Comment

5 Horrible, Regressive Ideas Republicans Will Never Let Die

4
Thanos4/27/2015 1:27:13 pm PDT

re: #3 lostlakehiker

The article roundly criticizes Republicans for wanting to means-test social security, which, according to the author of that article, would break a sacred trust.

But right now, social security has some means-testing built in, thanks to a bipartisan consensus that reasonably well-off retired persons ought to get less social security than they otherwise would: social security benefits become taxable as outside income rises. This works out to the equivalent of a nearly 40 percent marginal tax rate on social security benefits, until the sliding scale maxes out at having 85 percent of benefits taxed. So if your income is low, you pay no federal income tax on your social security benefits. But as it grows, each extra dollar causes your tax bill to grow for two reasons: first, because the extra dollar itself is taxed, and second, because another dollar of social-security income becomes subject to taxation.

Republicans and Democrats alike must have supported this, because it became law without much controversy.

This sort of means-testing does not break any sacred pledge. It preserves the program by limiting the net out-of-pocket cost to the federal government of benefits. These would be, but for that claw-back, overly generous to the upper-middle class.

I’d submit that it would be better and much more effective to means test tax breaks than it would be to means test SS.