Three points: 1) IBD has a known demonstrated prejudice against Social Security 2) One shared by Jed Graham who is in my opinion a hack 3) As evidenced by the fact that he gives no link or title to that CBO Report or any hint about where he derives the $1 trillion figure
Kristing I haven’t said anything mean or disrespectful to you for months. mainly because I haven’t said anything at all to you for months. Because of crap like this.
You give a blind link to an article that itself has no linkage, offer no clue about what aspect of that article you find intriguing, neither challenging or supporting any part of it, and then rather triumphantly give your equivalent of “what do you think of those apples? Well if you actually put some apples on display maybe we could talk. But all I see is the lazy linking to the lazier.
What about Graham’s article do you find compelling and/or backing up the unspecified “saying” you have been making for “years”?
I did note in another conversation with the bears that among Graham’s few specifics was a cite to 2007 SSA numbers to contrast with 2012 CBO ones without noting that one) the 2007 projection by SSA was notably more optimistic than either the 2006 or 2008 ones, a classic case of cherry picking, and two that CBO and SSA have significantly different methodologies that over the last 15 years have produced widely varying dates for Trust Fund depletion even for a given year, at one point the spread being eight years. Thus between Graham’s cherry picking and his apples to oranges SSA to CBO projections we are presented with a veritable fruit market. And while I am at it let me mention the poison fruit introduced with CBOs Alternative Fiscal Alternative, which has CBO almost abandoning its traditional Extended Baseline Scenario, an objective evaluation based on current law, for a speculative measure that relies on CBOs internal judgement of what Congress and the Administration are LIKELY to do.
From what I can tell Alternative Fiscal was introduced as part and parcel of CBOs scoring of ACA that showed that on traditional Extended Baseline measures the ten year savings from Medicare projected to wiping out 75% of Medicare’s ‘unfunded liability over the infinite future’. Suddenly a figure that was projected to be over $40 trillion was shrunk down to something like $12 trillion. But from what I saw rather than risk headlines saying “ACA wipes $30 trillion in future debt off the table” CBO rang in Alternative Fiscal.
Now there are aspects of Alternative Fiscal that are reasonable enough, particularly in relation to AMT and the Doc Fix but until this Administration making those kind of judgements wasn’t CBOs job, nor did they explicitly apply that same rigor to such things as the Ryan Roadmap where the top line number simply accepted his staff’s revenue projections based on nothing at all (to their credit something pointed out by professional staff in passing not once but twice in the body of the score, but not making it to the Press Release).
Anyway in summation Krasting while I understand and even share your strong desire to issue “gotchas” frankly (and to echo Newt) you are grotesquely, bizarrely, and pathetically sucky at it. Try again with an argument and numbers (and no, ones drawn from your personal data series don’t count, not unless you reveal your methodology, something you have refused to do “for years”). Because ‘Jed Graham said in an ideologically driven rag’ doesn’t cut any ice with me.
Regarding Krasting’s Remarks: Yes, what you said, Bruce. We have previously discussed Graham’s piece on the supposed disappearance of 1 $trillion from the SS Trust Fund (TF.) Having carefully considered Graham’s current piece and Krasting’s previous work on the subject of the TF, I can only say, Krasting…..
Don’t blame me for the absence of a link to the CBO report in the IBD article.
Anyone who cares about this topic has already looked at the CBO report. Based on the detailed response above, it’s clear that Webb has.
That being the case, I’m confused by his calling Jed Graham a liar. Jed (and I) are not making stuff up. Read the CBO report. Better yet, wait a few months and get the word from the horse’s mouth. The SSTF will back up what CBO is concluding and what Jed (and I) are saying.
On the business of my own calculations and the methodology I used, you have to remember the endless exchanges we had on this two years ago. I tried very hard to describe each and every variable that I used to come to my conclusion that the lines would cross much earlier than was thought likely at the time.
You just ridiculed me. You would not even consider what I was saying. I gave you my numbers.
I must tell you that that experience was both frustrating and an eye opener. An intelligent, knowledgeable guy would just ignore information that would change the debate on SS. I do hope you remember that exchange. It left quite an impression on me.
Oh, by the way, another of your “friends” Andrew Biggs, has made note of the CBO findings.
Here we have another intelligent and knowledgeable individual who takes the discussion right to the gutter.
I’ll make note of your insult in some future post. It’s a perfect example of how folks like you will do anything to spin things. You complain about Peterson. You’re no better.
Don’t worry, when I do write about it, I will include a link back to you. Some of my 75K readers will, no doubt, be curious what other silly stuff you are saying. Possibly that will improve your site traffic and credibility. I doubt it.
Folks like me? Oh, I presume you mean people who find fault with your SS writings. I was indeed rude in providing the SNL clip. I thought that it would be appropriate to lighten the mood of the exchanges Bruce, Coberly and I have had with you in the past. Ease up. It’s only a joke. NancyO
Nancy O you are probably the one of least offensive people on the webb. You’d probably be better off trying to seperate two pit bulls then coming between these two Bruces. As much as I respect Angry Bears own, Krasting deserves the benifits of being right on SS
I read this yesterday and I believe the article says that the AMT got this guy. His tax as a percentage of AGI is not so unreasonable (except from Mitt’s perspective). He has a lot of deductions that are disallowed by the AMT.
you, like most people, believe enthusiastically everything you read that supports “your” position. you reject contemptuously everything you read that debunks your position. and you have no capacity for logical thought whatsoever. but you call your free associations “logical,” and because you are incapable of logic, that is as close as you will ever get.
i didn’t follow the link because i don’t have time to read all the garbage that comes out about SS. but just in passing, the TRUST FUND may indeed “top out” as you say. IT DOESN’T MATTER. Pace Bruce, it was always DESIGNED TO RUN OUT and will run out (except for the one year’s reserve) about the time the boomers retirement will have been paid for, which was the reason behind the extra surplus that has been allowed to accumulate since 1983.
