Depending upon the investment strategy portions of the investment income would be taxed at the short term or long term capital gains tax rate of 24% or 15% respectively, depending on their actual income tax bracket.
2
Don’t worry. Warren has a plan to destroy that accumulated wealth via taxing unrealized capital gains in addition to the wealth tax. After the markets sell off dramatically as liquid investments are sold to pay cap gains taxes the threshold for the wealth tax will need to go down over time from $50 million until it affects anyone with a brokerage account.
5
$250000 is rich even in NY.
When people earn more they move to a “nicer” neighborhood where they often feel poor compared to neighbors. And when they feel flush they more to an even pricier neighborhood. Unfortunately this means almost everyone even millionaires do not feel rich. The only way to feel rich is to stop comparing yourself to Warren Buffet and start thinking about the bottom 50 percent in the world many of whom suffer malnutrition and lack basic necessities.
I've wondered for years why they don't take the cap off Social Security. Seems a pretty painless and fair way to ensure the coffers of SS are filled. With endless studies showing how ill-prepared most are for retirement, this has become a very needed income for so many.
Somehow we as a country have to move off team red and team blue to a thoughtful discussion on what we want our country to be. Odds are anyone currently collecting SS would welcome an extra $200/month. It also seems those who'd be affected by the removal of the cap wouldn't notice. Instead their paycheck would be the same year-round instead of getting a bump when they reached the cap.
7
Social security was structured as a pension where payouts are linked to amounts paid in. The cap on tax reflects the cap that exists on amounts you can collect later. Part of gaining and keeping broad support for the program has been this structure.
5
This is a misleading column in which numbers are presented without context. Here's an example: "For those making millions of dollars and living in a high-tax location like New York City, the combined marginal tax rate — including federal income tax, Medicare and Social Security tax, and state and local income tax — would be about 63 percent."
First, I think that NYC might be the highest taxed place, that is, there is no "like New York City." Second, what is the combined marginal tax rate for a person earning $100,000 today, in, say, California? It's 24 + 12.4 + 9.3 + 2.9 = 48.6%, where I have used the total contribution to Medicare and SS, as Mr. Irwin did throughout his column. The $100,000 earner certainly pays a higher percentage of his income in sales tax and likely a higher percentage in property tax than the high income earner. I don't see that 63% is out of line in any way (if Mr. Irwin has calculated the way I have).
4
Social Security is now, always was and always will be a transfer program. It doesn’t matter that you think you will — maybe — get back something approximating what you put in, the fact is that the government taxes money from you now and gives it to other people now. In the future they plan to tax other people and give some of that money to you.
Telling people different was dishonest politicking, and the government is going to have to face the consequences sooner or later. Might as well face them now.
3
I’m guessing you haven’t heard of the SS trust fund. You are mostly right but we bring in more than we spend and that money goes into the trust fund, which on a cash flow basis doesn’t actually exist because the government spends that too, but it’s a nice-sounding theory at least.
1
You are confusing the facts. Payouts from social security are linked to the amount paid in. Those who never paid or had spouse who paid in cannot collect. The amount received is linked to amount paid in with some adjustments on low end of scale.
There is a trust fund that is used to buy treasury bonds which means the surplus is just offsetting the deficit and if government has fiscal issues then it will not make good in social security or any other obligation.
2
A missing piece in the article. Most professionals pay for insurance for medical that is chosen by their employer. If the increase is offset by the shift from paying wages into insurance or into government that isn’t an increase in overall costs to people. It is a shifting if costs from paying insurance to government.
This would be disingenuous in this article to crane things as costs.
Also many professionals have massive student debt stat is unforgivable. Which is also totally against the concept of liberty and that the lender has the sole responsibility to lend to those who can pay back so we don’t create slaves and debtor prisons. These costs would benefit the professional class directly over the long term.
Child care is also a cost. You talking taxes but neglecting the basket. Meaning you are acting like they will be paying for what they currently have and place taxes on top.
This is being disingenuous and is an attack upon their policies and against progressives. This is why the main stream media is seen as having an establishment bias.
3
Student is not imposed on anyone. Freely entering into a contract that you hope will fund a better future us the essence of liberty.
2
Nothing is set in stone at this point for taxes. At least the Democrat Party is attempting to tax the wealthy, whereas Trump gave the uber rich an early holiday gift with his taxation plan to save money for big businesses.
Has any of that wealth trickled down to the middle class? Of course, not. Corporate American pocketed the money they reaped from Trump's new taxation rules. Corporate American did not increase wages or health benefits or do anything else to help middle America better their lives.
I trust the Democrats to figure out a system that helps the average Joe, far more than the Republican Party, which has so far, just helped the fortune 50o companies. That's why most big businesses are Republican. They know which party will butter their bread.
2
Let me just go ahead and call my shot now. When and if I reach the $300,000 per annum income level, I declare that I'll be fine with paying an additional 7.5 grand a year in taxes so that my fellow citizens have access to healthcare, old people don't starve, and we no longer have +100,000 homeless school kids in New York.
Thanks.
4
Cutting through the noise - right now, there's an income ceiling above which you don't continue pay SS contributions, because there's an exactly corresponding ceiling on the benefits you are going to receive.
So there's a sense of unfairness in a proposal that says, right, now there's no ceiling on how much we tax you for SS, but we're keeping that cap on the benefits you're going to get. And the proposed system is not nuanced - earn above $250K and we're taking 14.5%, without offering any incremental increase whatsoever in your benefits (whether you're earning $250K or $250M.)
I appreciate all the arguments about the upper middle class being required to give more to those less economically well-off, but human nature being what it is, something where blunt-instrument unfairness is so easily identifiable is going to raise hackles.
11
This tax will directly affect me. I will cut back on work if I lost most of my income above a certain threshold. We don’t want these unintended consequences. People who make a lot do do because they add value, which adds value to the economy.
12
@Ben
Do you really think people who own hedge funds add more value than teachers and nurses, comensurate with their relative income? Did the former CEO of Wework deserve his billions in terms of added value to the economy? That's what rich people always say--makes them feel good! They also always threaten that if rich people pay more taxes, investment will go down.
2
@rstoner Hedge funds are a red herring. Your doctor, dentist or lawyer will be happy to take 10 extra weeks off a year once the rates on the last dollar in gets too high. I know I will. High end services will be more scarce and more expensive, and actual tax revenue in will not rise as much as estimated.
2
Remove the cap but decrease the rate so as not to inflict more pain on the middle middle class. A group with a lot of votes that is still licking their SALT tax wounds.
4
If you want to complain about the SALT deduction loss talk to your state and local representatives and have them get their spending reduced. High SALT <=> s sad pending problem.
1
Fun to watch the liberal blue staters squirm at what their candidates are proposing.
16
That’s only because the bulk of the additional burden on blue state earners would be funneled to support largely red state residents, who already receive a disproportionate share of government benefits.
3
I wish people would stop using wealth and income as the same - they are vastly different. Typically one begets the other, however there is a time / risk / investing in ones self element that needs to happen to turn income into real wealth.
While i despise the current administration, i am reminded of the saying that “socialIsm works until you run out of other people’s money to spend”.
The current administration is all about winning by putting other’s down. It seems like this lesson has been picked up by more than a few of these hopeful candidates. Seems like a lot of comments are licking their chops at the prospect of a nice juicy free handout...
8
Can you blame them for the system which is rigged against them?
To be financially successful today if you don’t have family money, in many cases you need to take out student loans for a good education and move to a high-rent city. Then, when you actually make the income necessary to service the loans, pay your rent, and have a decent standard of living, they want to hit you with this. Excuse me for not being overjoyed.
28
But the idea behind the taxation is to make people to be financially successful without student loans and unaffordable rent. How bad is it?
@yulia Doesn't help the person who already ponied up a bit
3
This pretty much tells the tale ...... "For a sign of how ostensibly progressive Democrats can recoil at tax changes that affect their pocketbooks, nearly all Democratic senators recently voted to eliminate a cap on the deductibility of state and local taxes. The deductions favor high-income people in high-tax states, and the cap was part of the Republicans’ 2017 tax overhaul."
Why exactly did high tax deep blue states attempt to negate this part of the Repubs tax overhaul? It just upped the tax burden on wealthier people. Isn't that the name of the Dem. game these days?
10
Too much too soon. It doesn’t appear that all these issues have been fleshed out. Republicans will have a field day with this.
Make sure the plan is fully defensible to the coming challenges and attacks.
Would some making $150k in Chicago or Philadelphia feel rich?
6
The problem is that this is not the only way that many of the Democratic candidates are going to raise taxes on people who make really good livings. Instead, there is this tax, that tax, another tax, etc.
And why? Isn't the goal to get a madman out of office? Why tell people who want that goal that they are going to have to pay, heavily, to accomplish it?
Keep your eye on the ball. The "ball" is not to solve all of our problems by taxing everybody over and over. The goal is to get an insane person away from the nuclear codes. The first rule in accomplishing this should be to not alienate ANYONE.
11
Instead of hammering down those that have achieved with higher tax levies, why can't we instead focus on lifting income (severely) up in the lower and middle income ranks? Why is no politician talking about how every American should have realistic access to a six figure salary regardless of any biases or impediments?
Another issue altogether is that national taxes are not regionally adjusted to cost of living. Save that rant for another column.
3
That will be great, but what is your ideas about increasing the salaries to 6 figures? I think it will get ears of everybody.
Social Security is/was massively necessary for the United States, and needs to be maintained. The Republicans have tried to undermine it out of their own sense of "what should not be" since it was invented. Having medical care accessible to as many people as possible is another necessary goal. There are things in the Capitalist world that don't just "fix themselves" through the magic of laissez faire self-correction or whatever. People get old. People get sick. People are born with conditions that never allow them to fend for themselves, or have opportunities that are severely degraded by existential circumstance. Of course we can pay for this. Republicans squander taxpayer money on anything rather than deliver a service to American citizens. If all the money they've wasted were put in the service of needed social programs, quality of life for everybody would be far more robust. Greed is not Good. And we are far beyond the stage to believe in the Republican magic of "trickle down".
2
Tax the millionaires and billionaires but leave the upper-middle class out of it! This is a big mistake and is exactly why many upper earning professionals vote Republican. These are people that often have advanced degrees, have put a huge amount of work into getting where they are at etc. I know many doctors, lawyers etc. that would vote Democrat *if* they could assured that the Dems won't raise their taxes.
27
There are plenty of people with advanced degrees who do not get 250K in salaries. The system allows these people to get such salaries while other get 8$ per hr. Clearly, the high incomers benefit from the system more, and therefore they should pay more.
As one of these “high-earners” in New York, I would feel much better about the tax hikes if those who are richer than me are paying a higher effective tax rate (on income and on wealth). What pains me is the multi-millionaires and billionaires who derive their riches from inherited wealth and passive investment income and get to pay lower taxes!
13
A few decades ago the Social Security Administration predicted a shortfall as the Baby Boomers aged.
So the raised payroll taxes. Along the way congress jammed more unfunded programs under the social security umbrella and now the program is careening towards insolvency.
Higher earners already get far less back then they contribute. And if they have other earnings, the government claws back funds via income taxes. Democrats will only make that worse if they raise the cap without raising the benefits.
Of course all of these taxes are not directed at the middle or lower income earners despite their being the largest beneficiaries. Why would any thinking professional volunteer for betrayal by the Democrats.
10
The high earners do get much more from the system, that's why they have high income, so it is only fair if they contribute more for well-being of their less lucky brothers- citizens who are benefited much less from the system.
RE : Democrats Would Tax High-Income Professionals
There are simply not enough Mega-Rich to raise the money required for the Democratic Proposals
It is the upper middle class that has to come up with the money.
It is just like Obamacare - you can not add 10 million poor to the health care without finding the money for it somewhere.
Somewhere, is the upper middle class. If you are a member of it - that is why your health care costs went up.
The lower middle class living from paycheck to paycheck is unable to contribute significantly, the Mega Rich are to few, even when taxed at 75%
And with the Democratic Plans MORE has to follow. This is not necessarily bad, Swedes pay a lot more in taxes than Americans, but they also get a lot more back rather then flowing in a defence budget that is larger than that of the next 5 Nations on the globe combined
6
@Lars
Facile for the Democrats to vote to remove the cap for state and local taxes and mortgage interest when they know Republicans control the Senate and it will never pass. Instead of voting for something that will not happen, why not prove Democrats care about constituents by voting to not increase the federal budget but instead cut it to show taxes won't be raised. Right... didn't think that would happen.
