Problems With The Social Security 2100 Act

how the Social Security 2100 could hurt employees we're gonna talk about that a lot of people singing the praises of the 2100 act and uh my man Devin even Devin Carroll but is it actually as beneficial as what the proponents of it say is kind of the proponents always say how beneficial their plans are but then you dig into anything not so sure so we're gonna dive into this from a group of naysayers on the right the right wing who scary they're under your beds the right wing and let's see what they say because I find this to be a I'm agreeable and some degree in this for sure and will dump into it here right now so alright lists from the daily single not all that familiar with a daily signal actually but I'm sure they're from the right because they have this thing right here says the liberal laugh continue to push the radical agenda against American value so I presume the daily single is the right I just I don't know who they are I know we got the daily caller that's Tucker Carlson staying but I don't know who the daily signal is so part of my ignorance this is authored by Rachel Dressler and she's a research fellow in economics budget and entitlement and the the Heritage Foundation so I'm very familiar with Heritage Foundation if you think they're mad I tell you what I think the scary thing is one if anyone to the right of basically Joe Biden nowadays is considered a Nazi by those on the far left this is frightening to be prophy honest I was reading a post the other day let's watch the thing on main is what I got something on unboxing main from this guy named Nick Johnson who I follow on YouTube I think is from an but I like Nick jaws and all he does like the ten places the you want to avoid a main or the ten places to avoid in California the ten places you want to see I loved his YouTube channel anyway and their talk about Maine and and some guy had wrote in the comments the governor is a Nazi in the top of Paul LePage those a couple years old I said Paul II know so it's just I hate I hate if they're you know they're not see if you don't agree them it's just as frickin it's making light of what they evil these people were stop flipping doing that drives me up the wall Nazis are not paul lepage they're not Donald Trump commies are not who's a Hillary Clinton I like her but she's not a communist a just and to call these people that completely overlooks the abyssal hoard damage they've done to people don't do that lit hides down all right so let's go into this so here's Rachel the truth is unavoidable Social Security is insolvent in solvent it's set to run out of money to pay scheduled benefits in about 15 years we all know this so I'm not saying anything that she's not saying anything I've disagreed with I think the lack of solvency and it being bankrupt ie you're not gonna get payments it's completely misguided that's what people say you're not gonna make a money off Social Security here insolvent they assume that means you're not gonna get paid some not true policymakers only have a handful of options to avoid the 25 percent cut and benefits for everyone raise taxes cut benefits and Mac the combination of both that's it what's not clear to many Americans is whether they would be better off with a smaller or larger Social Security system all together would be would they be better off paying more taxes and receiving more from Social Security or keeping more than money in the first place and my new report Mike from the Heritage Foundation we examine that question and we find that Americans of all income levels would be better off paying less and Social Security taxes and receiving more in targeted benefits in line with need so again a needs-based program as opposed to what the 2100 ACT is going to do which I'll share with you but that's not what Congress wants to do within the next month or so month or so the house will likely pass a Social Security 2100 Act which makes Social Security solvent by imposing supersize tax increases the bill goes farther than just raising taxes to avoid benefit cuts it would raise taxes enough to increase benefits immediately for all current and future recipients with the bill to pass the tax rates would rise for everyone to 14.8 from the current twelve point for now so basically once at 1.2 percent to the each employee and 1.2 percent to each employer so we're not they tell us how much that will be once boy in someone making $50,000 will pay another 1200 bucks a year in taxes 100 bucks a month in taxes if you're making 50,000 I just sorry that's that's that's not a deal stopper for me I'm sorry it's not 100 bucks a month for you and then 100 bucks month your employer to make a solvent it's not a deal stopper for me and I'm coming from the libertarian right my friend so that is from someone who generally despises taxes and all iterations but in this case there's a benefit to it and we'll dive into that here in just a second but I think these people miss their Social Security tax bill would be about seventy four hundred dollars at that point almost as much as an entire household spends on food in the year now I didn't click on this link my