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To: GraceZ who wrote (21702)	1/18/2005 9:35:44 PM
From: GraceZ	Read Replies (1) \| Respond to of 116555

The other thing that bugs me the most about this debate is that the people who are most for extending the limit on income to go above the $90k where it is now, are those who structure their businesses in such a way that the majority of their incomes are exempt from payroll taxes. Most of my clients are for increasing payroll limits and almost every one of them is a S or LLC corp where they pay themselves a small salary and receive the bulk of their income as a dividend which is exempt from SS/Medicare premiums. It's a classic case of people being for tax increases as long as they think it's not going to hit them personally.

To: GraceZ who wrote (21702)	1/18/2005 9:39:16 PM
From: CalculatedRisk	Read Replies (1) \| Respond to of 116555

If you read my post, I advocate lowering the safety net and increasing the means test; not raising the payroll tax. In fact I think the payroll tax is already too high; it is a punitive tax on labor in America. But the key point is not removing the "financially healthy" from the insurance pool. That, in economic terms, is adverse selection. In English, it is plain crazy. Think of Health Insurance. If you win on the insurance (get out more than you pay in), you have encountered an unwanted event. OTOH, if you lose, you are healthy - my choice. Now remove the healthy from the pool. What happens? The premiums for the "winners" (i.e. the sick) goes through the roof. Is that what we want? It works the same for retirement insurance. If you win, that means you are very poor. If you lose, you did well (my choice again).

To: GraceZ who wrote (21702)	1/18/2005 10:43:33 PM
From: rich evans	Respond to of 116555

Re: Social Security This social security debate in my opinion is stupid. It is a tax and surpluses have been used/ spent for general revenue as with all taxes.. So what does it matter when the costs exceed SS tax revenues. Or when the gov notes with interest are paid and gone . All payments come from the government and the SS accounting is just that : an accounting entry only. The issue is can the government as a whole under its tax revenues and budget costs afford the projected SS costs. Assuming 3.5% growth average, GNP doubles in 20 years. If all fed taxes represent 20% of GNP then we have tax revs of say about 5 trill in 20 years. Can we afford SS as part of this rev/budget? Who knows? Privatising some of SS is just a reduction in taxes with a forced savings coupled with a reduction in future liabilities. It does not matter whether these liabilities are shown on balance sheet as promises of gov notes or are unfunded liabilities based on promises for entitlements.. So the whole thing is stupid politics IMO. The issue is whether you as a younger person want to be dependent on Gov in the future or be more independent with part of it your own nest egg. Rich