When the Trust Fund is depleted, SS will go back to full pay as you go as it was always designed to be. If at that time, as we expect, people will be living longer than in the past it will be necessary for them to raise their own payroll tax about 1% if they want to keep the same retirement age and replacement rate… as they should. It would be better for them to start raising the tax one tenth of one percent (combined) per year now in order not to have to face the full 1% at once. But even a 1% increase in the payroll tax at once would not be noticed by most people. But the insane enemies of Social Security would be sure to point at it as a huge tax increase and a staaggering burden on the young… ignoring the fact that meanwhile their incomes will have increased about 30%, so they will have a great deal more money after their tax increase than they have today, AND they will get that “tax” money back when they retire. So it comes down to a choice.. do they keep the right to pay for the right to retire at 62 with enough money to keep up with the standard of living of their times.. or do they “save” themselves about 4 dollars a week so they can have an extra case of beer and keep working for the boss until they can’t do it anymore.
i am pretty contemptuous of the intelligence of most people on the subject of SS. Andy Biggs is an exception. He is very smart. A very clever liar.
I, at least, have refuted your “numbers” a number of times. it gets tedious having to do it again and again because you refuse to learn.
Cursed, it’s kind of you to say that. As to pit bulls, hope yours are well. My ole BB fattened up quite well this winter and is outside, holding herself ready to defend our humble homestead from them evil foreigners from down the street. It’s big houses over yonder and she don’t like the inhabitants’ attitudes. Quite grand, those houses. You can just imagine how grand the owners think they are!
You are right about the dueling Bruces although the conflict becomes truly spectacular when Coberly joins the discussion. As it happens, I tend to agree with Bruce W and Coberly and disagree with Mr. K. My own reading of the Act and other writings by SSA’s chief actuary lead me to think that we can have SS if we are prepared to pay for it.
As it happens, Bruce, Coberly and I have been opposed to the FICA holiday from the beginning. Mr. K also thinks reducing SS’s independent revenue stream will damage it. When he said so the other day, I agreed with him. However, that’s where my agreement began and ended.
Meanwhile, I’ve been wondering where you were and am happy to see you back. TTFN. NancyO
But the article implies that the AGI was much greater. The article does not say what the AMT income was but the rate on the AMT after is paid at a 28% rate less 3500 on the AMT income. It appears that the article uses the non AMT taxable income as the amount and considers all the deductions, even the ones disallowed by the AMT. Note that a similar situation could well have occured with the old phaseout of itemized deductions before the Bush tax cuts as well. However the AGI is a better benchmark to use, for example on the tax history page generated on Turbotax it uses the AGI as the number to calculate the percentage of the tax.
Yes Coberly, you have refuted my numbers. But as of this week my numbers are the CBO numbers. In a few months, the SSTF will be my numbers. Who will you be refuting?
You say it does not matter if the SSTF tops out in 2017 at $2.7T. I say it does.
You say the TF must have a minimum of one-years of benefits. I agree. (anything less would make SS a pawn)
Put these together, and the TF reaches 1 year of benefits in ~2025. This means that anyone 53 (or younger) will have their benefits cut by 25%. Do you think that is fair? For the next 13 years there is a party for a small segment of the population and then boom? What kind of plan is that?
I can’t believe you don’t find that significant. How old are you?
You did not take heed when I warned that things were changing at SS. Now I will give you another projection for the future:
There is a 0.00% chance of a repair of SS that results in additional PR taxes. Go to plan B. The Coberly plan is D.O.A. b
you don’t seem to recognize when your numbers have been refuted. as it happens CBO’s numbers are the same as mine. SS can continue unchanged with a tax increase of one half of one tenth of one percent per year. that’s forty cents per week in today’s terms. you may think your numbers are the same as CBO’s but since you don’t know what the numbers mean, i can only guess you mean they use 0,1,2,3… just like you do.
The one year reserve that the Trust Fund is targeted to hold is entirely arbitrary… that would give them about a ten year cushion to make changes if anything is really needing to be changed. The reaching that level in about 2025 was anticipated by the Northwest Plan. which then goes on to show that a one tenth percent, each, rise in the tax that year… and as it happens for the next ten years will hold the Trust Fund at or near the one year’s reserve. NO “bankruptcy.” No crisis, no huge burden. Just a number for the illiterate to scare themselves silly with.
The benefit “cut” that would be needed in 2036, not 2025, if “nothing is done” would leave the beneficiaries about 20% better off in real terms than they are today, since that is a benefit cut from benefits that will be worth about 140% of today’s, in keeping with rising incomes, which are the basis of the payroll tax and benefit schedule. which is apparently far beyond your understanding.
no party. no boom. just ignorant old Krasting scaring himself with big numbers.
i didn’t take heed ofyour warnings because they were wrong… ignorant. they still are.
a forty cent tax increase is not a big deal. if the politicians can’t come up with that, it’s because they want to destroy SS. THAT is a big deal. They have fooled smarter people than you.
Right run, AMT should not be affecting people in middle-class income levels. Lyle interpreted the available information like I did, and it implies that this person was nowhere near the 1 percent crowd. Speaking of which, note how the AMT originally targeted only extremely high incomes, but today it’s not like Romney et al need to worry their little heads about that 28 percent rate.
Written a long time ago and I believe still relevant:
“In August 1969 as he was preparing the next year’s budget Barr warned that the country faced a taxpayers’ revolt. He explained, according to the Washington Post, that in 1967 there were a total of 155 (rich in income) individuals with incomes over $200,000 (this is not rich today) who did not pay any federal income taxes; twenty of them were millionaires. These individuals successfully used all tax loopholes available to legally evade paying taxes.” http://hnn.us/articles/11819.html
During Nixon’s era a 50% ceiling was established minimizing the amount of income which could be set aside and escaping all taxes through donations etc.
