How much you lose under Social Security -- socialsecurity.org
---------- Forwarded message ---------- Date: Fri, 30 May 1997 10:59:17 -0700 (PDT) From: Declan McCullagh <declan@well.com> To: fight-censorship-announce@vorlon.mit.edu Subject: How much you lose under Social Security -- socialsecurity.org I'm over at the National Press Club now, just came from a Cato Institute press conference unveiling their socialsecurity.org web site. It lets you calculate your retirement income and compare how much you'd get from the Federal government's Social Security "fund" compared with a private system like a 401(k). And it's fun to play with. Let's say I was born in 1970 and make $30,000 a year (BTW, I wasn't and don't). Assuming I retire at 67 and inflation is 3 percent, Social Security would give me $1,293 a month after I retire. And that's if you assume Social Security won't go belly-up, a hard position to maintain since its own trustees say it's underfunded by 25 to 33 percent. Compare that to a stock fund, which yields so much more: $8,635 a month. I can't think of a better argument to privatize Social Security and move to a system like an IRA or 401(k), a solution the Cato folks have advocated for years. Before the big government folks out there criticize Cato's calculator for being biased, let me point out KPMG Peat Marwick did all calculations and programming. -Declan
At 11:00 AM -0700 5/30/97, Declan McCullagh wrote:
And it's fun to play with. Let's say I was born in 1970 and make $30,000 a year (BTW, I wasn't and don't). Assuming I retire at 67 and inflation is 3 percent, Social Security would give me $1,293 a month after I retire. And that's if you assume Social Security won't go belly-up, a hard position to maintain since its own trustees say it's underfunded by 25 to 33 percent.
I paid into the SS fund from 1969 to 1986. And yet I knew from around 1975 or so that it was a Ponzi scheme, with current intake being used to pay ouflow and with no "trust fund." (The so-called "trust fund" is actually just a bunch of IOUs placed there by the government...the inflow is sent back out to welfare mothers, chiselers, and corporate welfare cases, and an IOU is placed back in the jar. This is *NOT* calculated into the $5.3 trillion national debt. That $5.3 trillion debt amounts to $53,000 owed on average by each of the 100 million or so taxpayers (the other 150 million being children, spouses, nonfilers, welfare recipients, spouses, etc.). Most of these 100 million do not have $53,000 in any form of assets, of course.)
Compare that to a stock fund, which yields so much more: $8,635 a month.
I expect to receive essentially nothing from the SS fund when I become eligible in 22 or more years (they are pushing out the eligibility age...it may be 75 by the time I "retire"). I won't try to dig up numbers right now, but the combination of the national debt, the unfunded liabilities (things the Feds have said they'll pay for but don't have the money in an account for), the SS crisis, the Medicare crisis, and the changing demographics (hint: the baby boomers retire in absolutely massive numbers beginning about 15-20 years from now)...well, the numbers don't look good. I've heard estimates that the tax rate on those still working in 2020 may have to be 80%. That won't fly. So some things are going to break, and break very badly. And the Congressvermin are still attempting to impose an "exit tax" on accumulated assets, so that if I tried to move my assets (remember, assets = property = purchased things, not at all the same thing as "income") to some other country. (There are those I mention this to who don't seem to understand the point, and who mutter about tax evasion. Well, the purpose of moving assets may indeed be avoid confiscatory taxes. But the fact is that it says one's property (jewels, furniture, stocks, etc.) are not one's own to move around as one sees fit, to take with one to a foreign residence. This would make the U.S. like the Soviet Union in this regard.) As we all know, the SS system is just a gigantic Ponzi scheme. Like gambling, the government runs operations it imprisons others for running. I'm not even sure that 60 megatons of disinfectant would handle the cancer that is Washington. --Tim May There's something wrong when I'm a felon under an increasing number of laws. Only one response to the key grabbers is warranted: "Death to Tyrants!" ---------:---------:---------:---------:---------:---------:---------:---- Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay@got.net 408-728-0152 | anonymous networks, digital pseudonyms, zero W.A.S.T.E.: Corralitos, CA | knowledge, reputations, information markets, Higher Power: 2^1398269 | black markets, collapse of governments. "National borders aren't even speed bumps on the information superhighway."
