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(16,402 posts)[font color="navy" face="Verdana"]I thought the Social Security budget was completely separate and apart from the general budget -- funded separately, as well, by Social Security withholding and not by regular federal taxes.
Given that, the only thing hamstringing Social Security is the low earnings cap.
If I'm mistaken, please correct. Otherwise, let's keep our budgets straight.
Drew Richards
(1,558 posts)The profits. Ss has been on the fat cat chopping ock ever since so that they can get the rest.
silverweb
(16,402 posts)[font color="navy" face="Verdana"]So my original point is still valid and the interest earnings that Social Security has "loaned" to the general fund need to be repaid. Two separate issues, really.
It's not tax avoidance by the wealthy that's the problem, it's revenue theft from the Social Security fund by Congress.
Drew Richards
(1,558 posts)1. The cap was implemented when there was a lower life expectancy and pushed through by the wealthy to avoid paying in even though they like ALL Americans receive a ss check from social security after 67.
2. The institutionalized 4000+ loopholes in the tax code that allows those with wealth to avoid even paying the top 42% tax level through corporate division renaming to claim losses, of shoring earned income and vulture capitalism liquidating companies after looting their net worth and paying it out to themselves...offshore before tanking the companh....
These manipulation ROB the general fund of an estimated 23 trillion dollars a year in taxes that should be going to the general fund to ensure governments ability to govern and provide fund for the general welfare of ALL Americans.
And finally
3. The outright illegal theft of social security interests to the ss fund by the Reagan's administrations redirection of the funds estimated value to the general fund so that the government is borrowing from itself with OUR money but then instead of paying it back with interest or actually paying it back at all they borrow funds from treasury to pay only the base interest back to the fund which they then take back out...its a fucking shell game and our funds are the pea...
So really the OP is more correct than the third issue. And the first two issues are TENS OF TRILLIONS OF DOLLARS where as number 3 is I believe currently estimated at 2.1 trillion a year.
silverweb
(16,402 posts)[font color="navy" face="Verdana"]Working right now, but will read more carefully to thoroughly understand after work.
Thanks again!
Rozlee
(2,529 posts)But, I've never been able to locate any more information about it, even though I know that the fund is raided regularly.
Drew Richards
(1,558 posts)Of specially secured national treasury bonds that is owed payment and interest from the general fund...this is the weaslly magic of what ronald reagan did...he institued borrowing from ss fund with treasury backed securities and then paying nothing back but partial interest from taking addition loans from the fed...
So yes the social security fund is the largest (compelled against the peoples wishes) lender to the General fund and we are owed something like 12 trillion to social security currently.
TBF
(32,031 posts)subjected to social security tax. That cap should be removed as well - all earnings should be taxed. All.
JDPriestly
(57,936 posts)Social Security trust fund that was created during the Reagan administration that is LOANED to the general fund and makes up part of our national debt.
But the OP is right, tax avoidance is the biggest threat to our national solvency. It is the biggest cause of our national debt, and some of it is perfectly legal. So it is the corruption in our business community and in our government (which enacts and enforces the tax loopholes and special deals and overlooks the money in foreign accounts) which are causing the problems with our national finances.
Fortunately, Obama has brought down the national debt by increasing employment and improving our economy just a bit overall.
joeglow3
(6,228 posts)If it was illegal, it would be called tax evasion.
JDPriestly
(57,936 posts)blkmusclmachine
(16,149 posts)blkmusclmachine
(16,149 posts)adirondacker
(2,921 posts)Yo_Mama
(8,303 posts)Total federal tax revenue is less than 3 trillion (under 2.8 trillion last year). The claim of "trillions" in the OP means at least 2 trillion, and that ain't happening. Unless "tax avoidance" means using the legal tax breaks granted in the tax code.
http://fms.treas.gov/mts/mts1213.pdf
Second, SS is funded by law through FICA deductions on wages, and the only "tax avoidance" taking place in relation to that is for people working under the table, which is far less a trillion. Total federal tax contributions for retirements, which includes Medicare tax, was last estimated at an annuaizedl 1.1 trillion (see Table 10 here):
http://www.bea.gov/newsreleases/national/gdp/2013/pdf/gdp3q13_3rd.pdf
So basically, the claim above makes no sense to me. If you have any supporting information that could document the claim, please post it. A poster isn't convincing.