inclination is they're using their food budget today at seventy four hundred dollars a year and they're comparing it to once fully phased in the tax rates on Social Security in 2043 so that's uh that's disingenuous that's 23 years 24 years from now saying at 50 percent of $50,000 you'll pay seventy four hundred dollars in taxes in 2043 and your food budget today is seventy four hundred bucks I hope that makes sense so I look I've dived into it I just because I don't like the Frank you don't care but I imagine that's what they're doing is they're saying your food budget since 94 hundred dollars fast forward 25 years essentially you can pay seven four hundred dollars in taxes to Social Security and that's just not it's not happened to a pelear is what what is a bothersome to me what's most perplexing is that the 2100 Act would increase benefits most for wealthy Americans under the Act a worker averaging earning an average of thirty thousand year would receive three hundred thirty-three dollars more in Social Security benefits millionaires per year okay millionaires on the other hand would receive twelve thousand three hundred thirty three dollars more per year so a worker gonna see roughly fifty bucks a month who's making thirty thousand but a millionaire would receive more than a thousand dollars a month it's interesting too because they always say tax cuts for the rich only the rich again the tax cuts disproportionately cuz they're the only ones to pay the tax and here we have this the Democrats doing the same thing Social Security increases for the rich and if I were the Republicans I'd be hammering that hammering that like crazy saying why do you want to increase Social Security benefits basically would say we got a thousand a month 250 month so that's 20 times why do you want to increase Social Security benefits 20 times more for the Ritz than for the working the working-class folks I'd be on that like white on rice and I would absolutely hammer that home and say yeah the Democrats are favoring the wealthy cuz we're Democrats have done that the Republicans since the dawn of mankind and they went if they were to do that as long as they had a proposal like what I've said to to basically make Social Security more solid you can't just hammer him you got to offer something to wave I mean do whatever that's hardly in line with the purpose of the social safety net to make the wealthier of wealthier the wealthy wealthier the irony is that while everyone was received more benefits than they currently do under the Social Security Act a 20100 Act those benefits would be less if they just kept their money and saved it on their own and this is a critical part I think these people miss and that's I'm telling you if they just kept their money and saved it on their own I hate to say it Rachel they're not gonna do that not just the benefit of Social Security is it's a forced savings program week and this is the benefit of a pension this is the benefit of anything as for savings we can sit here all day long and say if you would do this you would have that later on down the road the problem is very few people do that what you're saying it's kind of the by term and invest rest I love it I love the thought the theory behind it but very very very few people actually do that they spend the money they spend the money I'm telling you right now and yes there are a group certain group of frugal people who won't I'm just telling you the vast majority of people are not gonna save it on their own they're just not and this is where the right-wing makes huge mistakes on this because a for savings program of Social Security and a mortgage by the way is a benefit unfortunately because human behavior is I see something today a bird in the hand is better than two in the bush that's because despite what politicians say Social Security is not a personal savings program it's a wealth transfer program that moves well from younger generations to older ones it takes workers payroll taxes and immediately transfers them to current retirees making it harder for workers to save money for themselves over time I completely agree that there's no other round as our analyst analysis shows workers of all income levels would be better off keeping their own money than paying higher taxes of receiving Social Security again again if young Americans were to save the money they would not from pain into Social Security and they're just not going to do that if they were to do that to lower-income workers would have fourteen thousand seven hundred seventy eight dollars more in retirement middle-income workers 37 thousand and wealthy workers about a hundred sighs I just again add that when you say if they were to do this then that will happen and you know for a fact they're not going to do this it's just kind of like at this point it's a moot point but but here's a societal impact because I research at Wharton looked at both the 2100 act and a smaller more targeted perform accouting something similar the Heritage Foundation's proposal which includes raising the retirement age reducing the benefits based on wealth which i think is interesting reducing the benefits based on wealth