At 12:55 PM -0700 5/30/97, Ray Arachelian wrote:
On Fri, 30 May 1997, Tim May wrote:
And the Congressvermin are still attempting to impose an "exit tax" on accumulated assets, so that if I tried to move my assets (remember, assets = property = purchased things, not at all the same thing as "income") to some other country.
This is really a double tax since if you own assets, you've already paid taxes on those said assets in the form of income tax. If it's an inheritance, that too was taxed, so what the fuck? What's the justification behind this other than exit rape?
The exit tax would of course only be applied to the _gain_ in the value of an asset. As such, it is not double taxation (modulo the inflation issue)., If I bought 1000 shares in a stock at $20 and it was still at $20, no exit tax would be owed. If it had gone up to $30, a 28% tax (as proposed) would be levied on the $10,000 putative gain. This would apply even if the stock had not been sold, which is what the issue really is about. (Imagine having to pay a 28% tax on any putative gain in the value of personal possessions like old records or jewelry moved overseas.) And of course I don't imagine they'll issue _refunds_ for losses! ("Hi, I'm moving to Paris. I'm taking some stocks with me, most of them dogs. Please write out a check for $37,863.91 to cover 28% of the loss.") The issue of course is that the proposed exit tax tries to recapture taxes on income *not yet realized*.
I suppose one way is to take loads of trips and loads of AmEx traveler's checks, then gamble on things with 50% chance of winning, take the winnings and dump'em in accounts outside. Repeat until nothing's left, then exit with very little.
There are of course many such tricks. Many don't even muling your own cash across borders. (And the Empire strikes back by calling many of these things "structuring," for which the laws are very confusing and are so designed to terrorize citizen-units into not trying them.)
As we all know, the SS system is just a gigantic Ponzi scheme. Like gambling, the government runs operations it imprisons others for running.
So let's sue the system. Might fail, but maybe we can get it the fuck out of our income taxes. One less tax to bother with. Since it no longer
Let us know how it turns out. --Tim May There's something wrong when I'm a felon under an increasing number of laws. Only one response to the key grabbers is warranted: "Death to Tyrants!" ---------:---------:---------:---------:---------:---------:---------:---- Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay@got.net 408-728-0152 | anonymous networks, digital pseudonyms, zero W.A.S.T.E.: Corralitos, CA | knowledge, reputations, information markets, Higher Power: 2^1398269 | black markets, collapse of governments. "National borders aren't even speed bumps on the information superhighway."
On Fri, 30 May 1997, Tim May wrote:
And the Congressvermin are still attempting to impose an "exit tax" on accumulated assets, so that if I tried to move my assets (remember, assets = property = purchased things, not at all the same thing as "income") to some other country.
This is really a double tax since if you own assets, you've already paid taxes on those said assets in the form of income tax. If it's an inheritance, that too was taxed, so what the fuck? What's the justification behind this other than exit rape? I suppose one way is to take loads of trips and loads of AmEx traveler's checks, then gamble on things with 50% chance of winning, take the winnings and dump'em in accounts outside. Repeat until nothing's left, then exit with very little.
As we all know, the SS system is just a gigantic Ponzi scheme. Like gambling, the government runs operations it imprisons others for running.
So let's sue the system. Might fail, but maybe we can get it the fuck out of our income taxes. One less tax to bother with. Since it no longer does what it is supposed to, might as well get rid of it. One way is to calculate how much you've put in it, and what is expected you'll receive on retirement. Compare the two, then sue the bastards. (I donno what I've been smoking, but I should get more of it, that's for sure. heheheh)
I'm not even sure that 60 megatons of disinfectant would handle the cancer that is Washington.
Not worth wasting the disinfectant IMHO. I'd say take the money, purchase the favors of AIDS infect whores and throw congress and the senate a really big party. :) Oh, and make sure the condoms have holes. =====================================Kaos=Keraunos=Kybernetos============== .+.^.+.| Ray Arachelian | "Boy meets beer. Boy drinks Beer, |./|\. ..\|/..|sunder@sundernet.com| Boy gets another beer!" |/\|/\ <--*-->| ------------------ | |\/|\/ ../|\..| "A toast to Odin, | For with those which eternal lie, with |.\|/. .+.v.+.|God of screwdrivers"| strange aeons, even death may die. |..... ======================== http://www.sundernet.com =========================
Ray Arachelian wrote:
This is really a double tax since if you own assets, you've already paid taxes on those said assets in the form of income tax. If it's an inheritance, that too was taxed, so what the fuck? What's the justification behind this other than exit rape?