The present AMT started out in 1978 as an “add on” to a tax on Capital Gains that came into being earlier in the decade. In 1982 the original tax was dropped. It was meant to tax high income tax payers who were avoiding any payment of income tax and was the subject of a loud outcry when it was discovered that ~150 high income taxpayers avoided paying any income tax. The Economic Recovery Act of 1981 indexed Federal Income Tax but did nothing to the AMT. In 2001, the EGTRRA cut regular income tax rates and made minor changes to the AMT. The simple mechanics of the AMT has a taxpayers calculate taxes both ways and if the liability is greater utilizing the AMT, the taxpayer must pay a variance or a surcharge.
What is insidious in this proposal is the term used by President Bush to describe wealthy as being $90,000. The implication here is any person making $90,000/year is high income, should forgo substantial portions of Social Security benefits, and still contribute a substantial percentage of their income to Social Security. If high income was really $90,000/year, the concept is progressive; but, high income is not $90,000/year and those above this in annual income escape from having to contribute more to the solvency of Social Security. This plan still implies an income tax increase.
The AMT still looms in the not so distant future. President Bush has made no provision to extend the additional income exemptions beyond 2005. Who will pay the AMT in 2005? 17% of those taxpayers making between $75 and $100,000/yr, 33% of those making between $100 and $200,000/yr, and 78% of those making between $200 and $500,000/yr. By 2010 Brooking Institute also estimated the percentage of those making $75,000/yr impacted by the AMT will rise to 52%. These income brackets are not the wealthy and are reflective of middle and upper middle class. In the late sixties, the AMT was enacted to capture taxpayers and businesses who otherwise would have paid no taxes whatsoever. It has been modified several times over the last 40 years with the exception of indexing for inflation for individual taxpayers. It does need to be addressed for indexing purposes and returned to its original intent to […]
Written a long time ago and still relevat I believe:
“In August 1969 as he was preparing the next year’s budget Barr warned that the country faced a taxpayers’ revolt. He explained, according to the Washington Post, that in 1967 there were a total of 155 (rich in income) individuals with incomes over $200,000 (this is not rich today) who did not pay any federal income taxes; twenty of them were millionaires. These individuals successfully used all tax loopholes available to legally evade paying taxes.” http://hnn.us/articles/11819.html
During Nixon’s era a 50% ceiling was established minimizing the amount of income which could be set aside and escaping all taxes through donations etc. The present AMT started out in 1978 as an “add on” to a tax on Capital Gains that came into being earlier in the decade. In 1982 the original tax was dropped. It was meant to tax high income tax payers who were avoiding any payment of income tax and was the subject of a loud outcry when it was discovered that ~150 high income taxpayers avoided paying any income tax. The Economic Recovery Act of 1981 indexed Federal Income Tax but did nothing to the AMT. In 2001, the EGTRRA cut regular income tax rates and made minor changes to the AMT. The simple mechanics of the AMT has a taxpayers calculate taxes both ways and if the liability is greater utilizing the AMT, the taxpayer must pay a variance or a surcharge.
What is insidious in this proposal is the term used by President Bush to describe wealthy as being $90,000. The implication here is any person making $90,000/year is high income, should forgo substantial portions of Social Security benefits, and still contribute a substantial percentage of their income to Social Security. If high income was really $90,000/year, the concept is progressive; but, high income is not $90,000/year and those above this in annual income escape from having to contribute more to the solvency of Social Security. This plan still implies an income tax increase. The AMT still looms in the not so distant future. President Bush has made no provision to extend the additional income exemptions beyond 2005. Who will pay the AMT in 2005? 17% of those taxpayers making between $75 and $100,000/yr, 33% of those making between $100 and $200,000/yr, and 78% of those making between $200 and $500,000/yr. By 2010 Brooking Institute also estimated the percentage of those making $75,000/yr impacted by the AMT will rise to 52%. These income brackets are not the wealthy and are reflective of middle and upper middle class. In the late sixties, the AMT was enacted to capture taxpayers and businesses who otherwise would have paid no taxes whatsoever. It has been modified several times over the last 40 years with the exception of indexing for inflation for individual taxpayers. It does need to be addressed for indexing purposes and returned to its original intent to capture those who will escape paying income taxes. The CBO […]
Krasting the problem is that CBO and SSA numbers are incompatible with for example dates of TF Exhaustion differing by 3-7 years.
Saying that “as of this week” you are using CBO while soon you will be using “SSTF”, apparently on some touching faith that after all they are both “official” is incoherent. You built your model with a departure point of SSA Intermediate Cost, varied THOSE numbers according to data assumptions that you won’t reveal in detail, came up with a set of conclusions. Now you are claiming validation based on a different agency’s numbers which are coming from a DIFFERENT starting point.
That your model as derived from SSA and modified via your assumptions may in some respect intersect CBOs model which uses a different methodology (we assume since you refuse to reveal yours) is almost meaningless, for all we know FROM THE DATA YOU HAVE PRESENTED is that we may have a case of a Blind Pig Escaped from an SSA Pen Finding CBO’s Acorn.
Not to mention that CBO shows OAS balances increasing to $3 tn by 2021. The only way you get the balances topping out at $2.7 tn in 2017 is by CBO slipping in a change in current law as it relates to DI. This particular change is probable enough,but it is not the only possible policy response and is in any case a departure from Extended Baseline to a new partial Alternative Fiscal limited to DI alone.
But these details never seem to cross your mental horizon, instead you flit from SSA data table to CBO data table, and without actually pointing to the data points you figure validate your claims (and so requiring me to track them down) simply make a victory lap and demand apologies.
