Associate Editor Gil Smart writes in his weekly column:
“According to the Bureau of Economic Analysis, entitlements totaled $2.2 trillion in 2010; of that, 55 percent — more than $1.2 trillion — was spent on Social Security and Medicare. And the tab is rising.‘The most astonishing growth of entitlements has been for health care guarantees based on claims of age (Medicare) or income (Medicaid).’…
“So Americans’ entitlement problem is less a problem of laziness than it is of old age. As Nicholas Eberstadt wrote in The Wall Street Journal last month,
“So curbing the ‘culture of entitlement’ necessarily entails reducing dependency on Social Security and Medicare, two of the most popular programs ever devised. Seniors will be required to sacrifice; but in perhaps the most cynical campaign ploy I have ever seen, Mitt Romney and Paul Ryan are promising current seniors that they won’t have to sacrifice a thing. Their entitlements are just fine; the problem lies with those other people.
WATCHDOG: Many erroneously perceive Social Security and Medicare as a savings account… money we have set aside throughout our workdays to be used in our retirement years.
Segregating such savings has not been the concept from the outset. The Social Security program was enacted in 1935 and payments to over 53,000 individuals who had only contributed for only a year or two commenced in 1937. By the next year, 1938, over 213,000 received payments. It was not a program funded by contributions but rather a pay as you go program funded largely through annual contributions.
(Yes, young people were subsidizing the elderly, at least it meant they did not have to bear the cost of their support and the elderly maintained a sense of dignity and control over their lives.)
Social Security was a form of insurance, not of savings.
We need to return to that concept by basing payments of both Social Security and Medicare to seniors according to individual needs. For example, someone earning more than $100,000 a year might only receive half the normal Social Security check. A person earning more than $250,000 might receive nothing.
In addition, the wealthy might be required to co-pay more towards Medicare.
Most of us pay for life insurance. Who complains when they outlive the policy termination dates? It’s insurance, not an entitlement.
Smack of Socialism? Of course it does. We live in a mixed economy. Especially at a time when a relatively few are prospering as never before while the middle and lower classes are struggling, it is essential for social harmony and even the perpetuation of the capitalistic system that the playing field be made more even as far as enjoyment of life’s bare essentials are concerned.
If the top 2% of earners in the country don’t receive full Social Security checks and have truncated Medicare benefits, they should consider it the price one pays for living in a repubic with a mixed capitalistic / socialistic system that makes it possible for them to prosper while also meeting the basic needs of those less fortunate.
At the tender age of the mid forties, Gil probably doesn’t know that the middle class does not receive full social security benefits. From the Social Security Administration website.
Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits.
“No one pays federal income tax on more than 85 percent of his or her Social Security benefits based on Internal Revenue Service (IRS) rules. If you:
• file a federal tax return as an “individual” and your combined income* is
between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
more than $34,000, up to 85 percent of your benefits may be taxable.
• file a joint return, and you and your spouse have a combined income* that is between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits
more than $44,000, up to 85 percent of your benefits may be taxable.
• are married and file a separate tax return, you probably will pay taxes on your benefits.
” file a federal tax return as an ‘individual’ and your combined income* is
between $25,000 and $34,000, you may have to pay income tax on up to 50 percent of your benefits.
more than $34,000, up to 85 percent of your benefits may be taxable.
file a joint return, and you and your spouse have a combined income* that is
between $32,000 and $44,000, you may have to pay income tax on up to 50 percent of your benefits
more than $44,000, up to 85 percent of your benefits may be taxable.
are married and file a separate tax return, you probably will pay taxes on your benefits. “
Many of us drawing Social Security are already drawing at a big discount.