jeremy said:

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heynow said:

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mesocosm said:

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Meanwhile these EOs do nothing to help the American people

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You don't know what the payroll tax is, do you?

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I don't, will someone explain it? I don't know how any of this will impact my paycheck. Thanks in advance.

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If I'm misreading sarcasm, forgive me.

Payroll tax is the 15.3% of your annual pay that funds Social Security (OASDI @ 12.4%) and Medicare/Medicaid (FICA @ 2.9%). You pay one-half (15.3%/2 = 7.65% = 6.2% OASDI + 1.45% FICA) and your employer pays the other half. OASDI has an income cap which changes annually, for 2020 it's $137,700, which means income above this amount is not hit with the 6.2%/12.4% OASDI tax. FICA has no income cap but it does add an additional 0.9% on all income above $200k, which is an Obamacare rule, so higher income earners pay 2.35% on $200k and up.

The current tax holiday is only a deferral, meaning it may come due April 15th. If so, it'll be an early refund for some and a delayed tax for others, which will be a point of contention for many at tax time. If future payroll taxes are eliminated into perpetuity, as mentioned in some outlets, this is tantamount to Social Security privatization. I'm more than at peace with that, as long as retirement contribution limits, both individual and employer match, are raised by 12.5% of income to accommodate. I would save and invest those dollars for both me and my employees. We're already paying it, why not continue to fund our future incomes with those dollars.

Went further than necessary, I know. It's been on my mind since Bush proposed privatization going on two decades now.

That_Guy_Moose said:

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blindey said:

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That_Guy_Moose said:

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He's trying to kill the payroll tax. That means that people who paid into it for their whole lives have an uncertain SS future..

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I've been asking for this deal forever. I'be been maxing out SS for the last decade. I'd gladly just let the benefit go if it meant I could stop paying right now.

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That would bankrupt nearly 50% of retirees in this country.

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yes, because it is a government operated Ponzi scheme.

That said, SS is effectively $35,000 out of my family's pocket every year. At 40 years, that works out to $1.4 million over a career AND THAT IS JUST IF THE MONEY IS STUFFED INTO A MATTRESS. I will never see anything close to that much in terms of a return from SS so I would be happy to see the system phased out (or be given the option to opt out now).

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To end it, you have to ask 200 million Americans and every company who have paid into it to take an L on everything they ever paid into it.

They will get none of it back.

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I will gladly continue to pay into the rest of my working career and willingly accept not receiving anything back on it if that means it ends or is significantly restructured.

Quote:

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yes, because it is a government operated Ponzi scheme.

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That is exactly what it is...

I'm glad you are all willing to donate all of your prior SS contributions just so you don't have to receive benefits in the future. Someone who really needs it will be greatly benefited by your altruism.

The main issue I'm arguing is not the efficiency of SS, but the fact that tens of millions of retirees (a Trump base group) require SS and Medicaid just to live in this country. Do you all NOT see how that might maybe affect what his electorate thinks of him?

Some friends of mine went to DC this weekend to visit Steve Moore and his wife, former Trump campaign economists who is often on Fox News had them over for dinner last night.

Moore told the group of friends that with Trumps Executive Orders over the weekend paving the way for economic stimulus that the Democrats are blocking as the election draws near so Trump can't score a victory may have won him the re-election.
In case you don't know Steve Moore is the one holding the cake.

Boy, talk about starting a conversation!

blindey said:

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That_Guy_Moose said:

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blindey said:

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That_Guy_Moose said:

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He's trying to kill the payroll tax. That means that people who paid into it for their whole lives have an uncertain SS future..

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I've been asking for this deal forever. I'be been maxing out SS for the last decade. I'd gladly just let the benefit go if it meant I could stop paying right now.

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That would bankrupt nearly 50% of retirees in this country.

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yes, because it is a government operated Ponzi scheme.

That said, SS is effectively $35,000 out of my family's pocket every year. At 40 years, that works out to $1.4 million over a career AND THAT IS JUST IF THE MONEY IS STUFFED INTO A MATTRESS. I will never see anything close to that much in terms of a return from SS so I would be happy to see the system phased out (or be given the option to opt out now).

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SS unfunded liabilities are estimated at $21 trillion. It would make more sense to buy out future benefits in today's dollars, based on average life expectancy, earmarked for an individual qualified retirement plan placed with an employer. Or, phase out benefits based on certain cutoff ages to allow older Americans to continue receiving benefits while the younger generations fund their own retirement and receive exceedingly less from SS until future retirees receive nothing from the government. There are ways to do it that don't hurt current recipients.

OldArmyBrent said:

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So you think we should do something huge to fix social security? That is something I can get on board with. Privatize, raise retirement age, anything.