Well that is not happening, not until or unless you present your arguments with more rigor and transparency than you have shown to date. Because “See!! A ripe cherry!” is not a cogent and convincing argument.
i am not sure i understood much of this. especially the part about SS which seems wrongheaded to me. SS is an insurance payment. it is capped to avoid having “the rich” pay for the poor. that is a very very good idea.
as for the AMT, it seems to me that if the fellow being discussed here was able to reduce his taxable income from 70k to 10 k by “deductions” there is probably good reason to hit him with the AMT.
even in the case in which, say, he bought an expensive house when he had a big income, and now has a small income but a big mortgage, i would look with a fishy eye at those “charitable deductions” in other words, someone is playing a game here and the IRS caught him and so now he is poor mouthing and complaining about the unfairness of it all. i’m not buying it.
Coberly clearly this person did something unusual but I would not try to guess whether the IRS “caught him” doing something illegit. Maybe he pulled tens of thousands out of his savings and generously gave it to a food bank, then tried to deduct all that charitable giving. Or maybe he tried something shady. The broader point is that the AMT was supposed to “catch” the really big fish trying to get away with something, not little or even medium-sized ones.
on the other hand, i almost always know when i don’t get it. and do try to write sentences that have some ‘truth value’ (that’s a logical concept, not a moral one.)
i tried to say i didn’t know what he did, but found it fishy. what i know i don’t agree with is “It’s not fair! It’s only supposed to catch the big fish!”
Yes, right to the core. The AMT was never meant to catch a $70,000 fish which in 1978 would have been far lower in income. This is a joke on us when so many taxpayers and corporation walk away tax free or get tax help from the Gov. Sounds “No”rquistrian in a sense.No income tax increase for the rich in income and tax help for those who are in little need of it.
Krasting is more clever er disingenuous than that.
CBO newest projection does have OAS going to $3 tn in 2021. But it also shows DI running a $248 bn deficit based on the current scheduled benefit. Now under Current Law, which is CBOs brief in presenting their Extended Baseline, DI’s Trist Fund Exhaustion, projected very soon, would require something to address the gap between income and scheduled benefits or just have unilateral decreases in benefits to the Disabled. Now there are a number of ways to address the DI shortfall, and one forwarded by the Dale, Bruce Arne NW Plan would have a one or two year increase in FICA amounting to 0.3% of payroll devoted to DI alone. Another approach would be to punt the DI shortfall down the road and simply assume a reallocation of combined OASDI FICA to synchronize OAS and DI shortfalls. Which is likely enough bit neither current law nor optimal policy. But if you DO assume the rebalancing without revue enhancements, as CBO does in footnotes, boom you get right back to that $2.7 trillion 2017 number.
Not that Krasting actually pointed to those departures from current law or allowed that they were purely theoretical, instead he just implicitly subsumed them into his model while demanding that Dale and I respond to his unstated assumptions.
It is not that Krasting is too lazy to do the work, because he carefully stays within his own model and assumptions, he just assumes that no one will back check his claims and highlight the hidden work. Which mostly has not served him well at AB but occasionally snows the folks at his normal hangout at Zero Hedge.
just to clarify: CBO does say the OASI trust fund will reach $3 trillion.
However, this does not contradict the article, which clearly notes that the $1 trillion difference between CBO’s 2012 estimate and SSA’s 2011 estimate reflects the combined resources of the OASI trust fund and the DI trust fund.
Combining the 2 trust funds provides an apples-to-apples comparison with SSA data.
This reflects SSA’s implicit assumption that OASI trust fund bonds would be used to cover the hole in the DI program once the DI trust fund is exhausted.
just to clarify: CBO does say the OASI trust fund will reach $3 trillion.
However, this does not contradict the article, which clearly notes that the $1 trillion difference between CBO’s 2012 estimate and SSA’s 2011 estimate reflects the combined resources of the OASI trust fund and the DI trust fund.
Combining the 2 trust funds provides an apples-to-apples comparison with SSA data.
This reflects SSA’s implicit assumption that OASI trust fund bonds would be used to cover the hole in the DI program once the DI trust fund is exhausted.
I’m curious on your thoughts re this on SS:
http://news.investors.com/Article.aspx?id=599776&p=1&ibdbot=1
I’ve been saying this for years now. I wonder if it changes things for the Coberly and Webbs of the world.
Bruce Krasting
This is Why NC Was Down Much of Friday – 02/04/2012 – Yves Smith (graph – the unusual traffic spike starting at 6 AM looks like a DDoS attack)
Three points:
1) IBD has a known demonstrated prejudice against Social Security
2) One shared by Jed Graham who is in my opinion a hack
3) As evidenced by the fact that he gives no link or title to that CBO Report or any hint about where he derives the $1 trillion figure
Kristing I haven’t said anything mean or disrespectful to you for months. mainly because I haven’t said anything at all to you for months. Because of crap like this.
You give a blind link to an article that itself has no linkage, offer no clue about what aspect of that article you find intriguing, neither challenging or supporting any part of it, and then rather triumphantly give your equivalent of “what do you think of those apples? Well if you actually put some apples on display maybe we could talk. But all I see is the lazy linking to the lazier.
What about Graham’s article do you find compelling and/or backing up the unspecified “saying” you have been making for “years”?