3
Cut what? SS That support millions? Only Reps have heart to do so.
I am definitely in favor of releasing the cap on social security taxes because it is a retirement benefit for everyone. We all benefit.
5
The annual budget deficit is a trillion dollars a year and some pols are dreaming up ways to spend more. Really??
Current structure of Social Security with some linkage between paying in and collecting has been key part of its success. Breaking the link will damage the broad support for the program. The wealthy will view it as poor return on investment and some of the poor will view it as welfare or charity. Either way the near term gains will spell long term doom.
8
I disagree with the $250,000 earnings being classified as "high earners." Depending on where you live, this amount doesn't make you "rich." Does this apply to single people, or to the total household income? My husband and I combined will definitely exceed that mark before we both retire and we are not "rich" and need all the money from our paychecks we can get.
45
You may not be rich, but you are definitely well to do. If you and your husband “need” all the money you make, how is it that families survive quite well on half your incomes? Also, if benefits were greater, you would “need” less money to survive.
3
@NW
Paying another $20k a year in taxes for another $200 in benefits is not a good deal
@Jessica good question not answered by the article.
1
This does not raise taxes on the wealthy. It gets rid of a tax break that applied to only high earners. It changed the social security tax rate from a regressive tax to a regular tax. Change the tax rate. We’re fine with it
5
@Graham Wink
Funniest Comment of the Week Award! You're not paying more in taxes when your taxes increase? No, instead it's you have been getting away with murder not paying MORE taxes, and the gov't is here to assure you pay and pay and pay.
2
I admit it. I don't like taxes any more than the next guy. On the other hand, I like the idea of living in a civilized nation. There is a quality of life cost for walking down the street and not tripping over homeless people. And for that, I am willing to pay taxes. Its a cost of doing business.
Now I am also an above median earner. I know that $250K is not opulent in places like Seattle and San Francisco. On the other hand, the state median income in those locations is around $57K. That's half of people living on about a fifth of what you make. Or less. So, I really cannot feel that sorry for myself. And I would feel embarrassed if someone else felt sorry me too.
15
@Andy Makar
Not wanting to pay yet more to this rapacious gov't and people who exist to take is not feeling sorry for myself. The people who actually feel sorry for themselves want someone else to pay their way.
3
I want to look at this through a different lens: has the payroll been keeping up with inflation on the first place? There may be an adjustment that simply puts the level back to where it should have been already. You can look at the minimum wage in the same way.
3
This tax would hit me but I think it’s a great idea and still support Warren. I do, however, agree with the other top commenter that it doesn’t make sense for those of us making $250k-$1million annually to be paying the same tax rate as those earning millions. But even if it passes this way, I’m still for it. The wealth inequality in this country needs to be remedied.
15
According to CBO, removing the cap without increasing benefits would affect only the top 6% of wage earners and cover 70% of the Social Security shortfall for 75 years.
If we do nothing, benefits get cut about 25% in the early 2030’s, to bring spending into line with revenue. The longer we wait to shore up the program, the more drastic the measures required.
6
I'm a Democrat who lives in New York City and I'd be willing to pay more taxes if the tax system were equitable but it is not. If I and others like me pay more taxes that means proportionately more federal tax dollars would be provided from Blue States to Red States. As it is the Blues are handing huge subsidies to pro gun, anti-abortion pro-Trump folks in Red States. Thanks, but I'll pass on the tax increases.
12
@ZHR - OK, but you better vote for Trump if you want to walk your talk.
2
Why? Trump hates the Blue States and increase their taxes by cancelling SALT?
All it takes to beat Trump in 2020 is a rational, balanced, moderate plank. All it takes to lose to Trump is extremism on the left. Most voters are moderates who don't believe in revolutionary change, which historically causes unpredictable, unintended consequences. Science advances empirically by careful experiment and scientists are conservative in their predictions. When radical know-it-all politicians in love with the sound of their voices, like Bernie and Warren, propose simplistic, a priori, untested change, you can be sure that bad things will happen. Sounds a lot like Trump.
30
I am wondering how Trump got in the WH with all these centrists around?
The Democrat’s definition of what constitutes “rich” is absurd. Upper middle class professionals are not “rich” or wealthy. They still have to worry about saving for retirement, paying for education and cannot afford anything and everything they wan. Unfortunately, because everyone is so fixated on an Instagramable world of celebrities and what they see on television and in the movies, people conflate an admittedly comfortable lifestyle with those of celebrities who own 8 cars, 4 homes and a yacht.
52
Well, they will be better with secure SS and affordable education. Of course, if they want private jets, it could be a problem .
@yulia Private jets - funny. No - that's still in the realm of celebrities.
“Are we prepared to look people in the eye and tell them that with the enormous wealth disparity we have that people who have worked all their lives shouldn’t be able to sustain themselves with dignity?” Mr. Larson said.
Yes, yes we most definitely are
3
The tax hit on high income earners would likely be even worse. Employee Social Security taxes are paid with after tax dollars, but Social Security benefits above some ridiculously small number are also taxable (and some States also tax those benefits). So, if you (now) consistently pay the maximum amount, you get to give a bunch of it back when your benefits are taxed. That would be much worse for the so-called high earners.
5
Plus, you pay an enormous penalty on your Medicare premiums, up to several hundred dollars a month.
3
This might be the most depressing comment thread I've read in a long time.
Our country is imploding. It is falling apart physically and socially, and all many people can think of is "what about me". Very few are saying "what about us". All of us.
Something has to give. The longer this goes on, the worse the giving will be at the end.
9
@gesneri Why shouldn't you vote your economic interests? After all, the left characterizes Appalachians as "voting against their economic interests" when they vote GOP.
5
How many people have 250K in income, considering median in the. country 64K? How many people will benefit from stable SS, free healthcare, affordable childcare, affordable education? So, shouldn't they vote for their interest?
@yulia I don't know - to listen to the left, there are enough billionaires to take care of everyone....... except we all know that's not true. Even at 100% confiscation (which you can only do once by the way) the money will still be gone quick.
This is just the start of how the Democratic tax "plans" will be unwrapped.
First, soak the ultrarich with likely unconstitutional wealth taxes. Hey, it won't affect anyone but 0.01% and they make good bogie men.
Then, we start nibbling away at Social Security, again guilting anyone who might object.
Just watch...next will be marginal tax rate increases for the upper middle class.
But at least we'll be able to smugly say that we're paying our fair share!
10
Well...yeah. Guess what: I'd rather pay more and guarantee the existence of social security for those members of my family who will depend on that payment because they have been saddled with low wage jobs that don't pay them enough to allow for "retirement" savings.
Here's something most in the American working class don't know: Many highly paid professionals get a nifty little bonus for the last several months of the year when they hit the SS tax ceiling. All of a sudden -- come October, November, December -- they are even richer than they usually are because the SS tax isn't being taken out of their paychecks.
Suspending the SS "vacation" for these high earners would go some way in building up SS reserves and making the system more equitable. After all, for those of us with money and retirement savings, that SS check we get in retirement, no matter how "small" it may seem to us, is still a nice piece of change and a hedge when the stock market falls.
4
@historyprof
In your eyes, not paying more in taxes is getting an undeserved bonus? Does it occur that the money is owned by the taxpayer?
5
Yup, starting in September/October, my husband’s take home pay jumps. We honestly don’t need the money.
@historyprof It's not a bonus - its compensation earned -- Just not confiscated.
Raise the cap. This was proposed many years ago by none other than Mike Huckabee.
2
Hmm. Wonder why SS tax is not progressive like income tax. And come on. When your get a raise past $130k them you get the extra SS taxes too
1
I live in a Democratic leaning state and paid more income tax last year than ever under the new tax plan designed by our "genius-in-chief". And I don't even earn half of $250k.
4
I assume, despite trump being the worst president you could plunk off the street, he still has a pretty good chance with proposals like this from the democrats.
All these proposals need to be looked at in baby steps and not wholesale change. I'm sure there are some good ideas but now is not the time to give trump the ability to say "those democrats are crazy socialists..."
After all, we are supposed to be living in a "democracy."
10
This made me smile. All was well when people believed the fat cat plutocrats were going to be the only ones paying increased taxes. But I always knew better. If upper middle class professionals like the idea of taxes upon the wealthy, they shouldn't be be surprised when they are seen as wealthy as well.
20
When Trump and all those corporations offshoring their income in tax havens pay their fair share, I'll be more than happy to have my taxes raised.
7
As a democrat who is in this high earner bracket, I agree fully with this. But I think that's emblematic of the democratic party as a whole, because we tend to vote for the best interest of everyone-not just for ourselves, or even for those in our coalition, but EVERYONE.
Taxes aren't theft. Taxes aren't something to be feared. Taxes are the bill we pay collectively to live in a place with a high standard of living.
8
In a lot of places, $250K isn't a high income because of the exorbitant cost of living. It's time to recognize the vast differences in the cost of living by location.
You could say, move to a cheaper place to live, but the jobs aren't in there.
Remember as well, the Trump tax cut for the rich was also a tax increase for everyone else. Soon the double deduction ends and the middle class deductions are gone.
12
Yeah it's well known it takes 1,755,890.39/year just to sqeak by in SF ans NYC
Don't cry for a break while building equity in real estate.
3
Democratic voters will be more sensible than this. Voting for tax rates higher than those in Sweden without the commensurate benefits for all (subsidized healthcare, college, maternity benefits, vacations, etc.) is an electoral disaster. This paper seems charmed by the far left candidates and yet Biden and other moderates will carry the day and are the only hope to oust the current occupant of the White House. Otherwise, Democrats face a 40-42 state electoral college blowout. Democrats need to heed the recent advice from President Obama, the only Democrat to win two terms with a majority of the popular vote since FDR. This is a very winnable election unless Warren or Sanders is the nominee. Not to mention, even if elected, neither Warren or Sanders would have the votes to implement their tax plans. The collateral damage would be suburbs reverting to their Republican voting patterns.
19
But Dems do offer to install the benefits like in Sweden: free healthcare, free higher education, affordable childcare.
If I were lucky enough to be in a high income bracket, I'd be willing to pay more taxes -- though I don't think the program goes far enough in equalizing what should be paid. In 1930 -- before FDR was elected President, but after the stock market crash -- the country elected a Democratic Congress, and they instituted tax rates that lasted for decades -- I'm not sure how long, but certainly into the 50s, when I was first paying taxes. During this period, the top rate was over 90 percent -- though that only applied to moneys earned over a substantial amount -- and the rest of the scale was graduated downward. This didn't have too much effect on equalizing income during the 1930s, because there were so many unemployed, and the whole economy was operating at such a low level. However, in the 1940s and 1950s, during World War II and thereafter, employment picked up, the country became wealthy and the tax helped to equalize incomes. If we Democrats are serious about ending wealth inequality, we might consider what in my youth was called a "progressive" income tax structure (you should pardon the expression). I'd welcome Republicans who feel likewise, though given the Republican role in rolling back taxes on the wealthy, particularly recently, I can't say how many there would be. Something might be done to cushion the blow by allowing deductions back into the fold. That makes me sound very old-fashioned. Then again, I don't automatically equate "new" with "good."
1
Nothing is easier than spending other people’s money.
15
@Piri Halasz
First, it’s not luck, it’s the choices you make including how hard you are willing to work
Second, if/when you get to that bracket then let’s see how you feel about paying even higher taxes
6
@Piri Halasz I sort of resent the notion that I am not entitled to comment because I am not in a high-income bracket. Also the implication that I have not worked hard all my life -- how the heck would any of these readers know what I have been doing with my life for the past 80 years? The idea that all you have to do to make a million is "work hard" is ridiculous. There are plenty of occupations that are very rewarding emotionally but do not lead to life in a gilded cage.
Thank you for sharing this. The trump tax plan raised my taxes over $20000 by eliminating state deduction and changing the second tax bracket to tax more income higher. The doing wells are the targets in both Republicans and democrat tax plans. Yet this goes unnoticed
7
It’s the “doing well wage earners” they are all after. If we were doing well by loving off investments, we’d be paying a lot less in taxes.
6
I'll never understand all these opaque schemes and potentially unconstitutional "wealth taxes." How about we just start with much higher marginal rates on very high incomes? How many people would object to 50% on income earned over $1 million?
I would.
12
Bernie gets top marks for honesty. Unlike Liz, who promises that she’ll soak only the super duper rich for the trillions her grand plans require, Bernie candidly says up front that to fund his more modest social revolution, everyone will be taxed like never before. But we’ll all be happier citizens without spare spending money to cause mischievous temptation.