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Yeah, we should, and I'm on it, so...and raising the retirement age is good regardless

But privatizing it is a bit scary. It would be another form of 401-k pre-tax savings and I am currently fearful that gov't is eventually going after all of the trillions in 401-k's... 30 years from now, I may not care, god-willing. But I fear it may happen much sooner than that.

There is an uneasy pact with the Fed right now over Soc Sec, which has been raided for decades...it's a big IOU.

And any conversion to 401-ki style savings has that same risk of being raided...It is only a law after all; what government giveth, government can taketh away...

LegalDrugPusher said:

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Some friends of mine went to DC this weekend to visit Steve Moore and his wife, former Trump campaign economists who is often on Fox News had them over for dinner last night.

Moore told the group of friends that with Trumps Executive Orders over the weekend paving the way for economic stimulus that the Democrats are blocking as the election draws near so Trump can't score a victory may have won him the re-election.
In case you don't know Steve Moore is the one holding the cake.

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What'd the esteemed Steve more say about the relief bill passed by the House that the Senate sat on for weeks until they decided to "negotiate" at the last minute? I bet his mouth was too full of cake to talk about it. The Rs are just as much to blame for this.

mesocosm said:

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Meanwhile these EOs do nothing to help the American people

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I would not - read the EOs

There are only two ways to reform to make SS solvent. Raise revenue, or lower expenses. Basic math. Trump is trying to lower revenue. I'm not exactly an oracle predicting bad long term consequences for SS solvency caused by this decision.

Also, just so we're being clear here, this is not a good thing for American system of Government. If we're ok with Trump's EO here, we must also be ok with President AOC's executive order to create a wealth tax of 100% on everyone with more than $200,000 in a bank account.

Celebrating the Executive Branch becoming the de facto Legislative Branch is not a good thing. If you like what your team does, when the other team has the same power they'll use it do terrible things for your team.

Malibu said:

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Also, just so we're being clear here, this is not a good thing for American system of Government. If we're ok with Trump's EO here, we must also be ok with President AOC's executive order to create a wealth tax of 100% on everyone with more than $200,000 in a bank account.

Celebrating the Executive Branch becoming the de facto Legislative Branch is not a good thing. If you like what your team does, when the other team has the same power they'll use it do terrible things for your team.

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Obama already did that. So here we are.

I'm not up to speed- could someone explain the DACA/Roberts comparison to these EO's?

Marlin39m said:

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I'm not up to speed- could someone explain the DACA/Roberts comparison to these EO's?

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The DHS issued a memorandum (presumably at Obama's request) for the DHS to not enforce immigration law against DACA Dreamers. You can read the memorandum here.

https://www.dhs.gov/xlibrary/assets/s1-exercising-prosecutorial-discretion-individuals-who-came-to-us-as-children.pdf

SCOTUS ruled that it is constitutional for the Executive branch to use memorandUm against the enforcement of policies by agencies falling under the executive. You can read the opinion here:

https://www.supremecourt.gov/opinions/19pdf/18-587_5ifl.pdf

While in theory, they are correct that the SC's ruling clearly states that a memorandum can be used to direct how laws are enforced by the executive, there is some distinction between a memorandum and an EO. Since most memorandums are "weaker" versions of EO's and that don't have to be published to the Federal Register, it seems logical that the same ruling will apply to the EO if challenged in court.

Basically the argument is that Trump can not tell the IRS to not collect payroll taxes, but the courts have decided that he should be able to influence executive agency enforcement based on the DACA ruling.

Another issue is that the SC case was not inherently about the power of the executive; the ruling was that the case made by the DHS was capricious in nature and did not satisfy due process. It was basically a moratorium on the ability of the executive branch to affect policy until due process was followed (which actually can be argued hurts the case that this provides legal standing for Trump's EO as it pertains to the payroll tax).

very nice summary. A few additions:

DACA was not just a non-enforcement provision, it created a special process for these people. (That distinction is very important to what happened next). The Trump payroll EO appears to just be non-enforcement.

The executive branch's ability to enforce certain policies through non-enforcement didn't start with Obama. That was something already ruled as permissible by SCOTUS 40 years prior.

Now, back to the distinction. In the DACA case, because it was more than non-enforcement, the APA applied which is why "arbitrary and capricious" mattered. Trump can get rid of it, but certain admin. rules have to be followed.

If we are cursed and Biden wins, he can get rid of the the payroll deferral without having to meet any requirements of the APA as it does not apply to an executive order that is simply non-enforcement.

What makes the DACA ruling so infuriating is that APA applied to get rid of it, but it didn't seem to matter that APA wasn't followed when setting it up.

Trump administration argued in the DACA case that if its just non-enforcement, then it is not reviewable by the the Court. SCOTUS did not make a ruling on that issue because DACA was not just non-enforcement. (IMO, the Court would have agreed with Trump on that issue, or likely never even takes the case to begin with if it was just non-enforcement. That bodes well for Trump on the payroll EO)

Thanks for the added clarifications!

