Do Entitlements Require Political Action
 Most of us have invested substantial income in SS and Medicare.
I  exclude Medicaid it is not an entitlement, as 2025-26 budget will prove.
Medicaid is part of our Safety Net, which I am sincerely proud of.


SS Bankruptcy Unlikely

Payroll Taxes Stable

Delay SS Bankruptcy

Entitlements Basics

 

1. SS Bankruptcy Unlikely

Introduction. As a result of changes to Social Security enacted in 1983.
Fund projected to run out in 2033.

Social Security Bankruptcy Date 
Year of Projection

Bankruptcy Date
1997

2019
2010 2035
2023 2033
The SS bankruptcy date keeps slowly moving forward
because of a conservative 1.9% GDP growth rate,
a conservative 5% unemployment rate, and other conservative measures.

Note: the economy slowed down during the recession making bankruptcy date earlier.

Note: If SS Fund were to go bankrupt,
Treasury could easily make up the difference.
 

2) Payroll Taxes Stable, but a change may be needed

 

 `

 

See Taxing the Rich
 

3. Delay SS Bankruptcy
   Increase Deficit      Increase Taxes      Cut Programs

 

Relevant Information
Cash Outflow Will Increase, It went negative in 2018

 

  

We Have the Funds

U.S. Household Total Financial Wealth $160 Trillion as of 2024

 

 

  


 Is a New Entitlements Law Needed?
To Date No Political Solution Offered  Source


 

 

 

 

Making Employer Portion of Payroll Taxes
Part of Individual Income Would Help
Low Wage could be Excluded.

 
 

Entitlements Basics

Editor's Notes:

1) The Greenspan Commission took two years to come up with a tax law
and then it took behind the scenes committees to come up with a solution.

2) WHY SS retirement benefits are progressive.

Low income retirees contributed less into the SS fund than those with higher income.
Someone with low income who paid in half the maximum tax
receives more than half the maximum income benefit,

  There here are also many SS dependent benefits.
These benefits provide much to people with children. 
Thus, low income with children SS recipients receive a much higher
 return than there childless high earning counterparts.

But, life expectancy data indicates average low income recipients will die much earlier
than high income contributors and therefore may get a much lower return.

3) We need to eliminate extreme end of life benefits for Medicare and Medicaid. 
If necessary, create a Medicare Gold with a one-point increase for those who
do not a want benefits limited.

4)  An increase in the qualification ages from 62 and 65+
is not a decrease in benefits because people live longer.

 
Summary Definition Who Benefits from
 Most to Least		 Problems

Concerns
Medicare Subsidized healthcare
for the elderly		 All benefit are the same,
high income earners pay most

Required additional
health care cost
difficult for many

Longer life, especially for poor people who now also have subsidized health care, will increases cost. Free cases poorer health. Solutions, later eligibility, less coverage, higher deductibles currently not acceptable to electorate.
Social
Security		 Retirement income, partial at 62, full at 67 and max at 70, Low income earners receive a higher investment return, some receive death and spousal benefits
 		 Deficit concerns until baby boomers die, retirement age raised or young people vote.SS Benefits are 100% Secure, but their real value depends on economic success.. Solution just time or later retirement but politicians will not act until forced by electorate Increased negative cash flow should add political pressure.
Tax
Expenditures		 Legal deductions and exemptions from income decrease tax collections Employee sponsored health insurance,401K, long-term capital imputed rental income, mortgage interest, earned income tax credits, deferred income from controlled foreign corporations Table 2

Tax payers don't appreciate
 their benefit (entitlements?)

 

 Solution of decreasing them by a third is unacceptable to electorate though this would have increase tax collections $400 billion in 2015 when the deficit was $439 billion.

 

   		       

Tax Expenditure Amounts (billions)


 

cut
where
the
money
 is.

 

 

 

 

 

 

  

 

 

49% go to top income quintile