2
It is true that if we got rid of the cap on Social Security it would hit well off, Democrat areas the most, but there is nothing new than that. When Trump came up with his wonderful tax cut, he de facto put more of the burden on Democratic leaning areas by getting rid of salt deductions, while giving a huge tax cut to low tax red states, so in the end Democratic areas end up picking up more of the tax burden than we already do while futher reducing the taxes paid by red states.
The argument about Social Security being a trust fund, that it isn't fair that someone pays in more than they get out is a joke, pure and simple. The reality of social security is it has become since the Reagan era primarily another form of general tax revenue, one that pays out benefits, then used surpluses to fund the government. Sure, they leave an iou there in the form of t notes, but in the end that is paid for by tax revenues.
What this means is that many workers pay SS on 100% of their wages, but the CEO of a big company pays off their SS on January 1st, they pay a tiny percent of their total income. Hedge fund managers, whose wages are not considered income, literally pay almost nothing into SS.
Unless they are willing to make SS what it once was, a lock box program that cannot be touched, then getting rid of the cap and hitting investment income above a certain amount with SS is only fair, otherwise SS is nothing more than the worst example of a regressive tax there is.
5
Except for one sentence where you say ‘some’ candidates are proposing this your headline and rest of your story implies all Dems are proposing this and that very inaccurate. In addition if you took away the Trump decreases the change wouldn’t be as dramatic. Those should never have happened, greedy gop politicians only did it to help reelection and because it helped most of them.
I think it would be more acceptable to logical fair minded citizens if everybody pay the same percentage that middle income classes are paying now. A flat tax across the board with the only exception being for those under the poverty income level. It would generate a lot more in taxes than are being paid now and is the only truly fair way to do it.
5
@Carla Not to signal you out because so many are in the same situation. My guess is you originally came from a family of some kind of means, always had a hot meal, heat, a semblance of safety and nurturing, education, role models, access, etc. It is all so natural and obvious that the amount of privilege provided can't really be understood. Here's the real real reality from NYT— 43% of NYC's population lives at or below poverty level, defined as family of 4 with an income of $32,000. NYC has 1.2 million school kids, 114,000 of them are homeless. If you attend any kind of church or spiritual practice ask yourself this-- would Jesus want you to continue to hoard money and resources when so many are at need?
2
You only mention Warren and Sanders and other than your stating that ‘some’ Dems running for President would do this in one sentence of your article... the rest of the article makes it sounds like all Dems would do this as does your headline or title to the story. In addition it doesn’t appear that Trumps reductions in taxes are considered when assessing how much they would go up. If you go back to what the taxes were before Trump took over the change isn’t nearly as great.
I think one way to make it fairer, the amount taxed would be Adjusted to the cost of living indexes as they are hugely different. ie: with the cost of living index in most suburban areas being so much higher, an adjustment so that everybody making say $250-400k or less is paying the same percentages of their income in taxes. That would generate a huge increase in taxes but be much more ‘saleable’ to those who’s taxes are going up. Or have just a straight tax across the board..., take what middle class percentages are now and do that across the board regardless of how much you make. That would appear a much fairer way, achieve much the same and is much more acceptable to logical fair minded folks.
This proposal and the Republicans’ cap on state and local income tax deductions are vastly different beasts. The difference is laughably huge, though one might not realize that after reading this article.
The Republicans’ tax bill was an attack on blue states and blue state politics. It targeted blue state programs by raising the tax burden on blue state residents. It targeted public schooling, for example, buy effectively dramatically raising taxes for those who pay the largest share for good public schools. The Republicans favor private education where the wealthy gain better educational opportunities than the poor. The Republicans were trying to tear down public institutions with their tax while transferring the money gleaned to wealthy people (aka regressive taxation).
These Democratic proposals are completely opposite so its hard to compare Democrats’ reactions to the two. As usual, though, the NYT appears to have a strong and consistent desire to mislead our populous when it comes to these issues. Get this - The Democrats are proposing taxing themselves in order to help all (all) Americans directly. This is why progressives rock.
4
How exactly does this proposal help those who will pay more and get nothing in return?
How much of my family’s money - that we earn from jobs, since we do not come from wealthy families with trust funds - do you want yo take from us?
3
As someone who would also be hit by these taxes...A bunch, frankly, if you’ve got that much. Look, I would pay higher taxes with these proposals. The honest truth, though, and there are many studies to support this, after a certain point money doesn’t buy happiness. So what else are you going for, mega happiness? Try meditation instead.
How many times do you (or I) have to line our nests? I have a lot of smart, capable, hard-working friends who simply didn’t luck out. Maybe you don’t share that experience, idk.
1
"That would make it harder for high-income people to avoid taxes by reclassifying their labor income as business income. This has the potential to reduce the accumulation of savings, and over time reduce investment in the economy."
This is where this article goes off the mark. It has been demonstrated, consistently, that high income "savings" do not convert into net-positive outcomes for the overall economy. They may invest some, but will also use it to build onto multi-generational nest eggs that further stratify socioeconomic divides.
Trickle-down economics is a sham. Can we stop pretending that it isn't?
1
I have to laugh at all the people writing that $250k per year doesn't make you rich!!! It does, so stop it.
The cost of everything except housing is basically the same throughout the US. The median price for a house in the US is $300K (Sept 2019, US Census). The median income in the US is about $64k. Housing costs 4.7 times salary. If you're making $250k in San Francisco, then you can buy a residence that costs $1.2M. The median home value in San Francisco is $1.3M and $930k in the SF-Oakland-Hayward metro area (Oct 2019, Zillo) .
But... the person making $250k has way, way much more money left over after housing expenses. And as we all know, all other costs across the US are pretty much the same. So now we've established that the person making $250k is rich and, accordingly, should pay higher taxes.
7
Marginal tax rates in high tax areas like NYC will become the highest marginal tax rates in the world, at 63%, higher than Sweden. How can that be, if Europe has so many more services (primarily health care)? The answer is that Europe has a lot of flat taxes, in particular a value added tax. A VAT is how European social democracy is funded. I don't want to knock Warren, but the fact of the matter is that her tax plans for paying for Medicare for All have zero chance of being realized; a six percent wealth tax will never happen. When stock market returns average 7%, you can't take 6% and expect people to invest in the US economy.
VAT's are unpopular in some quarters because they are flat taxes. That is true, and that reflects another big difference with Europe. In Europe, tax collection is much flatter; the US has the most progressive tax system in the world. The big social democratic economies have a system of relatively flat taxes, and benefits that are highly skewed to poor people. That is to say, means-tested benefits rather than universal benefits. If we want to get serious about social democracy in this country, we need a VAT, flatter taxes, and more means testing of benefits. That's the only social democratic system that has ever worked. That's not the system FDR created, but we have to get past that and join the 21st century.
10
Mr. Parmeleau needs to stop using the term “traditional welfare program”. Social security has never been a welfare program. It is a retirement plan paid into by both Employers and Employees so that there will be retirees with some income for their so called “golden years”.
We need to stop listening to any one who describes Social Security as either a welfare program or an entitlement program.
7
@Jean SS is a welfare program for the millions who claim to be on SS disability and are not disabled. I personally know quite a few of who have taken that road and are fleecing honest people like me who pay their taxes and don't cheat the system.
5
@Sarah99
I cannot say you are right or wrong about the people you know. But one thing I do know, unless you pay in, yo cannot receive benefits. Those you know, had to have paid in first, before they would be eligible. Therefore even Disability payments are not welfare.
1
Taxes are the price we pay for a civilized society. If I pay more taxes it really means I’ve made more money. Bully for me.
What am I missing here?
1
Democrats would tax more anyone with an income considering we already have a sky high national debt and not much dough to go around for democrats proposed spending.
3
Here's how it works folks... The rich will find loopholes, take their money "offshore", or leave the U.S. That leaves the middle class to make up for their vacancy... then we are all equal... equally poor.
12
You hit the nail in the head. Capital flows are much more fluid these days as compared to the 40’s and 50’s. The ultra rich will move offshore, invest offshore, etc. That leaves the middle and upper middle classes holding the bag without commensurate benefits. Democrats need to heed the recent advice from President Obama.
4
“What you pay in roughly corresponds to what you get. Once you start taxing certain levels of income without providing additional benefits based on that tax, you are breaking that link.”
That isn’t even true today. Working straight from your teens through your 70s you still top out at just over 3k per month. That may be fine in some locals but that’s not much of anything in the more affluent areas of the country. So, I don’t think that fairness argument is the right angle to change the contributions.
1
They keep expanding social security benefits and they wonder why the program is going to run out of money or we need to keep expanding the rate and income range.
Here is an example, i have a friend who is over 65. He and his wife are pretty well off. Now here is the kicker, since he is 65 and he has a son under 18 and still in high school, the son gets check every month for $500. By the time he reaches 18, they would have received over $10,000.
Who makes up these rules and what is the justification for such a benefit? It is out of control
3
The Democrats are doomed.
16
Here come the heroic defenders of the well off. Expect many more articles like this. These are the root cause of our budget problems. If all the money goes to a group that cannot be taxed, bingo.
1
Isn't the fact that people only have to payroll taxes on their first $132,900 EXACTLY the problem with our society? Why does someone earning $75 K per year (let alone $25K) have to pay payroll taxes on 100% of their limited income, but a "high earner" (rich person) only pays on a portion of their income? Why? It is neither fair nor equitable, and hurts the low-income earner and the consumer economy. Tax 100% of EVERYONE's earnings, or reverse the cap, and only charge payroll taxes at incomes OVER $133K. They can afford it much better than the retail workers who are paying it now.
3
It is because the program was never meant to be a Welfare program. It was designed to match roughly your contribution with what you get out of it. Taxing your entire salary with no cap would then mean that you are contributing exponentially more with no difference in your return when you reach 65. No point in calling it social security at that point.
The problem is that this actually ONLY affects people who work very hard for a living but are NOT billionaires. The people making hundreds of millions of dollars are completely sheltered with capital gains exceptions, whereas the people who derive their wealth from earning a salary have zero tax protections and are still trying to save for retirement. Who is that? Doctors, surgeons. People who sacrifice their youth to save lives. It’s ironic that they would be the ones taxed to pay for a health care system that reimbursed them less.
Starting to earn a living at 35 results in 15 years of lost income potential, compounded by enormous student loans that keep doctors in debt for over a decade after starting their practice. Ultimately, there will be a massive brain drain away from health care and into more lucrative specialties that do not demand a decade of sacrifice and loan repayments.
17
Shoring up Social Security will also insure that people with high incomes will receive their maximum benefits when they collect Social Security, I would think.
Also, if high earners are going to be taxed more, their future benefits should be increased.
In fact, I think a Federal sales tax should be instituted to help pay for Medicare for All. If everyone's going to use it, everyone should pay for it.
Sure, the wealthy should pay their fair share, and so should everyone else.
4
Yeah, but do we really need regressive tax to fund public programs? The rich are the beneficiary of the system, but we want the poor to pay for this system? Great idea!
1
Thanks NYT for the interesting article. The one thing I'm left wondering is how on earth is there no mention -- and I therefore presume nothing in the current Dem candidates' proposals -- to deal with the "carried interest" element of this mix? I'm just a 100% commissioned salesman for most of my 56 years, and live comfortably provided I have worked hard daily, and can continue to into the coming years. I have no beef in this for either side, and am a Dem who is willing to continue to pay my share. But the proposals in the article seem to omit what is well known to be possibly the LAST GREAT LOOPHOLE for high-earning individuals. Even if the carried interest issue doesn't get addressed by our Dem leaders (because it won't be by the GOP), I'd like to see at least some of them factor this into their thoughts and their public statements -- which I've yet to read or hear about.
2
@Andrew - Only 15000 tax returns out of 165 million use carried interest. It is just not significant in the larger scheme of things. Only a few billion additional dollars in tax would be collected.
Instead why don’t we place an absolute minimum tax on corporations? Why should FedEx pay zero? Tax a small % of corporate revenue. Couple that with an additional marginal tax bracket for income above $1.5M
2
@Rick - Corporations are not consuming entities, and cannot cut consumption to pay tax. Their only source of funds is their customers. They will just increase the price of every good and service they sell, in order to maintain the same return on invested capital. Who pays? You pay!
