Tuesday, October 18, 2016

HuffPost is gonna HuffPost

From "Social Security Beneficiaries Are Getting A Modest Raise — But Many Say It’s Not Enough"
Some seniors react to the COLA as if it were a policy crafted by lawmakers, expressing anger at elected officials when, as was the case this past year, they do not get a yearly increase.
In reality, the size of the COLA is not in politicians’ hands. Designed to keep inflation from eroding benefits, the COLA is automatically based on growth in the consumer price index designed for wage earners and clerical workers, a metric known as the CPI-W. A year-over-year rise in the CPI-W means an increase in benefits for Social Security recipients.
However, that doesn’t mean progressive groups are engaging in empty political posturing. To be sure, they are using the meager COLAs to advance their larger argument that Social Security benefits are too modest, particularly in light of the growing role the program plays in providing retirement security.
So there's this government program and the rise in benefits is dictated by the current law which is based on the inflation rate.  The inflation rate has been historically low, so the rise in benefits is low.  But that's no fair!  And it's not political posturing - perish the thought.

The answer, of course, is to raise the Social Security tax rate so that seniors can receive more generous benefit hikes.  And since SS is universal program with a flat tax rate, this tax hike would apply equally to all income.  What do you say, Bernie Sanders?  Let's have a tax hike for everyone.


Anonymous said...

The answer, of course, is to raise the Social Security tax rate so that seniors can receive more generous benefit hikes. And since SS is universal program with a flat tax rate, this tax hike would apply equally to all income. What do you say, Bernie Sanders? Let's have a tax hike for everyone.

As long as you disregard decades and decades of monotonously stable polling showing steadfast public approval for maintaining Social Security with tax increases, that's a really potent "gotcha."

Eric2 said...

I beg to differ. There is approval for taxing "the other guy" by raising the cap or means-testing benefits. There is no appetite for raising the payroll tax such that it hits everybody equally.

Anonymous said...

That would be incorrect. A sampling from the past 40 years:

Forbes, 2014: New Survey: Americans OK With Tax Hikes To Protect Social Security

CNBC, 2013: Americans Will Pay to Shore Up Social Security: Poll
"About 8 in 10 (77%) say it is critical to preserve Social Security even if it means increasing the Social Security taxes paid by working Americans."

CBS/NYT, 2011:
62% favored raising taxes to cutting benefits

Gallup, 2005 and 2010 and 2015:
In all three surveys, people said they'd rather raise taxes than cut SS benefits (by margins of 15%, 9% and 14%).

In three different age ranges, 63%, 62% and 58% favored "increasing taxes somewhat"

Harris survey, 1981:
Majority support for increasing taxes to shore up SS

Hart Survey, 1979: "Higher taxes were not only preferred as an alternative to lower benefits but were also preferred as an alternative to raising the retirement age."

Shapiro/Smith polling, 1976:
Public support for higher taxes by a 2-1 margin in two separate polls

Eric said...

Hmm...the prestigious "National Academy of Social Insurance" has been busy polling.

But let's assume it's true that Americans will support universal tax increases in the payroll tax to pay for a quasi-universal program. Why isn't Hillary out there running on this popular idea?

Because people support the cleverly-bundled push-polled tax increases...until it hits them in the wallet. That's why Democrats are lockstep in getting those bad ole Richie Riches to pay for everything.

To paraphrase Barney Frank: "Government is the things we decide to do together...except pay for it."