The reason I am so sure that this is nonsensical is because of Table 10 in the GDP link. Total annualized income was last estimated at 14.2 trillion, of which 8.9 trillion was in wages and benefits, leaving 5.3 trillion total for investment and business income plus social benefits. Social benefits were 2.45 trillion, meaning that all other investment/business income is less than 3 trillion. To take another 2 trillion off that would imply a tax rate of over 90% for the top tier earners.
The figures just don't add up here.
Contributions for government social insurance were 1.1 trillion, and income taxes and excise taxes were 1.65 trillion of which a lot is already paid by the top tier. Add another 2 trillion to that? No.
reformist2
(9,841 posts)So it does seem that it matters to Social Security's future that all taxes be paid.
Social Security is paid for by workers and their employers. It is solvent at least for the next 20 years. If the minimum wage is increased, and the ceiling on maximum salary is adjusted, it will be solvent for the forseeable future. As a matter of fact, the federal general fund owes SS quite a bit of money - and where does money come from that goes into the general fund? Taxes. The reason the rich and the corprats hate SS is: 1) they'll never need it and 2) they don't want to pay taxes to generate the revenue necessary to replenish what Congress stole from SS.
Their solution? Cut SS - or eliminate it altogether and give all the money in it to Wall St. They'd rather do that than increase wages, lift the cap above which most of them, beyond Jan 2 or so, don't even pay any SS taxes, or pay their fair share of taxes to replenish the money stolen from SS by Congress.
It's class warfare. And they won.
davekriss
(4,616 posts)El_Johns
(1,805 posts)Add to that your "legal" dodges, like how corps like Exxon wind up paying nothing, & you can probably get there.
Yo_Mama
(8,303 posts)Just trying to inject a note of reality into this debate.
El_Johns
(1,805 posts)On Friday, the IRS released a new report on tax evasion in the U.S. (via Demos' Policy Shop and h/t to @BlogWood). Using data for 2006 (its previous tax gap report used 2001 data), it found a gross tax gap (income tax due but not paid on time) of $450 billion and a net tax gap (factoring in tax paid late) of $385 billion for 2006, versus $345 billion gross and $290 billion net in 2001. This was due almost entirely to higher income and tax liability, not an increased percentage of cheating. As Policy Shop points out, over 10 years, this will get us to well over $3 trillion in lost taxes.
There are a number of eye-popping numbers in the IRS report, beyond simply the magnitude of tax evasion. Most evasion takes the form of underreporting and underpayment, not non-filing. The amount of dollars lost to underreporting rose by 32% between 2001 and 2006; one-third of that increase came in the corporate income tax.As another sign of growing inequality in the U.S., between 2001 and 2006 corporate income tax due doubled (meaning that profits approximately doubled), while individual income only rose by 15%.
Not surprising, but still striking, is what the report says about who cheats on their taxes. People subject to both information and withholding requirements only underreport 1% of their income; people or businesses subject to information reporting but not withholding misreport 8%, but entities subject to neither information or reporting requirement, "such as business income" [on the individual, not corporate, income tax] has a 56% misreporting ratio. Since middle class taxpayers mainly fall in the first group, it is obvious that most of the opportunities for cheating belong to the wealthy.
To put this in dollar terms, of the $450 billion gross tax gap, $376 billion of it comes from underreporting income. $235 billion is on individual income tax, of which $122 billion is business income (in addition, there is another $57 billion in self-employment tax that is underreported). Finally, $67 billion of corporate income tax due was underreported. (And this is only illegal tax evasion. Abusive corporate tax avoidance, some of which will be declared illegal retroactively, would add many billions more.)
2006's $385 billion in net evasion of federal taxes would cover about 1/4 of the FY 2011 budget deficit (and, as Policy Shop notes, it exceeded the $248 billion budget deficit of 2006). As Policy Shop says, the case for giving the IRS further resources for enforcement is a strong one, but Republicans in Congress are actually trying to reduce enforcement resources.
http://www.middleclasspoliticaleconomist.com/2012/01/irs-finds-us-tax-evasion-385-billion.html