I did note in another conversation with the bears that among Graham’s few specifics was a cite to 2007 SSA numbers to contrast with 2012 CBO ones without noting that one) the 2007 projection by SSA was notably more optimistic than either the 2006 or 2008 ones, a classic case of cherry picking, and two that CBO and SSA have significantly different methodologies that over the last 15 years have produced widely varying dates for Trust Fund depletion even for a given year, at one point the spread being eight years. Thus between Graham’s cherry picking and his apples to oranges SSA to CBO projections we are presented with a veritable fruit market. And while I am at it let me mention the poison fruit introduced with CBOs Alternative Fiscal Alternative, which has CBO almost abandoning its traditional Extended Baseline Scenario, an objective evaluation based on current law, for a speculative measure that relies on CBOs internal judgement of what Congress and the Administration are LIKELY to do.
From what I can tell Alternative Fiscal was introduced as part and parcel of CBOs scoring of ACA that showed that on traditional Extended Baseline measures the ten year savings from Medicare projected to wiping out 75% of Medicare’s ‘unfunded liability over the infinite future’. Suddenly a figure that was projected to be over $40 trillion was shrunk down to something like $12 trillion. But from what I saw rather than risk headlines saying “ACA wipes $30 trillion in future debt off the table” CBO rang in Alternative Fiscal.
Now there are aspects of Alternative Fiscal that are reasonable enough, particularly in relation to AMT and the Doc Fix but until this Administration making those kind of judgements wasn’t CBOs job, nor did they explicitly apply that same rigor to such things as the Ryan Roadmap where the top line number simply accepted his staff’s revenue projections based on nothing at all (to their credit something pointed out by professional staff in passing not once but twice in the body of the score, but not making it to the Press Release).
Anyway in summation Krasting while I understand and even share your strong desire to issue “gotchas” frankly (and to echo Newt) you are grotesquely, bizarrely, and pathetically sucky at it. Try again with an argument and numbers (and no, ones drawn from your personal data series don’t count, not unless you reveal your methodology, something you have refused to do “for years”). Because ‘Jed Graham said in an ideologically driven rag’ doesn’t cut any ice with me.
Who has read the article in todays NY Times on a guy who pays a tax of 102% of taxable income?
The guy has a taxable income of $11,044 and reportedly pays a federal tax of $10,315.
When I go to the tax table the federal income tax on a $11,044 is $1,103 –married— or $1,229 –single.
Can anyone explain how he pays a tax or $10,315. It does not compute.
Regarding Krasting’s Remarks: Yes, what you said, Bruce. We have previously discussed Graham’s piece on the supposed disappearance of 1 $trillion from the SS Trust Fund (TF.) Having carefully considered Graham’s current piece and Krasting’s previous work on the subject of the TF, I can only say, Krasting…..
http://www.youtube.com/watch?v=k80nW6AOhTs
Best, NancyO
Don’t blame me for the absence of a link to the CBO report in the IBD article.
Anyone who cares about this topic has already looked at the CBO report. Based on the detailed response above, it’s clear that Webb has.
That being the case, I’m confused by his calling Jed Graham a liar. Jed (and I) are not making stuff up. Read the CBO report. Better yet, wait a few months and get the word from the horse’s mouth. The SSTF will back up what CBO is concluding and what Jed (and I) are saying.
On the business of my own calculations and the methodology I used, you have to remember the endless exchanges we had on this two years ago. I tried very hard to describe each and every variable that I used to come to my conclusion that the lines would cross much earlier than was thought likely at the time.
You just ridiculed me. You would not even consider what I was saying. I gave you my numbers.
I must tell you that that experience was both frustrating and an eye opener. An intelligent, knowledgeable guy would just ignore information that would change the debate on SS. I do hope you remember that exchange. It left quite an impression on me.
Oh, by the way, another of your “friends” Andrew Biggs, has made note of the CBO findings.
http://andrewgbiggs.blogspot.com/2012/02/trust-fund-falling-short.html
My thoughts on the CBO report and the implications to SS: (I have a link to the CBO report)
http://brucekrasting.blogspot.com/2012/01/cbo-report-omg.html
Nancy likens me to an “Ignorant Slut”.
Here we have another intelligent and knowledgeable individual who takes the discussion right to the gutter.
I’ll make note of your insult in some future post. It’s a perfect example of how folks like you will do anything to spin things. You complain about Peterson. You’re no better.
Don’t worry, when I do write about it, I will include a link back to you. Some of my 75K readers will, no doubt, be curious what other silly stuff you are saying. Possibly that will improve your site traffic and credibility. I doubt it.
Folks like me? Oh, I presume you mean people who find fault with your SS writings. I was indeed rude in providing the SNL clip. I thought that it would be appropriate to lighten the mood of the exchanges Bruce, Coberly and I have had with you in the past. Ease up. It’s only a joke. NancyO
Yes, folks like you. It was you whose knee jerk response was to toss out a slur. (a nasty one at that)
More than two years ago I forecast that the SSTF would top out in 2017, and when it did, the maximum in the fund would be ~2.7T.
You may not like what I write, but you should admit that I was right, no?
Nancy O you are probably the one of least offensive people on the webb. You’d probably be better off trying to seperate two pit bulls then coming between these two Bruces. As much as I respect Angry Bears own, Krasting deserves the benifits of being right on SS
I read this yesterday and I believe the article says that the AMT got this guy. His tax as a percentage of AGI is not so unreasonable (except from Mitt’s perspective). He has a lot of deductions that are disallowed by the AMT.
Krasting
you, like most people, believe enthusiastically everything you read that supports “your” position. you reject contemptuously everything you read that debunks your position. and you have no capacity for logical thought whatsoever. but you call your free associations “logical,” and because you are incapable of logic, that is as close as you will ever get.
i didn’t follow the link because i don’t have time to read all the garbage that comes out about SS. but just in passing, the TRUST FUND may indeed “top out” as you say. IT DOESN’T MATTER. Pace Bruce, it was always DESIGNED TO RUN OUT and will run out (except for the one year’s reserve) about the time the boomers retirement will have been paid for, which was the reason behind the extra surplus that has been allowed to accumulate since 1983.