1
There's no justification for capping payroll taxes - which provide about a third of the government's revenue - at $133,000. Still it would be a large jump in taxation especially for family incomes above, but not far above that level. A phase out both by income and over time is the obvious answer - even if it's obviously a fudge. Gradually phase in payroll taxation of income above $133,000 but below $500,000 - perhaps over 25 years and in the interim phase in payroll taxation on income between $500,000 and $1,000,000. If you have a million dollar income you can afford to pay payroll tx at the same rate that someone making minimum wage does.
5
I’m retired now. I was a freelance software engineer. At the height of my business I was working 70 hours a week and in many years I took only a few days of vacation a year. I worked so hard because I loved the work.
When people asked how I’d become successful, I’d say “Call me at my office at 7AM on Sunday morning and I’ll tell you.”
There were years when my income put me in the top 1% and I paid more in taxes than most people make. I don’t begrudge the amount of taxes; I was making my contribution to society.
But I wouldn’t put in all that work if, at some point in the year, I’d made enough that all my remaining work for the year was taxed at 90%. I loved the work, but I’m no one’s slave.
35
Well, it could be healthier for you to work less. I don't understand your complains. If you think your taxes are to high, work less, get less and pay less in taxes.
3
@yulia You miss the point - once you hit a high marginal rate the penalty for working less is minimized. That's what makes it an attractive alternative. That's easy math.
1
@yulia
You missed the point. If hard working people work less and produce less, the economy will suffer. Did we learn nothing from the Soviet Union?
2
I find it highly instructive that the real facts of the situation, historical and current, come not from the article itself, but from the comment of George N. Wells of Dover, NJ. In that, he notes -- via some detail -- the rather obvious that taxes on the super-rich and those making more than $250,000 a year has declined substantially during the last 50 years.
So the real issue is not why people might think it unfair to increase the taxes on those making more than $250,000 a year, but rather what happened in America over the last 50 years that made people think it would be OK to decrease them without causing social suffering.
8
@Kip Leitner Please google "effective US tax rate over time"
It is very stable, regardless of the marginal tax rates.
https://taxfoundation.org/top-1-percent-tax-rate/
3
@James -- Your chart only goes back to 1986. If you were to go back to 1970 (the full 50 years, which I specify), then you would see the trend I describe in reduction of overall tax burden (from all combined taxes, capital gains, exemptions, charitable deductions, etc.)
3
Why do these proposals always ignore that fact that the cost of living in places like New York are vastly greater than in, say, Indianapolis. My niece in an Indy suburb, a recent nursing grad, owns a house and supports 3 kids on less than 100K. Try that in any NYC suburb. Adjust the "rich" definition regionally and then go tax the rich.
19
To the extent high income people decide to leave the workforce to avoid a bit of taxation, I'm happy to report there are hordes of middle income people who would be thrilled with the opportunity to take their place.
5
@Sam I Am However, the reality is that many of the jobs will be filled by educated immigrants, not existing middle income workers. I am not anti-immigrant, but the skills and education needed for many of the high paying jobs cannot be met by the less educated/lower skilled portion of current workforce.
6
@James there are hordes of highly educated highly skilled Americans making very modest livings, often in public service or at nonprofits. They may be motivated by more than the Almighty Dollar, and that might actually be good for all.
It may start with people earning 250K but we know it will soon engulf the Middle Class because that's where the money is. The rich always have tax avoidance schemes (take Trump for example). Better not to have " Medicare for all which will be trillions and just concentrate on improving Obamacare which Americans like. Social Security does not require a vast tax increase. Americans are living longer and working later. If the age it begins is increased by a year or two after grandfathering in those 55 and older and more indexing of the tax on benefits to income the problem will be less draconian. The big Blue states cannot afford further outflow of the wealthy to Florida.
5
@alan brown the money is not in the middle class and has not been for several decades. it is with the very rich
1
@John Smith Of course the money is with the wealthy, by definition. A huge amount of tax collection comes from those under 1%. That is what I meant.
If you want to raise my taxes, you better explain what I am getting out of it. Not some opioid addict in the Rust Belt. Not a high-school dropout. Not a woman whose only accomplishment in life is a bunch of kids by different fathers. But me and my family. Benefits do not always amount to money. If my taxes are invested in science and technology, I benefit. If they are used to streamline the creaky healthcare system, I benefit. If higher education becomes more affordable to academically deserving students, I benefit. But if the only purpose of this tax hike is to reduce income inequality, which I don’t believe to be a worthwhile social goal, I will not support such a program.
60
@Mor I think you just answered your own question. If you are expecting someone to knock on your door and tell you this, then go ahead and vote for Trump. Sorry if this is too blunt.
1
@Mor dealing with the unequal system we currently have, all of us will benefit from a more stable society. I’ve never earned a six figure salary, but Mitt Romney made clear I’ve always paid more tax than he does. Go read some history - rebellions and revolutions occur when a repressed underclass just can’t take it anymore. With nothing left to lose, they riot in the streets. Just look at Venezuela.
1
Too conservative for me. There should be no cap. Not only that, tax cap gains with FICA Taxes as well.
Those who have benefitted disproportionately from the structure of society should pay disproportionately to maintain that system for the next generation.
5
Yes, please tax capital gains like income!
Didn't Trump and Obama each increase white collar families' tax rates with medicare penalty tax, SALT, etc.?
40%, 50%,60%, 65% all-in effective take out rates from ordinary income from educated, dual income couples living in costly coastal cities, who likely have student debt, high mortgages, exorbitant childcare costs, and death spiraling county public school options.
That certainly won't bother wealthy millionaire and who don't make "ordinary income" (which is for suckers).
This tax increase also won't effect the 40% of Americans who make too little to pay any federal income tax or are recipients of welfare.
Sounds easy to sneak in, let's nail 'em!
1
Democrats can kiss the 2020 election goodbye if Sanders or Warren get the nomination.
24
So say u r a physician who basically is living way beyond his or her means , obtaining huge loans to pay for it all, and starting out in practice closer to 40 than 25 . Then you finally get out and start making a six figure income. Not only are you making exorbitant payments for your medical education ( for example 500 k in debt) but now you are taxed for social security etc without a cut off. Now compare that to a police person starting right out after a couple years of college at a significantly lower wage. By age 50 he/she is into ripe retirement age with thirty years under the belt. That person retires and get yet another job...when all is said and done the physician pays the lion share for the privilege of being in the work force way into his 60 s.
The methodology of paying ones fair share needs some attention. Laying it all on the blue States high earners is perfect for the red States and perfect for those that don't pay.
6
@Mrf I actually have a spreadsheet called NPV of physician earnings vs police at age 20 (wife is a physician). Negative earnings for undergrad (debt for school) + negative earnings for medical school + $50k resident earnings for 4 years. Don't start earning attending salary until age 32.
Cop works low earning job until age 21, attends academy, starts earning $50K and rapidly is at $85 to $95k (using Chicago average cop earnings).
Physician isn't better off until about age 50. At which time, the cop can retire. Physician has to work for another 10 to 15 years to have the replacement income.
Tax more, the dynamics shift even more in favor of not taking delayed gratification career paths (higher salary, later in life vs moderate salary earlier on). Education debt makes it even more one-sided.
6
@James thank you James for fleshing out my contention. I still love being a physician and though I am of retirement age , I work part time. As long as I remain competent I want to continue working .....PART TIME, whether or not it makes much financial sense. There is so much more to work than just the money but that in no way excuses the way we decide who pays for all the needs of society. I always smell a rat whenever plans are out forward to tax the rich...because history tells me that the rich never pay ..only the more affluent pay. This is an uncomfortable truth.
3
As it stands now. an individual who makes $45,000/year contributes 6.2% of their income to social security.
An individual who makes 500,000/year contributes 1.65% of their income to social security.
In Irwin's world (the NYTimes bubble)....it would be unfair to tax workers at the same percentage.
When Steve Forbes is now the "Progressive" with his old flat tax proposals....we are doomed.
2
@John What about the car insurance premium as % of wages? What about grocery bills?
Social Security wasn't sold as a "tax" or welfare, it was sold as an "investment." Which means the more you put in, the more you get out at the end.
Legally speaking, it is a tax. And for investment, it has a negative expected return for moderate to high earners. But if you don't increase the payout for higher contributions, SS becomes a welfare program. If you do increase the payout, it becomes government rewarding the already successful. Best to leave it alone if you want it to remain for another 50 years.
4
Social security is not necessary. I’d rather have that money to invest in a 401k or IRA. Once it becomes a welfare program, people will revolt. This is a bad idea.
4
Its probably good that Democratic states will bear more of the taxes. They’re more likely to understand the benefit of that sacrifice and therefore less likely to incessantly complain about it.
6
@Aaron Are you willfully ignoring the fact that income inequality is also highest in blue states? As is homelessness. California has one of the highest proportion of citizens in poverty.
If higher taxes was the solution to these problems, wouldn't the issue already be solved?
https://www.sacbee.com/news/california/article234920662.html
5
As we are often reminded: taxes are the price of a civilized society. And since you can never have too civilized a society, taxes (by definition) can never climb too high. The more you pay personally, regardless of income, the more civilized you are. Watch your wallets, folks, if the Democrats get control of both Congress and the White House. The billionaires have time, means and incentive to hider their wealth away. As always, the real taxes are headed for middle/upper middle class, the folks who cannot hide.
8
@Richard - Unfortunately, it seems like taxes are steadily going up while civilization is steadily declining. This leads many people to start to have doubts about this maxim.
1
These people should be taxed, too. We need income redistribution to attain greater social equality. Before taxes, Ireland has one of the worst problems with inequality of income in the EU; afterwards one of the least. My taxes pay not for a bloated military intervening to make the rest of the world's problems worse but for meaningful social services (although we still need more affordable housing and daycare). My healthcare costs, even with insurance, are about a tenth of what they would be in the US. I pay high taxes on a six figure income, but I also live in a reasonably just society, something no American can say anymore. And this is why we have become more rather than less accepting of difference here.
1
As one of those high-earning professionals, I'm all for higher taxes on people like me. Of course, I live in Canada now where I already pay those higher taxes. And guess what? Even though my taxes would be lower in the US, you'd have to drag me back kicking and screaming. Quality of life is better here in Canada in my opinion. I'm glad to pay the extra money to help support a better society. It's a great deal, if you ask me.
5
If you think about the percentage of your income you would pay in the US through taxes, insurance premiums and savings for retirement- would it be less than what you’re paying in taxes in Canada?
People ignore how much if their income is going to pay for stuff that the government doesn’t provide here
1
@JM
You are right. When I first moved to Canada, my take home pay essentially stayed flat as the extra taxes were pretty much offset by the lower health insurance costs. My income has grown since then to where health insurance deductions would be less significant, so now my total cost is higher in Canada than it would be in the US. But I still would rather live in Canada than the US. Money isn't everything. And a healthy society has great value even if it means less disposable income.
Dint we just cut taxes by $1.4 trillion primarily for the uber wealthy and corporations. Surely we can help the people making $35k a year a little. If we rolled back the Trump giveaways - who much would that help fund social security?
Please define “high income” and “wealthy “. Mid-high 6 figure incomes are often what successful professionals or sole proprietors earn. 8 or 9 figures belong to CEO’S , Wall Street financiers and robber barons. For these folks to contribute the same, or even less in relative terms, is obscene.
3
This column is parroting hedge funder Leon Cooperman’s whiny, self-serving, oligarchical claims that he shouldn’t be penalized for making his fortune. Although, most of the multibillion fortunes were and are being made speculating in the stock market, using insider trading information and questionable algorithmic programs.
In fact, hedge fund Billionaires made billions exporting all US manufacturing and closing entire industries. This isn’t an issue of “creative destruction”, but plain infrastructure destruction. In the process workers were forced to take jobs in the service industry at much lower salaries, which impacted tax collection.
However, working people continued to contribute through taxation. By contrast, the new billlionaire class use loopholes and or park their money in offshore centers, thus avoiding paying any taxes. Likewise, corporations, under current vulture capitalism schemes, also pay nothing. According to this paper, FedEx, for one, pays exactly $0.00 in taxes.
1
I find it fascinating that the same people who scratch their heads in puzzlement at supporters of the president doing so against their own economic interest expecting high wage-earners to do so based on their loathing of the president.
If you want people in high-income suburbs to vote against their own economic interests, you’re going to need better reasons and a lot less scolding.
6
The irony would be that Mitch McConnell would lead the opposition to the legislation, which, if passed, would mostly go to states like Kentucky, where 50% or more of the population is on a federal nutrition or safety net program, and McConnell and his Party would still successfully base campaigns on hating liberals.
