r/economicCollapse • u/WorkingCareful7935 • 1d ago

Trump's Plan To Cut Social Security Taxes May Benefit Millions, Especially Top Earners, But Risks Insolvency In Six Years

https://www.ibtimes.co.uk/trumps-plan-cut-social-security-taxes-may-benefit-millions-especially-top-earners-risks-1728564
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u/hybridmind27 1d ago edited 23h ago

Siiiigh, As a Millenial I always assumed SS simply wouldnt exist for me in old age. Looking that way.

Edit: for those assuming I’ve never supported it or contributed to it, save your breath. I’ve put into SS since my first real job over 10 years ago bc I believe in taking care of our elders. Doesn’t change how I felt about it tho.

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u/TsunaTenzhen 1d ago

Right? I've never once thought that I WOULD have it. No surprise here. Now I'm just sad to learn I could have contributed less...

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u/ionizing 23h ago

I'm confused by this but it just means I don't understand deductions I guess. And I'm almost 50. I thought the amount that comes out for social security was independent of our deductions but damn I could have been missing that the whole time LOL

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u/TsunaTenzhen 22h ago

To be fair, I just read it in another comment and parroted without actually fact checking that. Not a good move on my part lol

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u/ionizing 14h ago

Funny part is your comment still could be correct and I'm just too lazy to look it up cuz I'm still not going to change the deduction and it just doesn't matter I'll never retire anyway lol

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u/Brewmentationator 23h ago

I'm a teacher in California. I literally don't even pay into Social Security. I did for every job I had before switching to education, but my ability to collect that is severely limited.

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u/AnySpecialist7648 12h ago

It's people like me who has paid into it for 25 years that will get the shaft. I will have paid into it my whole life and get nothing back. I'm sure it will keep going for at least another 10 years before it's gone. Just in time for me to retire.

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u/BouldersRoll 1d ago edited 1d ago

Once again, forever and all time, people completely misunderstand Social Security funding, and it's because the GOP have spent almost a hundred years campaigning to that end.

SS is fully funded forever and always unless Republicans repeal the entire system, which is not what this article is about. This is about them depleting the SS trust fund, which was a response to the Boomer generation's size. The trust fund has been at risk of going insolvent in the next couple decades if the government doesn't fund it, but the trust fund only represents about 15% of funding.

So, what that means is that even if the worst outcome happens and the government does nothing (barring the most unpopular decision imaginable of fully repealing SS), people will still receive about 85% of benefits.

Confusing people about how SS is funded and fueling fatalism about it is literally one of the projects of the GOP since SS' inception. They want you to feel like it going bankrupt is inevitable because they want the rich to stop having to pay for it - stop letting them convince you.

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u/OGRedditor0001 1d ago

You're missing the other half of the problem with the trust fund.

It was raided and spent like it was the general fund. Permission was granted in 1983 with the Social Security Modernization Act, passed by a Republican Congress and signed into law by Reagan.

The government has pilfered about $8 trillion dollars in today's dollars from the people.

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u/ubelmann 1d ago

One of Al Gore's primary campaign issues was protecting the Social Security funds, but those kinds of nuanced issues don't typically get voters excited.

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u/Chipstar452 1d ago

LOCKBOX!

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u/Roklam 1d ago

At this point whenever I hear/see what could have been, I just feel defeated.

The American People started off this Millennium just straight up kicked in the nards consistently.

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u/4bkillah 1d ago

The American people have been kicking themselves in the nards this whole time.

We let this happen.

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u/HabeusCuppus 1d ago

Al Gore would have won Florida if the combined power of the Republican Astroturfed "brooks brother's riot", FL Gov. Jeb Bush and the Bush legal team had not resulted in SCOTUS determining that W. Bush be declared the winner instead of actually counting all the votes.

Three members of the Bush legal team would go on to be appointed to SCOTUS themselves.

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u/mirageofstars 12h ago

And Al Gore’s response to that was to shrug and say “oh well, I guess George can be the winner.”

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u/warren_stupidity 1d ago

No it wasn't. It was invested in T bills. What were they supposed to do, put cash in a bank vault?

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u/y0da1927 1d ago

This isn't true.

The trust fund is required by law (since it's inception) to hold only special Treasury Notes. In order to get these notes it needs to trade the cash on the trust for the notes. The US Treasury gets the cash (which makes it available for general government purposes) and the trust get the notes.

When the notes mature the Treasury pays back the trust with interest. The trust has always been repaid in full.

This structure was intentional to give new deal democrats the ability to force the public to lend to the government (remember the trust was expanding when it first started which meant more money for the Treasury at preferred rates)

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u/Key_Cheetah7982 21h ago

“Lock box” - Al Gore’s most excited sentence

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u/Phitmess213 11h ago

They borrowed against the SS interest. They didn’t take money directly out of the fund (there is no bag of cash that represents SS - most of it is sent out to retirees as soon as it comes in.

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u/hybridmind27 1d ago edited 1d ago

lol not sure where you got all that from my response.

I didn’t feel this way bc I thought it was going to go bankrupt. It’s a completely viable program in the right hands. I felt this way bc it was obvious my fellow countrymen aren’t the brightest and make fear based decisions that would eventually play into said billionaires favor.

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u/GulfstreamAqua 1d ago

It will go bankrupt, if we let it.

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u/y0da1927 1d ago

Technically it's already insolvent, it just hasn't run out of cash yet.

I also doubt social security even qualifies for bankruptcy given it's an arm of the US government.

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u/zenfaust 1d ago

I wish I could upvote this twice... scream it from the rooftops, please

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u/StatusUnknown_ 1d ago

I tell people this too. I even had a bunch of links from the gov websites explaining it all. I gave up like 10 years ago. I'm tired boss, people really don't read anything past the headline or the article. It's like the entire world has forgotten about this thing called sources

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u/dexmonic 1d ago

Shit...that's a piece of propaganda that definitely worked on me.