When the Trust Fund is depleted, SS will go back to full pay as you go as it was always designed to be. If at that time, as we expect, people will be living longer than in the past it will be necessary for them to raise their own payroll tax about 1% if they want to keep the same retirement age and replacement rate… as they should. It would be better for them to start raising the tax one tenth of one percent (combined) per year now in order not to have to face the full 1% at once. But even a 1% increase in the payroll tax at once would not be noticed by most people. But the insane enemies of Social Security would be sure to point at it as a huge tax increase and a staaggering burden on the young… ignoring the fact that meanwhile their incomes will have increased about 30%, so they will have a great deal more money after their tax increase than they have today, AND they will get that “tax” money back when they retire. So it comes down to a choice.. do they keep the right to pay for the right to retire at 62 with enough money to keep up with the standard of living of their times.. or do they “save” themselves about 4 dollars a week so they can have an extra case of beer and keep working for the boss until they can’t do it anymore.
i am pretty contemptuous of the intelligence of most people on the subject of SS. Andy Biggs is an exception. He is very smart. A very clever liar.
I, at least, have refuted your “numbers” a number of times. it gets tedious having to do it again and again because you refuse to learn.
If he has a lot of deductions that are not allowed than his taxable income is more than $11,000.
To pay a federal tax of $10, 315 takes a taxable income of $72,250 if filing joint
But his adjusted gross income was only $69,702.
To get this the IRS has to reject his personal exemptions, mortgage payments, chairtable contributions and state and property taxes.
It still does not compute.
cursed
krasting has never been right about SS. never.
spencer
as for not computing 10,315 is not 102% of 11,044.
this is another example of arguing in the absence of all the facts. not that that should inhibit you from knowing the truth.
Cursed, it’s kind of you to say that. As to pit bulls, hope yours are well. My ole BB fattened up quite well this winter and is outside, holding herself ready to defend our humble homestead from them evil foreigners from down the street. It’s big houses over yonder and she don’t like the inhabitants’ attitudes. Quite grand, those houses. You can just imagine how grand the owners think they are!
You are right about the dueling Bruces although the conflict becomes truly spectacular when Coberly joins the discussion. As it happens, I tend to agree with Bruce W and Coberly and disagree with Mr. K. My own reading of the Act and other writings by SSA’s chief actuary lead me to think that we can have SS if we are prepared to pay for it.
As it happens, Bruce, Coberly and I have been opposed to the FICA holiday from the beginning. Mr. K also thinks reducing SS’s independent revenue stream will damage it. When he said so the other day, I agreed with him. However, that’s where my agreement began and ended.
Meanwhile, I’ve been wondering where you were and am happy to see you back. TTFN. NancyO
But the article implies that the AGI was much greater. The article does not say what the AMT income was but the rate on the AMT after is paid at a 28% rate less 3500 on the AMT income. It appears that the article uses the non AMT taxable income as the amount and considers all the deductions, even the ones disallowed by the AMT. Note that a similar situation could well have occured with the old phaseout of itemized deductions before the Bush tax cuts as well.
However the AGI is a better benchmark to use, for example on the tax history page generated on Turbotax it uses the AGI as the number to calculate the percentage of the tax.
Coberly, you should read the article.
They add his New York city and state tax to his federal tax to get the 102% with the federal tax figure.
I was just working with the federal portion becaue I had access to those tax tables.
I ask if anyone could explain this, knowing I did not have all the facts.
Maybe you should do the same.
Yes Coberly, you have refuted my numbers. But as of this week my numbers are the CBO numbers. In a few months, the SSTF will be my numbers. Who will you be refuting?
You say it does not matter if the SSTF tops out in 2017 at $2.7T. I say it does.
You say the TF must have a minimum of one-years of benefits. I agree. (anything less would make SS a pawn)
Put these together, and the TF reaches 1 year of benefits in ~2025. This means that anyone 53 (or younger) will have their benefits cut by 25%. Do you think that is fair? For the next 13 years there is a party for a small segment of the population and then boom? What kind of plan is that?
I can’t believe you don’t find that significant. How old are you?
You did not take heed when I warned that things were changing at SS. Now I will give you another projection for the future:
There is a 0.00% chance of a repair of SS that results in additional PR taxes. Go to plan B. The Coberly plan is D.O.A.
b
Krasting
you don’t seem to recognize when your numbers have been refuted. as it happens CBO’s numbers are the same as mine. SS can continue unchanged with a tax increase of one half of one tenth of one percent per year. that’s forty cents per week in today’s terms. you may think your numbers are the same as CBO’s but since you don’t know what the numbers mean, i can only guess you mean they use 0,1,2,3… just like you do.
The one year reserve that the Trust Fund is targeted to hold is entirely arbitrary… that would give them about a ten year cushion to make changes if anything is really needing to be changed. The reaching that level in about 2025 was anticipated by the Northwest Plan. which then goes on to show that a one tenth percent, each, rise in the tax that year… and as it happens for the next ten years will hold the Trust Fund at or near the one year’s reserve. NO “bankruptcy.” No crisis, no huge burden. Just a number for the illiterate to scare themselves silly with.
The benefit “cut” that would be needed in 2036, not 2025, if “nothing is done” would leave the beneficiaries about 20% better off in real terms than they are today, since that is a benefit cut from benefits that will be worth about 140% of today’s, in keeping with rising incomes, which are the basis of the payroll tax and benefit schedule. which is apparently far beyond your understanding.
no party. no boom. just ignorant old Krasting scaring himself with big numbers.
i didn’t take heed ofyour warnings because they were wrong… ignorant. they still are.
a forty cent tax increase is not a big deal. if the politicians can’t come up with that, it’s because they want to destroy SS. THAT is a big deal. They have fooled smarter people than you.
spencer
not on your life. i got better things to do than track down every bogus story that the demagogues come up with.
but hey, nothing better to do on slow night at the pub than to throw out some gummint horror story you can argue until dawn or the beer runs out.