1
Trickle down economics does not work. The rich get richer. They don't need to shop at Kmart.
I am opposed to any tax increase that is imposed upon people primarily because they may have more than most of society.
Through luck, hard work and loving support, I have more than some in our society.
If I am ok with taxing those who have more than me, then it should be ok if those who have less than me want me to pay more taxes. Why should the concept stop, and where should it stop ?
As far as I am concerned, if it is acceptable to increase taxes on somebody other than me, then it is fair game to increase my taxes.
That's why, I don't support taxes on the other guy. To every person in America except me, I am the other guy.
5
Congress should eliminate the cap on social security taxes that are levied on active earnings (and NOT levy social security taxes on investment income) and place the excess funds (the excess money in the social security trust fund from increased revenue) into passive stock funds. This way - over time - nobody will have to pay in more than what they are taking out (on a nominal basis), however, long-term market-growth can make it such that lower earners can still take out more than what they originally put in. Treat the social security trust fund for what it is - a pension fund - and invest it appropriately.
Please raise my taxes. I can afford it, and we need strong Social Security and Medicare programs, and lower deficits.
10
Our family would fall into this category and we would accept the higher taxes in the service of a more equitable society. I grew up poor and went to college with scholarships from the government which enabled me to achieve success and wealth. We feel we owe a debt to society. We feel it is our obligation as citizens to participate. From my own experience, helping the disadvantaged is worth it in so many ways. Beyond some point, more money does not bring more happiness, but lack of money leads to stress and anxiety.
12
The article's primary thesis: "it would eliminate a feature of the Social Security system ... that the taxes Americans pay in are closely related to the benefits they eventually receive, assuming they live long enough."
No, it would not necessarily do that at all, and the reason i buried in that last clause, "assuming they live long enough." Statistical analysis has shown beyond a SHADOW of a doubt that, on average, higher-income people live longer. I've read more than once that the OPPOSITE of what the author claims here is often true, that even though higher inomce people are paying in more, they are still getting a higher proportion of benefits to their contributions, through a combination of being able to afford to delay benefits (getting that sweet 8%/yr guaranteed increase until 70) combined with often much longer life spans.
2
There must be a progressive tax, not a higher tax on those those middle class professionals. Given two professionals in a family, each with an income of $250,000, the tax is approximately 40%. This means that one person is working almost for free. That effort generally supports the greater wealth of someone "earning" much more and generated from investments which is taxed at the 20% level. This hit to the middle earners is a bad idea. The tax rate should be a continuous function based on total income, both work and investment which should be treated equally as income; workers should not be taxed more than the capitalists because the capitalist own stock. There is no inherent value in stock ownership that justifies a lower tax.
1
This is a change that is long, long overdue. It is absurd that higher income folks are effectively taxed at a much lower rate for Social Security than are lower income people.
1
Those higher-income people also earn less benefit from Social Security relative to their income than lower income earners. But let’s just make that part of the equation even less fair, right?
Exactly how much of other people’s wages do you think “the country” deserves?
5
Fine, but can we please index it to local cost of living? Someone earning $250,000 in Wisconsin is probably well into the top 1% and can afford to buy a large house and couple of cars. Someone earning the same amount in San Francisco or New York has zero chance of buying a home on that same salary, and we've already been blindsided by the elimination of the SALT deduction.
49
@Matthew M Or you can vote for local politicians who will allow for denser development and eliminate the NIMBY veto in housing development.
People who paid $1MM for a house don't want a 8-unit condo on their block, so they oppose the development (lets say that each unit would have gone for $250K, dropping the income necessary to live in the neighborhood). San Fran is a poster child for private individuals using public processes to block development, mainly because by doing so (limiting housing supply), it drives up the price of the existing homes and benefitting existing landowners.
4
Before anyone proposes to either roll back taxes or expand them, why is no one demanding that there’s an assessment of how we are currently spending money. Do the programs have KPIs that make sense? Are there opportunities for efficiency while increasing effectiveness?
17
Here's how progressives should fund our goals: cutting military spending including: closing 50% or more of foreign military bases; foreign aid (mostly disguised military aid to military contractors and arms manufacturers ); and cut funding for the big spy agencies(esp those spying on americans). Then reform the tax code and increase IRS audits on big corp (no more offshore tax havens); cut the subsidies to big business and the subsidies from the blue states to the red states. After changing our priorities, I'd be happy to pay more taxes if needed for social security and healthcare.
8
@James Osborne
It’s not necessary to increase tax audits of large businesses. More oversight of front line management at the IRS is needed so that when attorneys and CPAs representing large businesses call managers and ask them to take it easier on their clients, the managers don’t give in. I worked there. If people had any idea how some managers in two IRS divisions, the Large Business & International group and the Estate & Gift Tax group, reduce the tax burdens of large businesses and wealthy individuals to do favors for people, there would be significant public outrage.
5
The suburban voter that is currently running from the GOP and trump? They'll run right back in four years if these policies are made into law. How do I know? I'll run with them and I have NEVER voted Republican in my life. The problems of lower middle income retirement are many, but I will not have my hard earned retirement delayed so I can pay for someone else's.
42
Increasing taxes on the uber rich is one thing, increasing taxes on people with incomes firmly in the middle class in the more productive states is another. How about rolling back this regimes tax cuts for corporations and the uber rich.
8
@Tibby Elgato 250k is not middle class no matter where you live.
1
Social Security is currently funded by only low- and middle-income earners; that is fundamentally unfair. An individual making $132k contributes the same amount into SS as Jeff Bezos, and both would expect to receive the same amount each month after reaching 65. This is not a sustainable system of funding, and I support changes that allows this otherwise ingenious program to reach its full potential. It was meant to prevent older people from living in poverty and we need to get back to its roots and ensure that goal is met.
1
Unlike you Neil, many of us are not selfish shirks from our responsibilities to our country and our fellow human beings. I make well in excess of $250k and it is may more money than any family really needs and I do not at all like the trend line we have been on for my entire adult life towards ever increasing inequality. I am happy to pay my share of increased taxes.
9
I'm sorry, but to the vast majority of us who make far less money per year, the people who make $250K or more ARE the "mega-rich." No one needs that much money, particularly when public services, such as housing, education, and health care, have been stripped so bare thin by Democrats and Republicans alike. Let's tax the rich--all of them--and build a just society.
9
The Democrats are doing everything they can to make sure they lose this election. It is truly very frustrating. There is a reason Mayor Pete is leading in Iowa. Pay attention.
17
Neil Irwin is a secret conservative and wants to see Trump re-elected.
1
Just act like the republicans and tell everyone their taxes will go down and the economy will prosper. It worked for Trump. Read my lips no new taxes. And do not mention borrowing a trillion dollars to pay for the tax cuts! Please never, never, say you want to tax anyone. Just say you will grow the economy to pay for everything you over promise.
2
"many of them affluent professionals in Democratic strongholds"
I guess it's all about the courage of one's convictions.
1
@Si Seulement Voltaire like the Christians that vote for Trump?
Taxes is a four letter word that has been beaten to death by politicians. Of course we have to pay taxes if we want fire departments, streets, police, and ambulances. And we will all say we don't like to pay taxes. But we sure like to pay for our Porsche and Mercedes. So change the word and the programs. Let's give a two-for-one tax break for donations to a worthwhile cause, like education, healthcare for the poor, school lunches. Donate 100K and get a 200K tax break. What the money pour in.
@Tom The lamentations about schools and roads are rolled out whenever a tax increase is proposed. But it ignores the fact that the tax rates required to fully fund schools, roads, fire department, and even the military are very low.
Mandatory Spending (Social Security, Medicare, Medicaid, SNAP, etc) is $2.5 Trillion. Discretionary spending (including defense) is $1.3 Trillion.
Its almost as if the plan is to spend all of the money on transfer programs, allow the roads and schools to rot, and turn around and tell people that if they want good roads and schools they should pay more taxes.
Call it what it is, government mandated charity. Which is fine, although I usually receive a thank you when I give to charity.
2
The rich deserve what’s coming to them. Who cares if the us has higher taxes than Sweden. Let’s get their money and give it back to the people.
3
Sure! Let's tax the six-figure income earners EVEN MORE while we protect the plutocrats' fortunes with low investment income taxes, income tax brackets that top out way too low, huge estate exemptions, 1031 real estate tax dodges, 20% deduction for trade business 'owners. While GOP politicians lie about cutting taxes and restrict those cuts to the aristocracy, DEM politicians are prepared to tax the middle into oblivion.
18
FDR warned about making Social Security a welfare program when it began, he was clear that it was a defined pension payout program with higher earners receiving a greater monthly check for their contributions, he considered that critical to its support and success. Democratic plans would turn that on its head, erode support for the program long-term and introduce a massive new regressive tax on the upper middle class. Maybe this is one reason Elizabeth Warren has engendered such strong antipathy from a class of people who would normally be her natural allies?
28
Checks from the federal government do not bounce. There is no solvency issue with Social Security. Someone clicks a button and checks go out. There is no giant vault of money that is running dry. It's a ledger. Numbers on a computer screen. People refuse to accept this basic truth and we end up in needless fights over "who's going to pay for it".
4
Let's stick to the point, which is that an increase in the income upon which Social Security withholding is levied would "help sustain the finances of a program that could be forced to slash benefits in the decades ahead if nothing is done."
But The Upshot terms this a "large tax increase on high earners", as if that's bad, and not worth saving Social Security and hundreds of millions of Americans from having their benefits slashed?
Mr Irwin recently called taxes a "necessary evil." Perhaps he should be reminded of Oliver Wendell Holmes's aphorism: "Taxes are the price we pay for civilized society."
Increasing the income upon which Social Security taxes are levied are a small price to pay to maintain our meager social safety net, and keep our elderly out of poverty.
It's the civilized thing to do.
626
@Sean The last time the middle class was asked to pay an increase in Social Security taxes was in the 80s, around 35 years ago. You cannot fund every program by demanding higher earners pay for it, effectively raising their combined tax rates to over 61%, one of the highest rates in the world. Everyone could and should pay more for a program designed to benefit the populace at-large.
52
@Shane Income above $132,800 is not taxed for Social Security. What good reason is there for this? Social safety nets cannot, and should not, be funded only be people in the lower and middle classes.
96
@Sean As someone who'd be hit hard by this increase, i'd be ok with it (well, to be honest, half of it) if it is combined with an increase in the age for payments, for people without disabilities. Most people are able to work past 65 (let alone 62) much more easily than used to be the case. A combination of an increase in the tax (that is, factually, what it is), with a gradual increase in the age of retirement (say add 3 months every year until it hits 68) ought to make it secure.
12
Most of the quoted figures are increases in marginal rates, not in overall tax burden. In any event, Social Security taxes are presently regressive because of the "cap." Those above the cap pay a smaller percentage of income than those below.
1
@Ignotus For SS yes, but not for income taxes. And they get no higher benefit.
1
lets us see if professional have courage of there own convictions. Reducing their income to provide more equity.
4
I have no problem with these ideas, especially applying the tax to investment income. We need to start treating investment income more like earned income.
59
@general public
'I have no problem with these ideas'
That is because you will not be paying 63% of your income with no return I exchange.
This completely discourages anyone from reporting the income of a millionaire.
Suddenly a lot of cash will drain and the richest folk will all be making right under the Warren threshold.
26
@general public Your paycheck is the most senior form of debt in a company. If your company goes bankrupt tomorrow, your salaries will be paid before anyone else.
Investments have greater risk, so they require greater compensation. Taxing investments as income will make the IRR required for a project higher.
Said another way, if someone wants a 5% after tax return, raising taxes decreases the number of opportunities. An upper middle class family building a rental property and seeking a 5% after-tax return can pay the tax, but they will still get their return by raising rent.
7
@general public
I'm ok with taxes on benefits of investments only if equal deductions are possible on losses on investments.
Fair should be fair, no?
7
Will the Democrats support it? Let’s look at how much backlash there is here in NYC and the surrounding blue areas over school diversity. It always seems that the Democrats are always telling people what to do as long it doesn’t affect them. Once they have to pay more taxes -- and it won’t stop with this one raise -- it will continue to go up. We will see how concerned about the poor everyone is.
121
@EAH you say that social security is only for the poor? It is not. Everybody gets it on retirement, including the rich. And so everybody should pay into it in a manner commensurate with their incomes. And please, with the democrats don't want to pay taxes to help the poor, etc. Dem states have been paying a larger share of taxes for decades, and lots of that is shipped to red states to help THEIR poor, and THEIR elders and kids, who red states don't take care of because they don't tax. So let's talk about who really doesn't cough up for their fellow man. It is not blue states.
