Categories:
Fiscal Policy
Politics and Economics
The government now has a tool that supposedly tells you where your tax money is going. You can try it here. I did not have my own tax data handy, so I used the generic family with $80 K in income.
In my receipt, I cannot find any line item for the main Social Security program, OASDI. Under “job and family security,” there is a line item for retirement benefits for Federal workers (in fact, this is the largest item in the category). But nothing for retirement benefits under Social Security, as far as I can tell.
So I do not understand the calculation. Maybe it’s because of the Social Security trust fund somehow. Until I understand what is going on, I don’t think it makes sense for me to try to comment.
READER COMMENTS
Daniel Kuehn
Apr 15 2011 at 1:06pm
Wouldn’t that just be the first line?
Daniel Kuehn
Apr 15 2011 at 1:07pm
You’re not going to find Social Security under income taxes because income taxes don’t pay for that – FICA payroll taxes do.
Various
Apr 15 2011 at 1:24pm
I understand what’s going on. The “tool” is a piece of junk. It’s acting as though Social Security is a separate self-funded program, independent of the rest of the Federal government. This may be true structurally, but as far as I know everyone agrees that the Trust Fund will soon be broke (if it isn’t already) and that it’s actuarially impossible for the Fund to remain solvent, unless one were to increase FICA tax rates about 50%. Without such an increase (which is highly unlikely) Soc. Security will inevitably be comingled with the rest of the budget. I assume the tool treated Medicare the same way. It’s even less likely that Medicare remains solvent as a self-funded program. What fiction!
tim
Apr 15 2011 at 4:06pm
@various
your assume the laws around SS remain static. They don’t. SS is trivial to fix. Raise the retirement age and increase the upper wage threshold for when FICA taxes are taken out. Reagan did it.
Anyone who says SS is in serious trouble is delusional. It’s defense and medical costs that are more difficult to fix and what should be focused on. Actually I would say that defense is easy to fix – slash it by half to start off with. The problem is that both democrats abd republicans are addicted to defense spending and wars.
Various
Apr 15 2011 at 9:40pm
Tim,
I’m not saying that the SS problems are hard to fix. I’m just pointing out that: a). the tool Arnold is referring to ignores the inflows and outflows for SS, and b). because we’re not sure exactly how SS will be modified in the future, it makes sense to throw both it, and Medicare into the general budget pot.
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