Spencer:
It sounds like the AMT
Ahh Bruce:
Put more people back to work and move the Participation Rate upwards from 63.7%
PJR:
I agree. That it snagged this low an income is not what the AMT was meant for today.
Right run, AMT should not be affecting people in middle-class income levels. Lyle interpreted the available information like I did, and it implies that this person was nowhere near the 1 percent crowd. Speaking of which, note how the AMT originally targeted only extremely high incomes, but today it’s not like Romney et al need to worry their little heads about that 28 percent rate.
Written a long time ago and I believe still relevant:
“In August 1969 as he was preparing the next year’s budget Barr warned that the country faced a taxpayers’ revolt. He explained, according to the Washington Post, that in 1967 there were a total of 155 (rich in income) individuals with incomes over $200,000 (this is not rich today) who did not pay any federal income taxes; twenty of them were millionaires. These individuals successfully used all tax loopholes available to legally evade paying taxes.” http://hnn.us/articles/11819.html
During Nixon’s era a 50% ceiling was established minimizing the amount of income which could be set aside and escaping all taxes through donations etc.
The present AMT started out in 1978 as an “add on” to a tax on Capital Gains that came into being earlier in the decade. In 1982 the original tax was dropped. It was meant to tax high income tax payers who were avoiding any payment of income tax and was the subject of a loud outcry when it was discovered that ~150 high income taxpayers avoided paying any income tax. The Economic Recovery Act of 1981 indexed Federal Income Tax but did nothing to the AMT. In 2001, the EGTRRA cut regular income tax rates and made minor changes to the AMT. The simple mechanics of the AMT has a taxpayers calculate taxes both ways and if the liability is greater utilizing the AMT, the taxpayer must pay a variance or a surcharge.
What is insidious in this proposal is the term used by President Bush to describe wealthy as being $90,000. The implication here is any person making $90,000/year is high income, should forgo substantial portions of Social Security benefits, and still contribute a substantial percentage of their income to Social Security. If high income was really $90,000/year, the concept is progressive; but, high income is not $90,000/year and those above this in annual income escape from having to contribute more to the solvency of Social Security. This plan still implies an income tax increase.
The AMT still looms in the not so distant future. President Bush has made no provision to extend the additional income exemptions beyond 2005. Who will pay the AMT in 2005? 17% of those taxpayers making between $75 and $100,000/yr, 33% of those making between $100 and $200,000/yr, and 78% of those making between $200 and $500,000/yr. By 2010 Brooking Institute also estimated the percentage of those making $75,000/yr impacted by the AMT will rise to 52%. These income brackets are not the wealthy and are reflective of middle and upper middle class. In the late sixties, the AMT was enacted to capture taxpayers and businesses who otherwise would have paid no taxes whatsoever. It has been modified several times over the last 40 years with the exception of indexing for inflation for individual taxpayers. It does need to be addressed for indexing purposes and returned to its original intent to […]
PJR:
Written a long time ago and still relevat I believe:
“In August 1969 as he was preparing the next year’s budget Barr warned that the country faced a taxpayers’ revolt. He explained, according to the Washington Post, that in 1967 there were a total of 155 (rich in income) individuals with incomes over $200,000 (this is not rich today) who did not pay any federal income taxes; twenty of them were millionaires. These individuals successfully used all tax loopholes available to legally evade paying taxes.” http://hnn.us/articles/11819.html
During Nixon’s era a 50% ceiling was established minimizing the amount of income which could be set aside and escaping all taxes through donations etc.
The present AMT started out in 1978 as an “add on” to a tax on Capital Gains that came into being earlier in the decade. In 1982 the original tax was dropped. It was meant to tax high income tax payers who were avoiding any payment of income tax and was the subject of a loud outcry when it was discovered that ~150 high income taxpayers avoided paying any income tax. The Economic Recovery Act of 1981 indexed Federal Income Tax but did nothing to the AMT. In 2001, the EGTRRA cut regular income tax rates and made minor changes to the AMT. The simple mechanics of the AMT has a taxpayers calculate taxes both ways and if the liability is greater utilizing the AMT, the taxpayer must pay a variance or a surcharge.
What is insidious in this proposal is the term used by President Bush to describe wealthy as being $90,000. The implication here is any person making $90,000/year is high income, should forgo substantial portions of Social Security benefits, and still contribute a substantial percentage of their income to Social Security. If high income was really $90,000/year, the concept is progressive; but, high income is not $90,000/year and those above this in annual income escape from having to contribute more to the solvency of Social Security. This plan still implies an income tax increase.
The AMT still looms in the not so distant future. President Bush has made no provision to extend the additional income exemptions beyond 2005. Who will pay the AMT in 2005? 17% of those taxpayers making between $75 and $100,000/yr, 33% of those making between $100 and $200,000/yr, and 78% of those making between $200 and $500,000/yr. By 2010 Brooking Institute also estimated the percentage of those making $75,000/yr impacted by the AMT will rise to 52%. These income brackets are not the wealthy and are reflective of middle and upper middle class. In the late sixties, the AMT was enacted to capture taxpayers and businesses who otherwise would have paid no taxes whatsoever. It has been modified several times over the last 40 years with the exception of indexing for inflation for individual taxpayers. It does need to be addressed for indexing purposes and returned to its original intent to capture those who will escape paying income taxes. The CBO […]
Krasting the problem is that CBO and SSA numbers are incompatible with for example dates of TF Exhaustion differing by 3-7 years.