12
@Anda -- good point, Anda. But to address EAH's comment, the Dems in blue states did howl over Trump's tax changes, which they claimed benefitted only the rich. They also claimed it disproportionately targeted Democratic (high tax) states in eliminating the local property tax deduction higher than $10,000. That sounds like a tax on the upper middle class. What they ignored was that in doubling the standard deduction, Trumps tax actually did benefit the poor. So yes, affluent Democrats cared more about the fact that they had to pay higher taxes even though, as they well knew, truly low income people got a tax cut. So on that point, EAH is quite right.
3
@Anda
The marginal tax rate for NYC residents making over $400K will be the highest in the entire developed world - 63%. Problem is $400k with two kids in NYC does not leave anything to save after the cost of living in NY
4
The cap was always wrong and this is the perfect way to save Social Security.
4
What else is new?
And don't think the middle class won't get taxed either. I always figured our progressive candidates are out for my own hard-earned, slowly built nest egg.
23
@B. Agreed, if I have to start paying social security taxes on my 401K withdrawals as I take them out, I am going to be INFURIATED!
3
I only see proposals by Warren and Sanders mentioned in this article, although the author claims that DEMOCRATS are planning these massive tax increases. The headline is massively misleading.
Also, the virtual elimination of SALT deductions in the 2018 $1.8 trillion Christmas tax gift to Trump and his friends did not hurt only the rich. It also hurt millions of hardworking middle class homeowners and workers in high tax states. These deductions should be restored. And I don't want to hear any spurious objections from people living in low tax states who benefit from oversized returns to their state budgets in federal revenues not paid for by their residents.
Finally, I often wonder why passive income isn't subjected to payroll taxes if the recipients are not otherwise paying their fair share of FICA and Medicare taxes. For instances, why should hedge fund managers, who still get away with murder through their carried interest loophole, the one which Trump promised to close and didn't, pay none of these taxes? If I were a Democratic candidate I would go after earners like these.
7
Why are reductions in spending never considered?
15
It's a PROPOSAL! It's not real. This PROPOSAL would be significantly modified in Congress before it was finalized into any law.
This is one of the problems with the media these days. Every one is so desperate to fill space and attract advertising that they pen articles about meaningless proposals that have zero chance of ever getting passed.
On TV news, the talking heads and so-called pundits spend hours and hours daily exploring 'what'if's', 'maybes' and 'what might happen if' while neglecting real news occurring all around them.
The real downside of all this is that any political candidate speaking about real change that in the end, could be very beneficial to society at large, gets beaten up and drummed out of contention by these articles that do nothing other than stir up FUD (Fear, Uncertainly and Doubt).
Sad!
1
@Joseph
Can any policy be "beneficial to society at large" without some losing and some gaining?
The question actually is who gets to chose the winners and losers.
2
@Si Seulement Voltaire - I am unsure what point you wanted to make but you apparently are having difficulty understanding what "beneficial to society at large" means. "At large" implies the vast majority, which typically can be read as an overwhelming majority or approximately 90%.
M4A would be beneficial to the overwhelming majority.
Yes, there will always be winners and losers in any policy change but we live in a system of government where the majority rules. There may well be a few people who would be better under the current health care and insurance system. That's too bad for them. The majority wins.
Higher taxes will not be used to shore up the Social Security system. Higher taxes will be used to fund the welfare state as well as Medicare for All, free college and other hair brained schemes championed by the so-called progressives. If high earners in blue states think they took it on the chin when SALT deductions were limited to $10,000, wait until they see how much more they will pay in taxes if the Dems win the White House and Congress.
18
I used to think well of Warren, mostly because she has been a staunch foe of big banks and because she was responsible for the Consumer Financial Protection Board.
But her current proposals are just silly; a wealth tax, Medicare For All, free college tuition, etc., etc.
Unless you can cap college costs, the idea of free college is just nonsense - and you absolutely can't cap college costs in this country. Also, the idea that anyone should be able to go to college regardless of ability is silly.
This is populist pap.
Did I say that I used to think well of her? No longer.
41
@spindizzy
I think the US should look into public/private trade and technical schools in cooperation with businesses. (Offer apprenticeships supervised by public schools against some tax cuts - for instance)
There are too many going to college only to have no skills corresponding to market needs or that will allow them to pay back the cost of college.
7
That's terrible. Upper middle class professionals have undergone a considerable emotional labor undoing the erasure of marginalized voices in Ivy League sociology departments, they have stood on the barricades of pronoun conflict and they have paid a high affective cost giving witness to white supremacy at Halloween parties. The least they deserve is a tax break. Poor dears.
4
Excellent.
Let the ‘rich’ liberal states carry the brunt and let’s see what happens to their already impoverished large cities.
6
The correction needs correcting. Share of total earnings that "escapes Social Security tax" ROSE from 10% in 1983 to 17% in 2016.
I don't know why people earning over $250000 are not considered rich. Considering where the tax burden falls now, it has to fall on the rich as well as the mega-rich if we ever want to sort this mess out.
131
Because depend where you live. Here in San Francisco with 250k you cannot afford to buy an apartment
108
@David Weintraub Depending where you live, 250K is not rich at all.
36
@David Weintraub
Here in NY city, it is NOT rich at all. And we are already paying incredibly high taxes.
"The average rent for an apartment in Manhattan is $4,336, a 5% increase compared to the previous year."
Now you may say-- move somewhere else. But I am FROM here and my work is here.
54
Oh goody. More welfare that my family gets to pay. We pay for the poor, the middle class, corporations, and the wealthy. What an endorsement for hard work, advanced degrees, and delayed gratification.
361
@Carla Yes, I was one of the "winners" of the 21st century economy as well, meaning I went to 7 years of grad school and owe $400,000 in student loans in order to make a decent income. But sure, I should have to pay even more while the corporations pay less and get a hand out. Makes sense!
90
@Carla it is everyone’s welfare everyone pays for according to their capability.
18
@Carla And by implication the poor, the middle class, and the wealthy (i.e. everyone but apparently you) don't work hard? There is a button below your post labeled share. A better world is found there.
71
Reminds me of the old joke: the good news is, we are only raising taxes on the rich. The bad news is, you're rich!
259
@Mike Sometime you have to care about, and for, other people less fortunate than yourself. Sorry if this seems a hardship.
10
@Mike That's what is called a golden problem
7
@Mike
If you are earning a quarter million a year most people would consider you wealthy.
9
I appreciate this write up because whenever the candidates talk about lifting the cap on social security taxable income they never state whether the cap on benefits would also be increased. I think it's fair to note that this would be a big change in the way that social security has been conceptualized -- there have always been diminishing returns to higher incomes/taxes but to have no returns at all would be new and a departure. And while many of us NYT readers would benefit (myself included) from creating a gap between the current cap and $250,000 where the new tax kicks in it does seem a little cute and silly to me. If there is to be no increase in benefit than just pick a lower rate and apply it more broadly to everyone. Then the returns will be more stable and predictable. I also want to say to folks that love Warren and Bernie that Trump will win over a big chunk of white non-college educated voters no matter what you propose so you should take care in alienating ever larger shares of those who are inclined to vote for Democrats. Small margins in swing states matter. It would be good if the overall tax rate was not actually higher than Sweden's because no one thinks we're getting Sweden level services.
6
I've been over the cap for several years and I don't mind if it's eliminated. Certainly that's better than raising the base rate on everyone or cutting benefits to seniors with other income. But the money should be used to shore up the system, not expand benefits.
6
In the past I've wondered if with a flat rate and the income cap, SS taxes were fair. That was resolved after finding how progressive the benefits are. For example, someone with an average of $10K qualifying income receives a benefit at 75% or $7500 annually.
That doesn't sound regressive to me.
2
Good. Look, I'm happy for people who make 250k+, and they should be equally happy to help pay into the system that allows them to make such a fortune.
6
@Graham Hackett
The system didn't allow them to make such a fortune -- their innate talent, willingness to take risks, and the sweat of their own brow created their fortune.
2
I have always thought the cap on Social Security tax was absurd. I’m relatively rich and I would be very happy to pay a higher tax to keep Social Security solvent. And I don’t think I am unique.
9
Road to Democratic lss of 2020
6
Hardly news. The Democrats love taxes, the more the better, taxes for the rich, the poor and (especially) the middle class. If we get a Democratic President, House and Senate next year, your typical NYT reader is going to get absolutely crushed with new taxes. Bon appetit.
32
Marginal Tax rates. If you don't know what they are - and few people do - go look it up, and see why you probably won't be affected by the horrendous 60+% tax rate.
Unless you drank the cool-aid Republicans peddle that YOU, TOO could become a millionaire, pah, BILLIONAIRE!! (at some point later, way later, probably, likely never, though) and why YOU should support TODAY that billionaires - remember, that could be YOU one day!! - already do enough for society and don't need to be taxed.
3
@M.B. - Well, there are about 15 million millionaires in the US, so quite a few people seem to have taken up this offer.
So what?
3
Strange? Why is that so many Americans don't seem to object that much to TRILLIONS handed out in tax breaks and subsidies to wealthy Americans and corporations, along with billions to a bloated military/industrial complex fighting never ending conflicts around the world, yet, when it comes to re-directing just a portion of those same taxes towards policies and plans that would actually benefit everyone including an increased quality of life, so many object?
I am not sure whether or not you would really like to have "nice things' but you sure like haggling about it.
11
@Deus Corporations create jobs and employee people, the defense industry contributes the same way, this is a societal benefit.
1
It sure would be nice if every time someone refers to the possibility of Social Security benefits having to be cut or failing entirely they also mentioned that this is because Republicans raided the Social Security trust fund and the IOU's they left have gone entirely unpaid.
Kind of a salient detail.
30
@Steve I thought it was the case that any annual social security surpluses were required to be used to buy government bonds and that reduces the amount the government must tax or borrow annually until there is no annual social security surplus. Then the government must tax or borrow to repay the bonds that are turned in to help fund the social security system. When the accumulated annual surpluses are gone, benefits will be cut a bit unless rules are changed or social security taxes are raised. To the extent that Republican deficits have been larger than Democratic ones, the Republicans might have more responsibility but both parties used the same budget funding mechanism when they had the chance and both will redeem bonds as necessary until the accumulated surplus is gone.
1
@Steve - Doug is correct - with one caveat. They could also have used the surplus funds to buy stocks. If they had done that, the SS Administration would own most major US corporations, instead of a bunch of billionaires.
However, they would have had to have either raised taxes or borrowed more money to pay for the other spending.
I certainly did not want an increase in social security taxes while I was working.
Now that I'm retired and looking forward to receiving benefits that idea suddenly makes a lot more sense to me.
I guess this is an example of the wisdom one gains in maturity.
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@Allen Rebchook ; you didn't want an increase in taxes if it meant you had to pay it, however now that you are not subject to it, you are OK with others paying it. I guess that is you're evolved wisdom that came with age.
4
13% of social security is paid to people unrelated to retirement.
No comment on why most wealth is held in democratic cities.
1
@David : have you not considered survivor benefits to spouses and kids and disability benefits?
@David
Also the most poverty...
It's about time! There should never have been a cap on earnings subject to Social Security tax in first place. Quit being so greedy. It's NOT good.
12
@Dennis Taxation in a progressive system should begin from the top down not the bottom up. America has forgotten what progressive means.
Good. Democrats love high taxes. I'm fine with that.
5
63% tax, more than Sweden? This may not be an electoral winner but it surely will weed out the hypocrite virtue signalers. If you are so woke, pay up.
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@Kai
I don’t think the woke virtue signallers on the left are the upper income liberals. It’s as if the Democratic Party has different constituents. Do you think that evangelicals and neoconservatives the same people?
2
@Kai This is very misleading. The 63% tax is only on multimillionaires, and that's including federal, state, and local taxes AND social security, which isn't technically a tax. It's also NOT including Sweden's extremely high VAT tax.
I'm okay with multimillionaires having a few fewer millions so that our increasing numbers of elderly will not live in poverty. That seems like a much better society than one in which some people have millions and others have to scrape and save and work two jobs just to feed their families and keep a roof over their heads.
Every time I read an Upshot column by Neil Irwin I become more and more convinced that he MUST have been the President of the Young Republicans on his campus . . .
8
Democrats want to increase taxes on the rich.
For the most part, Democrats ARE the rich.
So I say, "Go for it."
