2016 Postmortem
Related: About this forumSome are saying that Hillary Clinton is in favor of SS 'means testing.'
Here's the truth: There is already "means testing" in Social Security. I'm a recipient of a monthly payment from SS. It is the same amount every month. I'm also still working at age 70. I worry about the current "means testing" every year. Here's how it works:
Depending on how much I earn and what my household income is, my Social Security benefit is either subject to Federal Income Tax or it is not. If I earn more than a certain amount each year, or if my household income goes over a certain amount, a portion of my benefit is subject to the income tax. The more I earn, the more of my SS payment is taxed.
In addition, any income I earn during the year is subject to withholding of the Self Employment Tax. I'm still paying into Social Security on every penny of profit I earn as a self-employed writer.
The more I earn, the less I receive from Social Security. That is means testing, pure and simple. Do I object to it? Not really. I understand it. I keep my earnings and household income under that threshold. I can do that by simply not accepting more work, if necessary.
Do Clinton or Sanders propose to change that means-tested tax on my SS benefit? Not as far as I know. Means testing is already in place. It is a well-established thing. Everyone on Social Security is subject to having their benefits taxed if they earn more than is allowed.
Lots of stuff is misunderstood or unknown by people who are not receiving SS benefits. Those of us who are already know that means testing is in place.
FreakinDJ
(17,644 posts)Not Social Security Benefits Means Testing
2 Entirely Different entities
MineralMan
(146,317 posts)It is Social Security Means Testing, pure and simple. If my earnings are over the threshold, my Social Security benefit is reduced.
leftofcool
(19,460 posts)Warren Stupidity
(48,181 posts)Notice also that the threshold is not inflation adjusted so the screwage keeps moving downstream. This is exactly why we need unequivocal statements from our candidates that they are not going to cut reduce means test remove or otherwise fuck over SS and Medicare.
PoliticAverse
(26,366 posts)A3. The taxation of Social Security began in 1984 following passage of a set of Amendments in 1983, which were signed into law by President Reagan in April 1983. These amendments passed the Congress in 1983 on an overwhelmingly bi-partisan vote.
The basic rule put in place was that up to 50% of Social Security benefits could be added to taxable income, if the taxpayer's total income exceeded certain thresholds.
The taxation of benefits was a proposal which came from the Greenspan Commission appointed by President Reagan and chaired by Alan Greenspan (who went on to later become the Chairman of the Federal Reserve).
(From: https://www.ssa.gov/history/InternetMyths2.html )
MineralMan
(146,317 posts)Not.
tularetom
(23,664 posts)Our premiums are twice the normal rate because our adjusted gross income tripped a certain threshold. Still fairly reasonable at $250 a month each +/-.
Edited to add: Because I worked many years as an employee of a public agecy which opted out of SS in the 1970's, my SS monthly benefit is fairly meager. Rather than means test the benefits, they should raise the cap on earnings subject to the FICA withholding.
Warren Stupidity
(48,181 posts)The lower threshold for a single individual is 25,000 and if it were inflation adjusted it would be 57,000. That is how bad the screwage is. (For couples the lower threshold is 34,000 - 77,000 if it had been cola'd.)
FYI - the "lower threshold" is the income level at which your SS become taxable and your "income" includes half of your SS benefits plus any other taxable income you have.
The whole ugly mess bestowed on us by Tip et al is laid out here: https://www.bogleheads.org/wiki/Taxation_of_Social_Security_benefits
BlueMTexpat
(15,369 posts)That is exactly what the system is now.
Too many people really do not understand what they are talking about, but that doesn't stop them from asserting anything they damn well please so long as they believe that it will discredit Hillary in some way.
MineralMan
(146,317 posts)all around, it seems.
Warren Stupidity
(48,181 posts)get Tip O'Neil and Gingrich all over again, figuring out new and clever ways to screw us while proclaiming that they have "saved" social security. Like just last year where Obama signed off on abolishing file and suspend, screwing millions of middle class middle aged couples out of benefits that would otherwise have been theirs, calling it a "loophole".
The real loophole is the cap that exempts the rich from paying SS tax after they pass the "really well off threshold". There is exactly one candidate proposing fixing that loophole - there is another one who can't quite get there and can't quite commit to no cuts ever.
Sunlei
(22,651 posts)paycheck and interest earned from your savings account are all considered income.
MineralMan
(146,317 posts)SS is a "benefit." It's not earned income. It is something guaranteed by our society to people who have worked and the amount is based on past income.
It's not actually income. It's something else, by definition. It's only taxed as income if you earn additional income over a certain amount. Then, they take some of your Social Security back. Funny how that works.
Sunlei
(22,651 posts)not taxed on your income at that time. It is funny how that works, I hate taxes.
MoonRiver
(36,926 posts)Warren Stupidity
(48,181 posts)There is no deduction on form 1040 for "fica taxes paid". You go ahead and try deducting your fica taxes. Let me know how that works out for you.
Warren Stupidity
(48,181 posts)However rich people have lots of investment options that can pay them monthly that ain't taxable and SS benefits were completely untaxed until 1984. Taxing SS benefits is just crap. It is punishing people for having to work because their benefits are too low.
Romulox
(25,960 posts)Nanjeanne
(4,960 posts)Medicare and Social Security are not handouts to the needy. They are not even intended to be a safety net. In their design, they promote the fundamental notion that dignity and good health in old age are not special privileges that can be bestowed or taken away. They are fundamental rights that every working American who has contributed productively to the economy can expect to enjoy. As James K. Galbraith said Its insurance, not charity.
If means-testing on the wealthy is allowed, conservatives will keep pushing until that same means-testing is applied to the middle class, who increasingly must rely on Social Security and Medicare in times of economic uncertainty and job insecurity.
That is why Clinton is so dangerous to SS.
MH1
(17,600 posts)as any meaningful program.
Gutting it will no longer be "third rail" if it is seen as "welfare" only for people who "didn't/don't work hard enough".