I like that's coming from the right wing I wish the right wing would be more voice first and espoused and included in Trump sawr I'm telling you man Trump were just a rung on this alone and nothing else just run on Social Security making it more appealing to the middle class he would I mean I look how think he's gonna lose anyway but he would smoke his peers smoke them and cement his legacy for four decades just like FDR did but they found the economy would be 7.3 percent larger with a smaller social security program than if they made it bigger and here's why the logic is straightforward according to Andrew Biggs who works I think competitive or American Enterprise Institute another right-leaning free-market think-tank when taxes go up people work less when Social Security benefits go up people save less if bet if people work less and save less the economy grows more slowly slower growth compounds over time bringing down family income by 2043 wharton estimates the Social Security 2100 I became law GDP would be 1.6 lower in today's dollars than if lawmakers provide more target benefits and did not raise taxes well there's no way to undo Social Security's past successes Congress can curb the program's growth and focus on us original purpose protecting seniors from living in poverty no one wants to see low income elderly people's Social Security checks slashed by 25% it's just not going to happen but they also don't want to forego more of their paychecks and have fewer opportunities and earnings in the future I don't know about that not sure that's true there simply isn't any economic benefit more argument or social safety net role for imposing higher taxes across the board in order to provide middle class and upper income workers were more money for golf green fees and gifts for grandkids no one is against those things but they should come from private savings not a federal safety net I completely agree that Social Security ought to be realigned with this original mission of keeping seniors out of poverty if that is achieved we estimate the Social Security tax rate could to come by 10% instead of rising by nearly fifteen percent that would leave the average American with about 2,400 bucks more in their wallet all right look I yeah we can have these arguments all day long it's just it's not gonna happen I mean the Congress loves to power and grain and taxing the middle class and lower earners are a huge voting blocs and they realize significant on Social Security so anyone who argues against Social Security is gonna lose you're just gonna lose we're too ingrained with it it's too ingrained in our culture so what I say is I agree with the Heritage Foundation the targeted benefits without question I mean so I look man I think I like I said a million times raise the second Bend point from 32 to 35 or 38% that immediately gives targeted benefit to middle and lower earners and so in a retirement without question inflate index the taxation on Social Care for inflation and raise the retirement age to 70 the full retirement age of 74 people under the age of 40 you can do it under the age of 54 why because I'm under the age of 50 okay raise the retirement age the for retirement age of 74 people under a certain age increased get increased a second Bend point from 32 percent to 38 percent immediately that immediately increase the benefits for a current recipients and future recipients I got no problem raising the payroll tax by 1% either so 1% to the employee 1% the employer and you're done man I mean that's a huge huge benefit to everybody no cap is keep the cap on the hiring owners because again that camp is not going to raise anything just makes people feel are doing that economic inequality that alarm is silly so I hope you find this helpful again it's coming from the right go my inclination I bet if we ran some number or looked at something some reports from Mother Jones in the nation the too far left radical magazines out there I bet they'd have some issues with Social Security 2100 ACTU because it does increase benefits for the wealthy because what the left wants is they want to get rid of the caps on earnings but don't allow them to earn more money I just I'm telling man you start doing that you're playing with fire you are playing with fire begun then you can say we can raise their Social Security tax significantly on these people and what that does is just like Andrew Biggs Ronald Reagan the lady he wrote Pippa Pippi Longstocking all these people say and he's Reagan was a left-wing guy I don't know about Biggs the lady rope astrid something longer'n or something that she was 11 i huge socialist but what these people all say and you know this if you tax me to death I will stop contributing to the tax rules I won't work and then ask to draw back but raising the cap or get rid of the Kappas over security taxes and not allowing those people to benefit from them because they're just gonna say screw this I'm done at 135 I'll stop work and I'll stop paying people and it will be done and that's not good hey hope you like this I'd love to hear comments on that smash and then don't forget to subscribe we'll see you next time