As I tell my wealthy liberal friends, I don't want to pay less in taxes, I just want them to pay more.
And it's not because I don't like them, but because I DO like them and want them to have what they claim to want.
I also want them to assign a dollar value to their liberal beliefs.
I'm already seeing that their core beliefs aren't quite as important as they themselves previously thought.
48
Every single Congressperson from affluent NY/NJ/CA/IL districts would be wise to oppose policy that increases taxes for their constituents especially considering the recent loss of state income tax deductions.
Stick to going after the billionaires. Believe it or not they still only get one vote each.
12
It is immoral to tax anyone over 50%.
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@J Per many religions, a tithe of 10% is more than adequate. It only gets this large because limited government as defined in the constitution is being replaced with ever more government handouts to individuals without regard to need or a safety net.
3
@David
And look how well all those theocracies turned out ... oh, wait ...
@J
It seems you don't have much choice, there are a considerable number of American corporations, like the fossil fuel industry, that are receiving BILLIONS of taxpayer dollars every year in subsidies and several others like Amazon and FedEx that pay little if any, tax at all!
1
Irwin writes “The tax increases proposed by Ms. Warren or Mr. Sanders would apply to a slim minority of earners: 4.6 percent, according to Moody’s Analytics.”
A slim minority.
And the world has changed, with a huge inequality now in incomes over our relative lifetime.
Lift the cap, impose the tax.
9
I already pay high taxes due to my income and living in California. Now, this? Don't be surprised when Trump wins affluent democratic areas.
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@Nathan I too live in CA and trump's current tax is double taxing me. I pay property tax and State Income tax. Now only $10k of that may be deducted and the mortgage deduction has been removed. Why would I vote for trump who took away my tax breaks and gave the money to the 1%, the Fed-Exs, and the Red States in transfers of income. Last year Fed Ex paid less than $0 dollars thanks to trump. I want the Obama tax plan back, in fact I want Obama back or any Democrat.
5
@Nathan The party leaders believe that strong opposition to Trump means that people will vote for anyone in the Democrat column, even if it means upper middle class voters supporting socialists and communists who have said from the start that they intend to take money away from those voters. Shaming will be part of that.
@Nathan
So for the sake of saving some taxes on their "hard earned" billions, they will accept fascism and the destruction of democracy in America?
Yep, America, you are exceptional!
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I've never understood why there should be a cap that after earning and paying in for certain amount, you no longer owe any social security tax. Why? Doesn't seem correct particularly with people working and living longer.
7
@getGar as the article states, social security is suppsoed to be modeled as a pay/pay out system. They capped the amount of earnings that are impacted by the tax, but at the same time the social security benefits you get later are also capped.
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@getGar Because it was never designed to be a form of welfare, so taxation is correlated to likely benefits provided.
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Like it or not the only conclusions that all studies have shown that this is the way to continue SS. We have decrease in younger workers, aging population, jobs replaced by Robots and we will see more loss of SS funds. It is necessary to do this regardless of political ideas.
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@Richard Head I don't think that's true...why not just raise everyone's contribution by a total of 1% (.5%-employer and .5%-employee). Why narrow it to ~4% of the population...everyone benefits, so everyone contributes.
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The link to payments made for FICA and income received in the future has been largely a myth (depending on whose analysis you read) for decades. A typical payer won't get "their money back", but they will get a guaranteed income that is inflation protected and shielded from avaricious money grabbing banks lying about why the plurality of people declare bankruptcy (ans: medical bills).
Presently about 15% of social security recipients are disabled, many of whom paid little into the system; there are also dependents of workers said dependents having made no payments of their own.
This just points out that FICA is already a wealth transfer mechanism. It also points out that pillagers such as Paul Ryan wanting to "cut" social security are disingenuous, nay hypocrites, as the workers at the foundation who are supporting the system already are paying more typically than they will get back in their lifespans.
9
Unfortunately, Warren and Sanders will be electoral suicide for Democrats because the GOP will savage their "socialist" agenda with fearmongering and half-truths. Taxes will go up eventually regardless of who is in office or a major privatization of everything from fire/police departments to toll streets and parks in order to pay for the trillions the current administration is racking up now. Either way, brace yourselves.
7
@Andrew Police and fire are local issues, not federal.
1
If these taxes go through, our households $500K income will rapidly become $300K. There will just be no incentive for me to go to work, we will live as a family on my wife's income.
As it is, much of my after-tax earnings goes to pay for the nanny. Who knows what her job prospects will be when similar families do the same math, but at least she will get $2,400 more a year in Social Security. Losing $50K in earnings, but getting $2K in SS seems about even, right?
As is, taxes are our largest expense. 3x as much as our mortgage, and 2x as much as our savings.
Many High Income, Not Rich Yet (HENRY) families will vote for Trump out of economic necessity.
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@James so you're willing to give up around $100k in net additional income in order to save $12-14k? I'm not convinced that the majority of progressive-leaning voters will share this self-sabotaging cynicism.
I would have no problem paying additional social security tax because (1) as a high earner, I already have economic security; (2) it would increase my chances of collecting top dollar social security benefits myself in a couple of decades; (3) the overall economy will be stronger if lower income individuals receiving social security benefits have more money to pump into it; and (4) I can't accept that becoming slightly less of a 1%-er means that I need to "vote for Trump out of economic necessity" despite the obvious negative social and economic impact of his presidency.
The reality is that by making this comment, you're exposing yourself as someone who almost certainly voted for Trump the first time around and already plans to do it again.
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@Ian My income would be entirely at the marginal rate. $200K * 60% = 120K in tax.
Leaves me with $80K after tax. If I keep working, pay nanny $50K, left with $30K.
Better to stay home to raise the kids myself. Being away from the family if it buys us another $80K in annual spending makes sense. It doesn't make sense at $30K.
I live in Illinois so my vote doesn't even count. Voted for McCain and Romney, but stayed home in 2016. But thanks for dismissing the input from someone based on political tribalism.
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@James Lets see at 300 K you would pay 36,000 rather then 18,000. Thats a increase but it will not put you out as much as you say. If you will allow Trump to be President for 18,000 shame on you.
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My job always wants me to work extra hours; already the tax rates on my last dollar are high enough that I decline regularly, much to their annoyance.
Why aren't we taxing Amazon and Fedex instead? Why is this always on the back of the upper middle class? I already pay more taxes than Bezos....
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@jz Bezos pays more if you are just upper middle class. He pays taxes on income and all stocks sold to fund his wealthy life.
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@jz, my thoughts exactly!
@jz Fed Ex paid less than $0 last year. I think all should pay their fair share.
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I'm confused - for the plans such as the bill that "would apply the current tax of 12.4 percent to all earnings above $400,000", does this mean that people who make up to 132,900 pay the 12.4% (the current system), people who make 132,901 to 400,000 would pay 16,480 (12.4% of 132,900, as with the current system) but no extra on the earnings above 132,901, and then people who make 400,001 or more would pay the same 16,480 and also would start paying an extra 12.4% on the earnings above 400,000?
That would create a weird tax advantage specifically for the upper middle class (in-between 132,900 and 400,000). Do these plans actually support this, or does the article describe the plans incorrectly?
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@RH this is my read as well and I think it's accurate - income above $132,900 and below the $250k or $400k threshold would not be subject to social security tax. That would indeed create a tax advantage for people who have reached upper middle class income but have not reached the highest percentiles of income (it looks like the 95th percentile for 2019 is right around $248,000).
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@Ian Add this complexity because we pretend to have equal protection under the law. Why bother with liberty and equal protection when so much of the USA refutes these notions and is moving ever further away.
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This is a very informative and eye opening article. The "let's give money to everybody" mentality of Bernie has infected the Democratic Party. The don't speak to working parents though - why doesn't he talk about funding full time child care for example (instead of free college and free health care). Why not subsidize folks who actually work?!
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@Brenda he does speak and has spoken on full time child care and how it intertwines with other aspects of his plan, go google it. He's also proposed a variety of other related improvements to smooth the variance in experience between school and home that favors the wealthiest families when educating children.
I like the idea of Democrats paying more taxes.
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Warren insists that taxes on the middle class would not rise on her watch.
However, Bernie, who wrote " the damn bill", says otherwise.
Of course, now that she has walked back her Medicare for All to allow for private insurance ( which she previously condemned as the work of the devil), she is only left with an explanation of how to fund the multi-trillion dollar hole for her other pie in the sky plans ( I have a plan for everything.).
Yes, under Warren everyone would pay more taxes.
She is worth $12 million dollars.
As someone who has grown rich by paying as few taxes as possible ( rich people hire the best accountants) she knows.
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@Simon Sez Elizabeth Warren will promise anything in an effort to get herself nominated, then backslide on all of them to try to win the election. She is a fraud.
2
A nonstarter...
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I like how we continue shining an unflattering eye on Democrats' normal, wise tax policies while not mentioning that Trump targeted Democrats with a tax hike, an abuse of power, and borrowed money to help people who need no help. The deficit is at record amounts, but sure, let's write an article about how 'democrats' want to raise taxes on your readers.
Let's sit back and look at the deficit that was created to help rich people, to hurt Republicans' political enemies and to ruin our budget before the inevitable recession! Let's look at how the golden age of America, last century, was based on big taxes and big government. Let's, you know, not help fascists destroy our democracy with insincere tax policies and lies!
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Its squabbling over pennies. Eventually they will come for you though. The Middle class bears the burden. And politicians think that they are they easiest to fool.
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Good. We all pay social security taxes. Why do you get to pay zero over $250,000? Please. Tell me.
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@Corbin If you spent 15" googling the history of social security, its design and intent, you could answer your own question. Hint: it wasn't conceived of as a welfare or re-distribution program.
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@Corbin It's not tax to pay for someone else's retirement. It never has been.
Sadly, so many people don't work and don't contribute, or work cash black market jobs, that SS will go bankrupt. It started in a day when there were vastly more workers paying in to the system than were getting paid out/retired. But now it is a worse and worse ratio.
Turning it into a tax on producers to pay off non-producers in retirement will be quite a different goal of SS. which was never to be retirenment funds, just supplemental.
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@Corbin
Read the article. SS benefits would not increase for tax payers that continue to pay FICA on their income over the present limit, or over $250,000.
A principle that made the SS legislation passable and sustainable.
Increasing a tax on millions of people without providing any additional benefit is a recipe for political disaster.
7
I carefully did the math on my home: mortgage, local taxes, deductions, buffer, etc. Two years later, the math on my long-term investment got thrown out the window with a the SALT tax increase that felt carefully targeted toward 'political enemies'. It felt unfair to change the rules so suddenly & dramatically, and leave me holding the bag.
This proposed increase has much the same feeling - figuring out who you can squeeze while limiting the political damage. Which do I dislike more - higher taxes or another 4 years of Trump?
I wish we could have a clear & holistic approach to taxes and what they're paying for. I don't mind having a higher marginal rate, but when it's broken across all different 'vectors' of taxation, and requires financial modeling to figure it all out, it feels like a con.
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@MK - In any case, having one national tax system is certain to hit affluent professionals in the coastal states hardest. Their nominal income is high, but their housing costs are off the charts. You can probably live better in South Dakota or Missouri on $120K than you can in New York or California on $300K, but the people in the blue states will pay very high taxes.
6
@MK It feels like a con for a reason---it is a con. All flavors of taxes with different carve outs to make the medicine go down---at least initially--- a bit more easily.
3
Get rid of the cap on Social Security tax altogether. The system would be viable in perpetuity. It's pathetic that for two decades both dems and republicans have been arguing about how to make SS solvent, but absolutely refused to extend the tax we all pay to incomes above $250k. The savings individuals would have in taking care of their elderly parents would benefit the economy immensely.
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@Brady agreed. If the cap were removed, the current tax rate could almost certainly be reduced and the entire system would still be more solvent.
2
Something must be done with regard to higher taxes on the richest people to redistribute income to the bottom 80 percent to return income distribution more like the 1950s and 60s. These social security taxe rises with higher benefits to lower income retirees is a start. In 2018, the top 20% income earners have about 55% of national income; the bottom 20% got 5% of national income. This is intolerable in a democracy and unstable in economic terms as well. https://www.statista.com/statistics/203247/shares-of-household-income-of-quintiles-in-the-us/
9
This:
'the new Democratic approach to Social Security amounts to a test of what affluent liberals are willing to sacrifice to accomplish progressive goals'.
So let's see it Liberals.
Are you ready to pay 63% of your income in taxes to pay for social services, which you will net benefit from?