Saying that “as of this week” you are using CBO while soon you will be using “SSTF”, apparently on some touching faith that after all they are both “official” is incoherent. You built your model with a departure point of SSA Intermediate Cost, varied THOSE numbers according to data assumptions that you won’t reveal in detail, came up with a set of conclusions. Now you are claiming validation based on a different agency’s numbers which are coming from a DIFFERENT starting point.
That your model as derived from SSA and modified via your assumptions may in some respect intersect CBOs model which uses a different methodology (we assume since you refuse to reveal yours) is almost meaningless, for all we know FROM THE DATA YOU HAVE PRESENTED is that we may have a case of a Blind Pig Escaped from an SSA Pen Finding CBO’s Acorn.
Not to mention that CBO shows OAS balances increasing to $3 tn by 2021. The only way you get the balances topping out at $2.7 tn in 2017 is by CBO slipping in a change in current law as it relates to DI. This particular change is probable enough,but it is not the only possible policy response and is in any case a departure from Extended Baseline to a new partial Alternative Fiscal limited to DI alone.
But these details never seem to cross your mental horizon, instead you flit from SSA data table to CBO data table, and without actually pointing to the data points you figure validate your claims (and so requiring me to track them down) simply make a victory lap and demand apologies.
Well that is not happening, not until or unless you present your arguments with more rigor and transparency than you have shown to date. Because “See!! A ripe cherry!” is not a cogent and convincing argument.
run
i am not sure i understood much of this. especially the part about SS which seems wrongheaded to me. SS is an insurance payment. it is capped to avoid having “the rich” pay for the poor. that is a very very good idea.
as for the AMT, it seems to me that if the fellow being discussed here was able to reduce his taxable income from 70k to 10 k by “deductions” there is probably good reason to hit him with the AMT.
even in the case in which, say, he bought an expensive house when he had a big income, and now has a small income but a big mortgage, i would look with a fishy eye at those “charitable deductions” in other words, someone is playing a game here and the IRS caught him and so now he is poor mouthing and complaining about the unfairness of it all. i’m not buying it.
When Jed Graham says “CBO expects the trust fund to peak in 2018 and decline to $2.7 trillion in 2022” he is mistaken. The CBO report, http://www.cbo.gov/ftpdocs/126xx/doc12699/01-31-2012_Outlook.pdf, Table D-1 says is will peak at $3.0T in 2021.
How can you have any kind of discussion with that kind of error at the basis.
coberly:
as usual you don’t get it.
Coberly clearly this person did something unusual but I would not try to guess whether the IRS “caught him” doing something illegit. Maybe he pulled tens of thousands out of his savings and generously gave it to a food bank, then tried to deduct all that charitable giving. Or maybe he tried something shady. The broader point is that the AMT was supposed to “catch” the really big fish trying to get away with something, not little or even medium-sized ones.
run
i believe that’s what i said.
on the other hand, i almost always know when i don’t get it. and do try to write sentences that have some ‘truth value’ (that’s a logical concept, not a moral one.)
pjr
i tried to say i didn’t know what he did, but found it fishy. what i know i don’t agree with is “It’s not fair! It’s only supposed to catch the big fish!”
PJR:
Yes, right to the core. The AMT was never meant to catch a $70,000 fish which in 1978 would have been far lower in income. This is a joke on us when so many taxpayers and corporation walk away tax free or get tax help from the Gov. Sounds “No”rquistrian in a sense.No income tax increase for the rich in income and tax help for those who are in little need of it.
Krasting is more clever er disingenuous than that.
CBO newest projection does have OAS going to $3 tn in 2021. But it also shows DI running a $248 bn deficit based on the current scheduled benefit. Now under Current Law, which is CBOs brief in presenting their Extended Baseline, DI’s Trist Fund Exhaustion, projected very soon, would require something to address the gap between income and scheduled benefits or just have unilateral decreases in benefits to the Disabled. Now there are a number of ways to address the DI shortfall, and one forwarded by the Dale, Bruce Arne NW Plan would have a one or two year increase in FICA amounting to 0.3% of payroll devoted to DI alone. Another approach would be to punt the DI shortfall down the road and simply assume a reallocation of combined OASDI FICA to synchronize OAS and DI shortfalls. Which is likely enough bit neither current law nor optimal policy. But if you DO assume the rebalancing without revue enhancements, as CBO does in footnotes, boom you get right back to that $2.7 trillion 2017 number.
Not that Krasting actually pointed to those departures from current law or allowed that they were purely theoretical, instead he just implicitly subsumed them into his model while demanding that Dale and I respond to his unstated assumptions.
It is not that Krasting is too lazy to do the work, because he carefully stays within his own model and assumptions, he just assumes that no one will back check his claims and highlight the hidden work. Which mostly has not served him well at AB but occasionally snows the folks at his normal hangout at Zero Hedge.
just to clarify: CBO does say the OASI trust fund will reach $3 trillion.
However, this does not contradict the article, which clearly notes that the $1 trillion difference between CBO’s 2012 estimate and SSA’s 2011 estimate reflects the combined resources of the OASI trust fund and the DI trust fund.
Combining the 2 trust funds provides an apples-to-apples comparison with SSA data.
This reflects SSA’s implicit assumption that OASI trust fund bonds would be used to cover the hole in the DI program once the DI trust fund is exhausted.
just to clarify: CBO does say the OASI trust fund will reach $3 trillion.
However, this does not contradict the article, which clearly notes that the $1 trillion difference between CBO’s 2012 estimate and SSA’s 2011 estimate reflects the combined resources of the OASI trust fund and the DI trust fund.
Combining the 2 trust funds provides an apples-to-apples comparison with SSA data.
This reflects SSA’s implicit assumption that OASI trust fund bonds would be used to cover the hole in the DI program once the DI trust fund is exhausted.