  1. I think the $333 for the average worker is a monthly increase versus the $12333/yr for the millionaire. $333 * 12 is more like $3996 /yr. I am basing this off the chart at time 9:17 in this video about lifetime benefit increase. So $4K versus $12K seems bad but the other person is making 20 times as much and paying that into the tax system. In any case, I am willing to pay more to keep social security working. I am self employed and am willing to pay for peace of mind, knowing at age 74 I don't get a 25% cut and am too old to earn supplemental income. Keep up the good work!

  2. Where do I start:
    1. Where do you believe on a political spectrum is Nazism in relation to communism or fascism? Nazism is NOT extreme right. It is another flavor of extreme LEFT. Learn the history, instead of repeating morons who claim that freedom of speech is Nazi ideology.
    2. Communists are not bad? Again, who tough you the history. I assure you, that there is no difference between communism and Nazism or Italian style fascism. Tyranny is still a tyranny. Death camps or gulags are still THE SAME THINGS. What Soviet communists managed to convinced illiterate Americans and Europeans is that there were good, because they fought Hitler. They do not want to talk about the time when they and Hitler were very close allies and attacked Poland only 2 weeks after Hitler started WWII. Soviets went to war with the III Reich ONLY AFTER uncle Adolf turned on them in 1940, and send Stalin running all the way to Moscow. Russian communists murdered MORE people just in 1932-33 then Hitler did during WWII. Over 10mln Ukrainian peasants were starved to death then. 100 mln people perished in Soviet gulags. If you add China, Vietnam, Cuba, Eastern Europe, Laos, etc… The number is just astronomical. All communists. Hitler could only dream about such numbers.

    3. No amount of screwing the "rich" will help Social Security. No delay, no additional SS tax, no reduction of benefits (unless you believe that 0% is the right amount). SS is ALL about DEMOGRAPHICS. If people like you started calling the problem by its real name, we and most of the developed societies wouldn't be in this predicament. You can run your bullshit spreadsheets any way you want, but the fact remains – with one woman giving birth to one child, no society can survive. Even commies in China figured it out and now have the 2 child policy. When you convince young women that not having children before 40, not saving for retirement, is a very progressive and good thing, sex exists only to provide pleasure and is not vital for human existence. If abortion is a virtue, not a stupidity… well, you have a problem of Social Security and retirement.

  3. What about instead of SS they had a forced 401K? You can't touch it, you can't take any money from until retirement age. Take the same amount out of their paychecks but invest it instead. You do not have the option to waive it. Seems like it would work better then the current pyramid scheme.

  4. 7:30 THANK YOU! Nobody seems to understand this. I hear it all the time: "Give me my SS money NOW. I will invest it and I bet I can do a better job than the stupid US government." I totally disagree with this. And it's NOT only a human behavior issue. Even if people are disciplines and TRY to invest it, they will eventually fail, for a simple reason: prices recalibrate to what the market will bear. If people's paychecks suddenly increase by 2-3%, everybody who sells something will know that, and raise their prices accordingly: gas, groceries, college, cars, piano lessons, clothes, houses, anything. EVEN IF people are disciplined and try to put that money into retirement, it won't be long before inflation/price increases will eat up that money. Nobody will be able to save, even if they want to, and even if they are disciplined enough. Then at age 65 they will have NO retirement and NO SS either. And this is if people are disciplined and didn't just blow the money.

    We have actual proof of this. In 2009 Pres Obama declared a SS payroll holiday. He actually did give people their money! How many people actually said "Great, I have more of my money in the first place, I'm going to invest it and do better than the gov." Not many, I can assure you. They either blew it, or used it to pay expenses. And then when the tax holiday ended 2 years later… did they say, "well, now I have some retirement, thanks Mr. Pres." ? Oh HECK NO. Everyone whined and moaned about the "tax increase" and "they couldn't make ends meet." Prices had risen in that time.

    So when you say it's "forced savings," it's a benefit two ways. Not only are you forcing the individual to save, but you are also forcing businesses to keep their prices down because paychecks are a little lower.

    (On a side note, the same thing happened when women entered the professional workforce in the 1980s. At first, those double-incomes did very well, because prices were still calibrated to one income. But 30-40 years later, prices — especially housing — have risen to soak up the wife's salary. Now two incomes is the new normal.)