Those do nothing senators deserve to lose. Very few of them have made any effort to stop this bunch of communists and sit there as it all goes to hell in a basket. If your not part of the solution then you are part of the problem!

tycolab1@yahoo.com said:

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Those do nothing senators deserve to lose. Very few of them have made any effort to stop this bunch of communists and sit there as it all goes to hell in a basket. If your not part of the solution then you are part of the problem!

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I agree with you. We should replace all of them with their challengers!

Thank you.

So what happens when people start to understand that Trump wants to fund Social Security and Medicare from general taxes, something that the Republican Party has always opposed?

From http://nypost.com/2020/08/09/trump-says-payroll-tax-cuts-wont-impact-social-security/:

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Speaking to reporters before boarding Marine One, Trump said his sweeping proposal to boost the economy through the cuts amid the coronavirus crisis would in no way affect the longstanding federal program.

"This will have no impact on Social Security," Trump said, adding the program would be replenished by the General Fund. "We protect Social Security."

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From http://www.forbes.com/sites/andrewsolender/2020/08/09/white-house-walks-back-permanent-payroll-tax-cut-amid-social-security-concerns/#5d01fd686b3b:

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Treasury Secretary Steven Mnuchin said on Fox News Sunday that, if reelected, Trump would "push through legislation to forgive that so, in essence, it will turn into a payroll tax cut," adding the lost revenue would be offset by "an automatic contribution from the general fund to those trusts funds."

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"Here's the problem: payroll taxes go exclusively to fund Medicare and Social Security, however much they dislike those payroll taxes, Republicans have always opposed replacing them with general tax revenues," tweeted Patrick Chovanec, an adjunct professor of international and public affairs at Columbia University. He notes that even with Congress signing on to a payroll tax holiday, it would "create a hole" in funding Medicare and Social Security, which Republicans would normally be reluctant to fill. "Without Congress signing on, those taxes are just deferred a few months until a bigger bill comes due," Chovanec concludes.

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So what does that mean for the future? I suspect that it really means that it will be far easier for Contress to raise Social Security benefits because they will no longer have to worry about depleting the Social Security Trust Fund -- all they will have to do is take it without limit out of the general funds.

And people still think Trump is a Conservative? Hahahahaha.

The ProFettsor said:

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If future payroll taxes are eliminated into perpetuity, as mentioned in some outlets, this is tantamount to Social Security privatization.

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Quite the opposite.

They'll just be paying for it out of the general tax revenue.

How do you like them apples?

eric76 said:

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The ProFettsor said:

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If future payroll taxes are eliminated into perpetuity, as mentioned in some outlets, this is tantamount to Social Security privatization.

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Quite the opposite.

They'll just be paying for it out of the general tax revenue.

How do you like them apples?

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I just read thru the two articles you posted. DJT mentions saving SS but no one asks the question about the future of SS so it's, arguably, open to interpretation. If the payroll taxes are cut, as I'd mentioned in an earlier post, there's no reason why slowly phasing out SS for future generations of retirees and allowing us to privatize won't happen or isn't a possibility. Of course, anyone can try to change that at any point in the future, but it may end up being a 'Roosevelt versus SCOTUS' fight all over again to add back payroll taxes. Oh, wait, they're contributions, not taxes. It's hard to say yet fun to speculate. At the same time, cutting future revenue without cutting spending drives me out of my damn mind, so if funding comes out of general revenue with no plans to phase out or plans to stay the course with SS increases, that's a bushel of rotten apples, in my opinion. Thanks for the share.

mesocosm said:

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Meanwhile these EOs do nothing to help the American people

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Not electing a Democrat President absolutely helps the American people.

heynow said:

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mesocosm said:

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Meanwhile these EOs do nothing to help the American people

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You don't know what the payroll tax is, do you?

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Trump stopped payroll taxes on the employers side, not the employees. Paychecks will go up exactly $0.

Dont be a jackass. I understand ss and all that. What I was asking is what does "deferment" mean to my paycheck. I should have been more clear, but not need to be combative.

Does the reduction in the payroll tax affect SS funding?

boboguitar said:

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Does the reduction in the payroll tax affect SS funding?

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Only if the tax is eliminated.

If it's eliminated, SS will have to be funded via the General Fund (which already technically funds it via special issue securities). In this case it would require other liabilities to fund SS to start drawing it down, and Congress would have control of how it's funding is conducted every year.

Essentially it means that SS would have to be funded by taking on debt. Since cash from the payroll tax goes into the General Fund to purchase the securities, that means that the overall GF will be impacted without the cash flow in. Seniors would still likely get their payments but there are many downsides to funding SS this way.