The problem is that capital gains can be used to pay people money and avoid income taxation. Example: suppose that I hire you to design my website. Instead of paying you $10,000, I sell you a security for $1,000 and repurchase it from you next year for $12,000. As a result, you would not have to pay the feds anything if there was no capital gains tax. There are many ways in which this can be done by individuals and companies alike. I would rather use sales tax and repeal both capital gains tax and income tax, than get rid of capital gains tax but not of the income tax. igor
-----BEGIN PGP SIGNED MESSAGE----- At 03:55 PM 5/30/97 -0400, Ray Arachelian wrote:
What's the justification behind this other than exit rape?
Same justification as any tax. "We want the dough." Note they haven't managed to pass a full exit tax yet, however: http://207.87.27.10/forbes/111896/5812044a.htm Forbes - 18 November 1996 "And don't come back" By Robert Lenzner In August 1996 the Republicans pasted some anti-taxpatriate language into the Health Insurance Portability & Accountability Act. This law now subjects expatriates with a net worth of over $500,000 to taxation on their income earned in the U.S. for ten years from the time they renounce their citizenship, no matter where they live or whose flag they salute. But this is a law without teeth. Any clever entrepreneur can live by borrowing against assets rather than paying himself an income. Any good international tax lawyer can move ownership of U.S. assets into a foreign corporation or trust, thus making most taxpatriates' U.S.-sourced income vanish. The latest effort to keep intrepid taxpatriates on the reservation was passed with no fanfare in early October. A little-noticed provision of the Illegal Immigration Reform & Immigrant Responsibility Act of 1996 says, in essence, that Americans can still renounce their citizenship and flee to tax havens like the Bahamas, Ireland and Switzerland. But if they do, they can't necessarily come back to the U.S., not even to visit the grandkids or attend their college reunions. Under the new law, the taxpatriateany expatriate for that mattermust apply for a visa for every visit. The law states that the U.S. Attorney General may prohibit the issuance of a visa to a former U.S. citizen if there are solid grounds to believe that citizenship was renounced in order to avoid taxes. In short, taxpatriates will now be treated as exiles without any visiting rights, just like the illegal immigrants the U.S. wants to cut off. *************** Utterly meaningless in both cases since, as mentioned, you can move your wealth overseas and in the case of the visa requirement, first they have to flag you as an expatriate and even if they do that, you can enter the U.S. via Canada, Mexico, or the Caribbean which are all inside the "US Passport Control Area."
I suppose one way is to take loads of trips and loads of AmEx traveler's checks, then gamble on things with 50% chance of winning, take the winnings and dump'em in accounts outside. Repeat until nothing's left, then exit with very little.
I find that a SWIFT wire transfer is faster, safer, and easier.
So let's sue the system. Might fail, but maybe we can get it the fuck out of our income taxes. One less tax to bother with. Since it no longer does what it is supposed to, might as well get rid of it. One way is to calculate how much you've put in it, and what is expected you'll receive on retirement. Compare the two, then sue the bastards. (I donno what I've been smoking, but I should get more of it, that's for sure. heheheh)
If you can find a judge who doesn't have "a financial interest in the outcome of the proceedings" I suppose you could try but victory seems unlikely in either case. Rather than litigation or detonation why not just try to ignore them. DCF -----BEGIN PGP SIGNATURE----- Version: 5.0 beta Charset: noconv iQCVAwUBM49nIIVO4r4sgSPhAQEYsQP/Wci/WaWwb533khhDPWxo+x1OGChODmh6 xpm/WbyFBR+gUwi29FvgO/4hR4AaNW1T5koh309wT8MqU3LGNT/zWWxOCDR03neN EXvZPFqNGLcU5aHimZpXfE8jaOtlYnNSL4kDRk9NbeCiryOhjgJrvpipZx1qki2X OQJiA9dWnkw= =pvEx -----END PGP SIGNATURE-----
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I'm over at the National Press Club now, just came from a Cato Institute press conference unveiling their socialsecurity.org web site. It lets you calculate your retirement income and compare how much you'd get from the Federal government's Social Security "fund" compared with a private system like a 401(k).