  5. This article really didn't address the high earners FICA cost, because while it dissed that they'd get Hugh benefits increases compared to a low wage worker, it didn't mention, the cap for there FICA would also climb, so in effect, they'll still be doing most of the heavy lift, to salvage SS…

  6. Josh, if FRA were to become 70, that lowers the income for recipients who sign up at 62… that's millions of future low income retirees that would feel more financial pain…

  7. Would of been nice 40 + yrs ago if I had a option to place a portion of my SS Taxes paid into a simple index fund and the other half into the SS system with the ability to begin withdraws at 62. I have been paying into a system in which our politicians raid to pay for their pet projects

  8. Look they really need to raise the rate of take outs. They put inflation on clerical workers, of which they are few compared to construction. WOW I'm not old, per sae, but I've worked hard. I'm tired. No pension for my generation. Nothing for being loyal. Pardon my French but f that. Anyone earning over 132 and gets social security ,and they haven't's like the 4.5 billion….hmmm who's paying for that. ?

  9. Did I miss something? Raise retirement age? R u crazy? I've worked physically hard jobs all my life… talk to the construction worker, house builder, brick layer. OMGosh we r tired by age 55-58 we rdone.

  10. The Right will never introduce a more progressive scheme as that would entail increasing the cap increasing the tax rate. Instead the right will try to decrease benefits either directly via means tests or indirectly via changing the measure of CPI or increasing the full retirement age. As a financial planner you should know how harmful such benefits decreases could be.
    You seemed confused about where the $7400 amount came from so I tried to clarify that.
    You also gave no analysis of how a hypothetical million dollar earner would stand to collect $12333 more in benefits , so I tried to clarify that for your listeners as well. The point that you seemed to miss was that rather than a give away to the rich the million dollar earner was paying in much more than he stands to receive in additional benefit.
    By removing that .02 bend point from the 2100 act proposal, the millionaire earner would get no benefit for his extra contributions and the Right would lose the talking point which just confuses the issue.
    Do you yourself think the $12333 in benefit is exorbitant given the $88000 in addition yearly contributions ( yes – made by both the employee and the employer)?

  11. If you were actually laboring for your living I highly doubt you'd want to increase the age to 70.How about 80 doesn't effect the age for people who've put in for 35 or 40 years is theft plain and simple.I'm sure most white collar workers and millennials would be all for it.

  12. Josh,
    A few points:
    1) The total Social Security tax of $7400 per year is %14.8 of $50,000. But that includes both employer and employee contributions
    2) The 2100 act raises the lowest bend point from .9 to .93. That is why low income earners stand the get only $333 more per year.
    3) The 2100 act introduces a new beak point at $400,000 of income at .02. So a million dollar earner would receive ($1,000,000 – $400,000) *.02 = $12,000 more per year + $333 from the increase to the low bend point = $12,333 per year. On the other hand, that person would have contributed $600,000 * %14.8 = $88,000 per year for 35 year to receive that extra benefit. The right can and will make a talking point out of this, but it's clearly disingenuous to do so. I for one, would have no issue with eliminating the additional .02 bend point, but its a minor point for me.
    4) Mean Testing of Social Security is being sold by arguing that the wealthy (like Buffet and Gates) don't need to get the benefit, but the test is being designed to hit the upper middle class not the super rich. The Heritage Foundation means test for single earners for example kicks in at $55,000 Adjusted Gross Income, and eliminates the benefit at %110,000 AGI. That represents a 1.8% benefit reduction for each $1000 in AGI over $55,000. Consider the single person who has contributed to Social Security at the max for 35 years and delays until 70. Under current provisions, that person would stand to receive about $48,000/year. Under means testing, that person would lose 1.8% of $48,000 = $864 of income for each $1000 of income over $55,000. That's a marginal tax rate of %86. In other words, means testing would wipe out the ability of that person to earn extra spendable cash by working in retirement. Even worse, if that person were forced to pull an extra $55,000 from his IRA to cover a large one time expense, his Social Security benefit the next year would be eliminated entirely, and the impact would resonate from year to year as he would be forced to pull out more from the IRA the next year to make up for the lost benefit.
    So please, please, please do not get on the Mean Testing Bandwagon. Look at the numbers carefully. Look at what it might do to your own retirement. We are not talking about Buffet and Gates. We are talking about earners like you are (or hope to become).

