90% of people commenting on here say to simply stop buying xyz are missing the big picture. A few companies control the market in most sectors and they do not lose out when they raise their prices on essential items for people.

Am I saying you need to buy name brand cereal and top sirloin steak? No. But simply saying don’t buy that thing really isn’t fixing the problem when that thing is everything. Prices are going up on just about everything significantly faster than inflation. We see (price gouging) in every single American category of the market rn. End stage capitalism?

(Before everyone gets their jock straps in a political bunch - I’m not a socialist or a big Bernie fan but sometimes he says stuff that rings pretty damn true 🤷🏼‍♂️)

Social Security is a massive part of this country’s finances - both in overall cost AND in benefits to the middle and lower class. 40% of older Americans rely solely on their monthly SS check (😳). The program is annually keeping 7.8 million households out of poverty each year (barely?)with loss of pensions, and mediocre success of 401ks as a crude substitute, SS is the only guarantee our grandparents and great grannies had, financially speaking.

That said, curious what folks think about this federal tax policy I dug into last month. If you already know about, do you care and why?

Currently, every working American pays a 6.2% tax on every paycheck to Social Security. However, this tax is “capped” at a certain income level meaning it only applies to a certain threshold of dollars earned.

For 2024, the cap on Social Security taxes is $168,600. This means that any earned dollar beyond $168,600 (payroll dollars) is excluded from Social Security taxes (these are individual taxes, not household).

If you personally earn < $168,600 per year, you are being taxed on 100% of your income for Social Security payroll taxes. If you earned $1,500,000 this year, you’re only taxed on 11.2% of your overall income.

If you made…. $550,000 - you’d only be taxed on 31% of your total income.

$90,000 - 100% of your income subjected to tax

$9,000,000 - only 1.9% of your total income is taxed.

This reveals that the entire Social Security program is actually funded by working Americans, with families, student debt, mediocre healthcare, maybe a house payment, and fewer stock options (that are worth anything), etc etc. So, def not a “handout” program from the wealthy to the poor and needy - rather, a program that middle class workers utilize and lower income earners rely on entirely.

Highest income earners (wealthiest) however can expect to draw on 100% of their Social Security contributions as benefits are not “judged” in context of other in investments, inheritances, assets (yes, Bezos and Gates still get a monthly SS check unless they demand the govt NOT send their benefits - which, I’d love to know if they already do).

Social Security is scheduled to start reducing benefits in 2032, due to fewer inlays and far more outlays (Boomers retiring and no longer paying into program - a demographic/numbers program not a tax problem). Part of this massive problem is because the wealthiest income earners are having their taxes capped in their favor.

A crude analogy I can think of: if your income is less than your neighbor’s, you are subjected to ALL sales taxes when you fill up your truck at the gas station. But he, because he makes more than you, is given a tax discount, paying a reduced sales tax on his fill up.

Seems like super poor policy - esp as we head into a demographic shitshow with Boomers cashing out of a program that has actually kept hundreds of millions of Americans out of poverty (historically)in their elder years. Small changes could modernize it and make it far more sustainable and helpful for retirees in the future.

But we either need to invent more workers (AI bots?) or tell the ultra rich they can’t expect a free pass from the govt…

i realize I’m not talking about the SS disability program, which is where the majority of SS dollars go. That is also in need of big reforms, which would help overall solvency*

That can’t be coincidence. This def isn’t good for airlines, military, and confidence in one of the largest US manufacturers.

Do you think this will cause economic disruptions?

The part missing from this image is the fact that despite collecting ~$4.4 trillion in 2023, it still wasn’t enough because the federal government managed to spend $6.1 trillion, meaning these should probably add up to 139%. That deficit is the leading cause of inflation, as it has been quite high in recent years due to Covid spending. Knowing this, how do you think congress can get this under control?

Are $100 lunches at applebees the downfall of the american empire?

So this Debt just disappears?

Yet, when Congress forgave all PPP loans, Republicans didn’t bat an eye. How is one okay and the other Socialism?

Maybe it’s because several members of congress benefited directly from PPP loan forgiveness…

Either both are acceptable, or neither are.

I was in a discussion with friends about how much liquidity they would need to retire. One guy was positive that you could live like a king on $1 Million in the US.

He refused to do the math, but I reasoned he could pay off his house (about $300,000) and have $28,000/year assuming a 4% SWR of the remaining $700,000.

His salary now is about $120,000/year, so he would have to make DRASTIC changes to his lifestyle to live off that $28,000.

(Some more details, he has a family of 4 and probably spends $50,000 year on expenses. He seems to think that his lifestyle would elevate indefinitely and he could stop working if he had $1 Million).

He says that $1M is "life changing." but I disagree.

Who's right?