And it's fun to play with. Let's say I was born in 1970 and make $30,000 a year (BTW, I wasn't and don't). Assuming I retire at 67 and inflation is 3 percent, Social Security would give me $1,293 a month after I retire. And that's if you assume Social Security won't go belly-up, a hard position to maintain since its own trustees say it's underfunded by 25 to 33 percent.
Compare that to a stock fund, which yields so much more: $8,635 a month.
I can't think of a better argument to privatize Social Security and move to a system like an IRA or 401(k), a solution the Cato folks have advocated for years.
Remember though that past performance does not guarantee future results. I see no reason why the stockmarket should (or should not) continue to give the spectacular gains that it gave in the past. While having more options generally increases people's well being, we have to expect a substantial amount of people whose investments will be lost in various perturbations that lie ahead. We may expect to the government to be under strong pressure to feed these old folks. What bothers me most is what would happen if the market went bust again as badly as it did in 1929-1934. I believe that it is by far not impossible. Then we'd get stuck in a market downturn, with millions of retured people with few means to support themselves, and the government unable to collect enough money to feed them (which is unconstitutional anyway). [I understand that the optimal allocation of assets in retirement funds should become more and more conservative with age, as people are less and less able to tolerate risk and recoup losses with more earnings, but I am sure that many investors will not pay enough attention to that.] Now, that does not mean that SS should not be privatized (it should), but the picture is not as rosy and not as certain as that stupid Java applet suggests. - Igor. -----BEGIN PGP SIGNATURE----- Version: 2.6.2 iQCVAwUBM49bBMJFmFyXKPzRAQEFTQP7BkaYuKPXliPqvThh/vBye61HHJs9WGOM OzdqnDPehu0tYgbjsl8oLOH9XCh/+loZ+7vFYa1MUVZ4i4PIo8gWxoMDLDZcitnz kns8mR1GMCLj/qTaASliuAn5BC1FFwgBPeekI4MzHt2irx/tfr2nOBM8OPfW+M8A aGdo0PjSv2s= =bEwZ -----END PGP SIGNATURE-----
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While having more options generally increases people's well being, we have to expect a substantial amount of people whose investments will be lost in various perturbations that lie ahead.
We may expect to the government to be under strong pressure to feed these old folks.
What bothers me most is what would happen if the market went bust again as badly as it did in 1929-1934. I believe that it is by far not impossible. Then we'd get stuck in a market downturn, with millions of retured people with few means to support themselves, and the government unable to collect enough money to feed them (which is unconstitutional anyway).
What's the difference? The SSA fund just has IOUs in it now and is being funded from current revenue. For those who do well in the market, don't give them any SSA. For those who invest poorly, use general revenue to keep them off the street. If the market collapses and most lose their shirts how is this any different than the comming debacle. - --Ste5e PGP mail preferred Fingerprint: FE 90 1A 95 9D EA 8D 61 81 2E CC A9 A4 4A FB A9 - --------------------------------------------------------------------- Steve Schear | tel: (702) 658-2654 CEO | fax: (702) 658-2673 First ECache Corporation | 7075 West Gowan Road | Suite 2148 | Las Vegas, NV 89129 | Internet: azur@netcom.com - --------------------------------------------------------------------- I know not what instruments others may use, but as for me, give me Ecache or give me debt. SHOW ME THE DIGITS! -----BEGIN PGP SIGNATURE----- Version: PGP for Personal Privacy 5.0 Charset: noconv iQCVAwUBM6W/MjvMjmxVx4sNAQFszgP9HCBDId4AwdAzsjaL3+0IY85mRMmiLpiJ FP7KHvS+o0EO8NNzjb6Fv0z/8F7eEzqziUwCb6e8SgKssblMxv9zNAC+YLzeut+h /wm/f5mqC2zF942T9hsAP70IHokld7BhIPQL0YSLv+ywEG47rZh98oF9pwholXxK MaO+HHTUrm4= =pP/v -----END PGP SIGNATURE-----
participants (6)
-
Declan McCullagh -
frissell＠panix.com -
ichudov＠algebra.com -
Ray Arachelian -
Steve Schear -
Tim May