  13. Full Social Security age should be raised. I am 35… I would gladly opt out of paying into SS if I could in order to invest that money. I know as a "whole" people will spend instead of invest, but I am not in the majority. I will never see the return on investment that myself and my employer has paid in over all these years had I just invested it in an ETF with a modest return of 7%. I am not on board for paying another 1%, nor am I on board with companies paying another 1%. That just means that the company will pay you at least 1% less in salary.

  14. It's always funny when these crazy liberals call everyone else Nazis as it shows their ignorance and hypocrisy. The Nazis were the extreme left…they were socialists. Think about it, totalitarian government bent on controlled every aspect of life…cut from the same cloth as those that want to regulate such minutia as song lyrics, soda and red meat. Look at the actions of these Antifa fools, straight out of Mein Kampf smashing windows, assaulting people and burning cars just like Kristallnacht (the night of broken glass). The article brings up some interesting points but I always balk at payments based on "need" as it turns men into beggars and isn't really equitable. If you think about the system as it stands for lower income workers it replaces ALL of their income as opposed to only a small portion of high wage earner's. By the time you have half of the political machine advocating for taxes on investors to pay for foolish student's loans and now jacking up the Social Security system it seems that America's demise may soon be at hand. As always, destruction comes from within.

  15. I am not inclined to more forced savings any more than I was inclined to be forced to buy the incredibly expensive healthcare plan that was foisted upon us. I think the safety net that is Social security is a fair minimum protection which, should be supplemented by the individual if they feel they need more (which likely they will). But when the state imposes a plan on the populous, it is always one that will harm those who will take responsibility for themselves.

  16. The Nazis saved millions of German Catholics and Lutherans from communist extermination. And a lot of Jews were not put in concentration camps

  17. No mention of less workers are paying into the sytem but more people are being paid out ? Birth rates are at record lows. Baby boomers with their fat pensions are retiring at a rapid rate in the up coming years. Millenials are drowing in debt and barely save or invest at all. Inflation & cost of living are eating our dollar away. Technology is destroying jobs.

  18. If we're going to raise the retirement age, something needs to be done about age discrimination in the workplace. People in their 50s and 60s have a much more difficult time finding a new job if they get laid off.

  19. Problem with Saving for Retirement is Americans don't have any safe places to put savings. Real Estate is taxed. Stocks are overpriced with Fiat Money. Bonds pay less than inflation. Precious Metals are manipulated.

  20. Raising taxes on young people to fund the retirement of wealthy older people is immoral. Means testing needs to a significant part of the solution.

  21. Josh, I agree with you 1000%, people won't voluntarily save for retirement, and the proof is in the current savings statistics. Too many "ifs", if they save ……, if they make ………, . So, what "if" they lose money? What "if" they borrow against their retirement savings? What "if" they're broke at retirement age? Then we're back to public funding to keep seniors out of poverty. SS may not be perfect, but we can't throw the baby out with the bath water.

  22. So… While you agree with a few of the changes in SS 2100 act, there are some parts of the act that you disagree with. I also disagree with some of the changes. Here's to hoping that the SS 2100 act does NOT pass as written.

  23. Kick the can down the road. I want retirement age raised until after I retire. I got 13 years to retire. I need social security money at 62.

  24. Social Security 2100 has not passed yet and has not been finalized, so to worry about it or start spending the money is foolish.

  25. Something needs to be done to secure SS. Kicking the can down the road will never help. I agree with a small tax increase and raising the FRA. The idea of a targeted maximum based wealth sounds interesting. Possibly a layered approach, two or three tweaks could make it easier to absorb by all.

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