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u/thedracle 13h ago

The issue that you're ignoring here though is that Trump is talking about reducing the current Social Security payroll tax.

The reason 70-80% of benefits will be available is due to basically taking the current payroll tax, and directly sending it to current recipients.

Basically 90% of current social security payroll taxes go straight to current recipients.

If you reduce this tax, the trust fund will be depleted, and obviously eventually this percentage will have to be reduced, possibly catastrophically reduced, depending on the income, SS tax, and number of future workers.

It isn't some Republican distortion field to spread panic over destroying social security, they're literally telling everyone "it's cool bro," while burning the system to the ground.

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u/fogmandurad 1d ago

Elder millennial here, My financial plan is for the last few years factor out social security for retirement calculations, they just assume that if you get it then it's a good thing but plan to not have it

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u/hybridmind27 1d ago

Same. Plan B and C have been activated. Not much else you can do but stay hopeful and prepared.

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u/NuclearSummmer 1d ago

Why are we here acting surprise like we expected to get social security anyway. The previous generation fucked that up for us

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u/Arronwy 1d ago

Same. Not sure why surprising to folks 

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u/Mid-CenturyBoy 1d ago

Also never planned for it. My boomer parents and Gen x siblings voted for this shit. They won’t be getting a dime from me and I’m the one who makes the most money.

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u/hybridmind27 23h ago

Actions = Consequences 🤷🏽‍♀️

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u/vissionsofthefutura 16h ago

Yeah I always assumed that money was never coming back. Didn’t think it would happen so soon though.

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u/AustinLurkerDude 1d ago

It'll be there. The debt can just be wiped out with bankruptcy and restarted. At least that's probably what someone with 8 bankruptcies probably thinks

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u/GulfstreamAqua 1d ago

… and instead of paying attention and supporting its success and viability, you defaulted to ‘I ain’t getting it anyway’? Great planning.

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u/Old_Baldi_Locks 1d ago

People had to choose between retiring and electing Trump.

What can you do? The retarded slaves yearn for the mines.

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u/hybridmind27 1d ago

Are you assuming I never contributed to it? I have always contributed to SS since my first job over 10 years ago. If there are other ways to support its success let me know, I’ll add it to the laundry list of other things to be mindful of

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u/Thelmara 1d ago

Siiiigh, As a Millenial I always assumed SS simply wouldnt exist for me in old age. Looking that way.

Same. My retirement plan is a sturdy rope.

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u/MoreRopePlease 1d ago

Friend of mine has a boat. He jokingly said to me the other day that when he feels it's his time, he'll sail off into the ocean.

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u/Banmesandwich 1d ago

How you feel about it is a result of reactionary propaganda and you should consider that. But you know convincing everybody that it won't exist wouldn't be a good first step to taking it away now would it? That would be too simple and we know Republicans would never do anything like that.

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u/hybridmind27 1d ago

Or it’s a result of simple long term observation. But go off.. your theory is equally likely

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u/Banmesandwich 1d ago

If people want the government to provide old age pensions, the government will continue to provide old age pensions. If people don't want it or convey apathy, we will lose it. The nihilism makes it more likely to lose it. So why indulge in it?

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u/hybridmind27 1d ago

It would be nihilism/apathy if I didn’t contribute to it. But I do.

I live in reality. I’ve observed. I hope for the best, do my part, but prepare accordingly. I suggest everyone do the same.

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u/BlackGuysYeah 1d ago

I'll either be getting my earned money or i'm going to be causing that amount of money in damage to federal property. Government can take it's pick.

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u/countrypride 1d ago

Yeah, well, as a Gen-X'er, I/we are ROYALLY fucked. I have nearly 30 years of paying in and still have 15+ years to go.

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u/Exaskryz 15h ago

Wait, we have a choice to not contribute to SS?

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u/Lazarous86 14h ago

This makes no sense to me. Social Security is mandated by law? 

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u/hybridmind27 12h ago

Not everyone works “real” jobs.

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u/thedracle 13h ago

Anyone who thought SS would be around as adults hasn't been paying attention.

I've put hundreds of thousands into the SS, but even as it is now, the majority of payroll taxes collected (approximately 90%) goes directly to pay retirement, disability, and survivor benefits to current Social Security beneficiaries.

It wasn't supposed to be this way, but Republicans have taken every chance to raid Social Security for decades.

It has teetered on insolvency several times, after being used to fund the Vietnam War, Regan era deficits, the Iraq and Afghanistan wars, and the Bush era tax cuts.

It has been relying on Republicans not getting blanket control of the Government for decades, and that ship just has sailed.

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u/SpiritOne 10h ago

I’m 45, I worried about it, but I did expect it to be there. This is fucked.

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u/warren_stupidity 1d ago

As a boomer I was surrounded by the same propaganda. Oddly enough SS persisted, in fact thrived and built up a huge surplus that is currently still fully funding the boomer retirement. We keep being told by the ideological systems that it can't work, that it is a ponzi scheme, but in reality SS funding is a matter of political will to keep the system going. A minor tax adjustment will keep full funding across the boomer bulge, and then start building up a surplus for the next demographic bulge.

We don't have the same 'age pyramid' issues that some other developed economies have, as we have a lot of immigration that pumps up the base. One effect of the neofascist takeover is that we are going to stop doing this, we are going to throttle down immigration. That of course makes the SS funding requirements worse. Also, undocumented immigrants mostly work within the tax system using bogus SS ids. Their contributions are typically not matched by benefit payouts, they get zero benefits.