You will not benefit because of this:
'The top earners facing new Social Security taxes would not see their future benefits rise commensurately; rather it would amount to a transfer from high earners to low- and middle-income Social Security recipients.'
You're donating your income to pay for others, you will not see any exchange for the money taken from you.
Are you willing and ready to do this?
And this is hilarious:
'12 states with the highest share of earners who would owe higher taxes all voted for Hillary Clinton in the 2016 election'
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63 percent tax rates — higher than even Sweden (without the free healthcare and other benefits they have) — what could go wrong? If the plan is to destroy the economies and housing markets of blue states this plan is perfect. It is a pipe dream to imagine that this proposal would not lead to not only a drain of top earners away from NY and NJ but would drive new earners from setting up here. A young doctor starting a career at age 32 after 14 years of hard study and several hundred thousands in student loans is suddenly “a big winner” deserving a 63 percent rate on the 375k she takes home? So easy to promise to “soak the rich” and then turn around and crush the upper middle class in reality. Just wait until the retirees who were counting on selling their house up north to go to warmer climes find their retirement canceled because their house in Montclair lost 40 percent of its value.
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@michaelf Don't worry, your scenario won't play out. Your young doctor will be eased down to about $150k commensurate with pay in other universal health care countries.
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@rebadaily
And how much in student loans do doctors in other countries come out of medical school with?
3
@michaelf So, why should the earner below $132,800 pay the 63% rate, as I have done so many times?
Yes to the phased in increase for employees, yes on raising the cap but no to increasing the benefit amounts. Most commissions of the past 30 years have repeatedly pointed out that this would make social security solvent and paying out at least 98% of benefit in perpetuity.
3
This is a quantitative issue. The question is how much do these high earners pay in taxes. Certainly we should expect a little more from people with such lofty incomes but onerous taxation as proposed for the ultra wealthy is not the answer. The ultra wealthy don't really do much that contributes to the common good.
These high earners comprise many of our best. They, far more than the ultra wealthy, are the real contributors to innovation by virtue of their daily pursuit of the excellence for which they are so well paid. It would be a mistake to tax them to the extent that it negates the incentives that feed their ambitions.
10
@J.I.M. Do you realize that successful people in their 40s and 50s become ultrawealthy in their 60's and 70's? Elizabeth Warren accumulated $12 million over her career representing corporations and paid moderately high taxes while doing so.
For the generation coming behind her, she is raising the taxes enormously.
7
If you live on the coasts, Doctors lawyers and bankers ARE the middle class.
14
@J.I.M. - They may be highly skilled and talented, but they also game the system and exploit their monopoly position. Doctors, lawyers, and bankers use their official position in the system to sock it to the middle class.
7
"In some ways, the new Democratic proposals are intended to reverse that trend, by disproportionately taxing more of their own voters’ paychecks."
Make that their former voters. Only by leaning on affluent professionals utter loathing for Trump can the Dems pull this off. Even then, senators like Schumer are not going to vote for it, and the whole thing will be water down to a virtual-signalling gesture. If there's one universal truth about human nature, people want to hold on to what they already have.
Ironically, removing the Social Security cap would raise only a small amount of additional revenue - about 3-4% more than is currently coming in.
5
Yes, eliminate the cap. Social Security should also be supported by taxes on all unearned/investment income, not just payroll earnings. Social Security will never be generous, but it has to be adequate.
32
@Steve W - But many retirees rely on investment income, as well as IRA withdrawals, a lot of which are also investment income. Come to think of it, SS benefits are also a form of investment income - should they be subject to SS tax?
7
@Steve W And all other unearned income such as rent control, Obamacare subsidies, Medicaid etc. Why not tax all unearned income to expand the base.
@Steve W
Eliminating the cap would provide a windfall for the Federal government right now. However, it wouldn't need this extra income for 10 - 20 years so the windfall would be used for current needs and in 20 years there'd be a box of IOUs to be paid for.
Continuing the current Social Security tax rate of 6.2% for the employer and 6.2% for the employee all the way up the income seems excessive and would represent a massive tax increase on the wealthy.
I'd like to see a 2.1% on the employer and 2.1% on the employee on income above the current $132,900 threshold. This extra money would likely keep Social Security able to meet its promises well into 2050's.
7
I’m retired now, but I’d have happily done without George W. Bush’s budget-busting tax cuts back when I was in my high income earner years. I didn’t want those tax cuts, I thought they were fiscally irresponsible, they didn’t prevent the Great Recession and by some estimates, they’ve depleted federal government coffers by $6 trillion and still counting. Yet it’s considered political suicide for any elected leader to propose a broad-based general tax hike to better align federal revenues with the public services we demand. Social Security is a quarter of our budget; Medicare and Medicaid account for another quarter.
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@Byrwec Ellison If you didn't want the tax cuts you shouldn't have taken them. There is nothing stopping you from paying what you consider to be your fair share.
11
@Greg M. I guess it's better to always look backwards. It's a GOP habit.
2
@Byrwec Ellison-Adding to your points, often overlooked is that the upper income earners, wealthy, super-wealthy, and corporations have been significantly "tax advantaged" over since the Reagan presidency Take Social Security--my white upper class father-in-law, a retired CEO, will live longer than lower income Americans and will withdraw more Social Security as a result.
3
One thing to consider: now that the SALT deduction has been shrunk, if we go back to 90% top federal tax rates, then consider the people of California who pay as much as 13% in state income tax. Some taxpayers could wind up facing a marginal tax rate of 103%!
6
@Will Only one party was for the SALT deduction removal, and it was the party who wanted to punish coastal urban states.
10
If we're eliminating the Tax Max, we should credit earnings above the current max. It would still be a huge windfall for Social Security and it would make rich people more supportive of the program.
9
Warren's plan would eventually hit most of us much like Teddy Roosevelt's idea that the income tax would only apply to the "rich" when it was enacted and we know how that turned out.
If she taxes the billionaires like she plans then in 15 years the billionaires' money would be cut in half and then she is going to have to keep dipping lower and lower and lower to fund the healthcare system.
When Teddy instituted his "income tax only for the rich" in 15 years it had dipped down to the top 20% of the population. Just saying, that history has a way of repeating itself. If most Americans think that only the "rich" are going to pay our everyone in the country's healthcare I have a bridge in Brooklyn for sale.
118
@Sarah99 Well, in Teddy Roosevelt's time, we did not have the largest army the world had ever seen, we had no welfare state, our roads weren't paved, and children attended one room schools. If you think you could pay for all that with an income tax only on the rich, I have a bridge in Brooklyn to sell you.
19
@Sarah99
Yes, that terrible income tax that created the best economy in the history of the world! God forbid we should return to the 20th century when the rich had to work for a living and pay their fair share for roads and schools! Save us from Teddy Roosevelt and give us more corruption and monopolies and less money for normal people! Please!
73
@Sarah99 If Warren “taxes the billionaires like she plans”, then the interest they’ll get on just an index fund (historically 8-10%) will still outpace her 6% wealth tax. They will remain billionaires.
In a country where we are all paying a tax TO the wealthy in the form of inflated insurance premiums and medical bills, what’s your plan?
16
Wow, someone is asleep at the switch. Assuming the referenced CBO report is correct, the share of earnings subject to SS tax in 2016 was 83%, not 17%, a patently ludicrous number. That said, 83% is meaningfully smaller than 90%, though it's not hard to imagine this happening over the course of 23 years.
12
our government hasn’t passed an actual budget in over a decade.
instead of finding ways to fuel it with more money,
can we work on a plan that makes it functional?
the system is utterly broken.
congress does not and will not do it’s job.
it does not reflect the will of the people.
20+ years of continuing resolutions does not lead to spending efficiencies, just entrenched corruption.
i don’t know what anyone has seen that makes you think more money sent there will make things any better here....
35
The article conflates the expanded SS tax with the increased tax due to the cap on SALT deductions. The former would be paid by high earners, who can presumably afford it, while the latter is double taxation on assets that provide no income, and thus no means to pay it. In particular, old people who have lived almost all their lives in homes that have increased in value and real estate taxes are often forced to sell, at exactly the time in life they need stability, familiarity and comfort. The 2 types of additional taxes are diametrically different.
79
It may be of interest to some readers that the social security system in Switzerland has a cap on benefits but no cap on compulsory contributions. A chief executive earning the equivalent of 10 million dollars or more annually is subject to the same payroll deduction as an ordinary worker (5.125%, matched by the employer) but is entitled to no more than the standard retirement benefit. This imposed solidarity does not prevent people earning high incomes from leading comfortable lives.
Similarly, Switzerland's wealth tax does not prevent wealthy individuals from choosing the country as their place of residence.
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@Beau Virage
Yes, this. We are the richest nation in the world and we have MORE THAN ENOUGH money to heal the sick and feed the hungry, as Jesus told us to. But hypocrites in the American church only want to help themselves and their own families. Christian charity is dead in America, replaced with fascism at the border and in our communities. Always punishment, never forgiveness, always help the rich, never the needy.
It looks to me that Europe is more Christian than the US, based on what Jesus actually said and did. You'll never hear that on Fox News.
30
@James You may be shocked to learn that Switzerland is in fact not a homogenous place. There are significant divides between the French-speakers and the German-speakers, akin to the divisions in Canada (French & English speakers) and Belgium (French & Flemish speakers). Google 'Röstigraben.'
25
@Beau Virage
Switzerland has no capital gains tax with a modest wealth tax. The Warren tax plan increases capital gains tax rate and taxes accrued gains annually. The wealthy will be far better off in Switzerland than in Warren's vision for the USA.
16
The real tax problem isn't FICA, which is a slightly regressive flat-tax, the problem is income taxes. We used to have 15 brackets (three per quintile) that progressively increased your taxes as your income grew with every dollar in that bracket taxed exactly the same for everyone, the only difference being that if you made more, you added taxes for each subsequent bracket. It felt complicated and had pages and pages of tables in the annual 1040 mailing.
JFK got rid of the super-tax (over 90% for top marginal dollars) that had paid off WWII costs and some of the topmost brackets, Reagan got rid of all the upper brackets in pursuit of the RNC's dream of a highly regressive Flat-Tax that taxes all income at the same rate which they claim is more fair because everyone pays the same.
Today those annually making $250K are in the same bracket as those making $250M or more. Of course the top earners all have ways of sheltering income from taxes which throws the burden on the middle income brackets to shoulder the cost of running the nation and if Congress raises the tax rates on the top earners, it slams the middle along with the wealthy.
Can we return to a progressive multi-bracket system that is indexed for inflation as well as eliminating a lot of tax shelters that favor the few? Yes, but unfortunately, the wealthy have legislators in their pocket and currently the Executive in their club.
423
@George N. Wells Hardly anyone paid 90% of their income in taxes. There were a lot more deductions available back then. In 1969 in fact, it was revealed that 155 high income individuals were able to reduce their income tax liability to zero. Real estate losses for example were deductible (which is why Donald Trump was so upset about the 1986 reform which eliminated that), credit card interest was deductible, and most importantly, corporate income was taxed at a lower rate, so wealthy taxpayers would report their income as corporate income.
24
@George N. Wells
Yet another fond recall of the 90% top income tax bracket.
Yes, in the 1950s the highest tax rates reached 90% or more, about double the highest rates today. But the lowest rates were also double, 20% compared to 10%, and applied at lower income thresholds (adjusted for inflation). In those golden years, everyone paid higher rates, and the income tax burden was more broadly distributed--i.e. more regressive.
We have a profoundly progressive federal tax burden today, especially after rebates and transfers. Pop quiz: what share of all federal taxes, including payroll taxes, do the households in the top 20% pay?
18
@Bob Krantz, et al.,
Interesting how misinformation continues. The idea that if your total income put you in the top bracket then all of your income was taxed at the top rate was, and still is, untrue. To be sure, a lot of Americans believe it. Hence the wonderment that those with total income in the 35% bracket don't pay the full 35% on their entire income. Nope, each step along the way is taxed at a different rate, a base income at zero for everyone then each bracket kicks in until either your income or that bracket tops out.
I am amazed at how many people believe that a "Flat-Tax", where everyone pays the same rate, is considered the most progressive. It is regressive.
Of course, those who get the majority of the income in the nation feel ill-used if everyone isn't paying the same rate on 100% of their income while at the same time sheltering a huge portion of their income from any taxation.
Another problem is that of access, which today is the same as representation, to the legislators. Just like it was in the 1700's, the wealthy call the shots and blame the non-wealthy for all their problems.
64