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  #901  
Old 05-14-2018, 12:01 PM
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Westley Westley is offline
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Originally Posted by nonactuarialactuary View Post
regressive
Yeah, I don't think that word means what you think it means.
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  #902  
Old 05-14-2018, 12:24 PM
nonactuarialactuary nonactuarialactuary is offline
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Yeah, I don't think that word means what you think it means.
Tell me what it means then. A flat 25% tax hurts a poor person much more than the same 25% tax hurts a rich person. If you want to be pedantic about the definition of the word, then sure, itís neither progressive nor regressive because both people are paying the same percentage, but 25% means something very different to the two people.
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  #903  
Old 05-14-2018, 03:50 PM
Steve Grondin Steve Grondin is offline
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Originally Posted by nonactuarialactuary View Post
Tell me what it means then. A flat 25% tax hurts a poor person much more than the same 25% tax hurts a rich person. If you want to be pedantic about the definition of the word, then sure, itís neither progressive nor regressive because both people are paying the same percentage, but 25% means something very different to the two people.
Typically regressive/progressive in this context is measured off percentages, not utility curves. I don't think it is pedantic to say you won't convey the utility argument and will end up confusing most people if you use "regressive" in the manner you were thinking.

When a level % sales tax is discussed, it is typically described as a regressive funding mechanism, but often qualified with "because poorer persons spend a higher % of their income on necessities". This hints to the idea that % of income tax is generally the baseline from which progressive/regressive is measured. I say this without commentary of whether that is a "fair" baseline, just that people commonly use it.
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  #904  
Old 05-15-2018, 02:00 PM
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Originally Posted by Elinor Dashwood View Post
By "flat tax" I meant "flat percentage of income", not a flat dollar amount, just in case that was confusing.

Neither regressive nor progressive.

And it seems we agree on the flat benefit. It ensures a minimum standard of living in retirement, doesn't punish people for saving, but also doesn't pay more to the people who probably need extra money the least... i.e. those with higher pre-retirement incomes.
Okay, re-reading I see you were focusing on means testing.

Yes, we agree on the flat benefit without means testing.

I suppose we could debate flat vs. progressive tax, and whether that flat tax would apply to just labor income or both labor and capital income, and whether "flat" means that you really plan to tax people whose incomes are below the poverty line, but I assume those issues have already been beaten to death in this thread.

Last edited by independent; 05-15-2018 at 02:05 PM..
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  #905  
Old 05-15-2018, 02:03 PM
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would you like credit when i blog it?
I'll settle for a link to the blog.
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  #906  
Old 05-16-2018, 08:53 AM
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My blog is here:
http://stump.marypat.org/

But I haven't blogged that particular item yet
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  #907  
Old 05-16-2018, 07:09 PM
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Thanks. I wasn't concerned about that one item, just what I might find on an actuary's blog.
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  #908  
Old 05-17-2018, 07:01 AM
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Sure. I mainly blog about public pensions, and some finance.

Mondays are when I read the newspaper... from 1918
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  #909  
Old 05-17-2018, 08:46 AM
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Mass Mutual has a Social Security knowledge quiz:
https://www.massmutual.com/planning/...-security-quiz

Yes, I got all 10 questions right, and those who have looked at SocSec reforms should be able to answer these.

Most people aren't deep into Social Security details, though:
https://www.cnbc.com/2018/05/15/half...-benefits.html
Quote:
Half of Americans fail this quiz on Social Security retirement benefits
Forty-seven percent of adults ages 50 and above could not pass a simple Social Security quiz.
Two topics that particularly confused quiz takers: full retirement age and spousal benefits.
Not fully understanding Social Security strategies can result in big losses for retirees if they make a mistake when claiming benefits.

Spoiler:
If you can't pass a simple five-question quiz on Social Security retirement benefits, you're not alone.

Almost half of adults ages 50 and above — 47 percent — failed the quiz that mutual life insurance company MassMutual recently sent out in an online survey.

Aspiring retirees can take some comfort in the fact that those results are actually an improvement from a similar survey conducted three years ago. That 10-question quiz resulted in a failure rate for 72 percent of the general population and a 62 percent defeat for those ages 50 and up.

"The good news is we're making progress," said David Freitag, a financial planning consultant and Social Security expert at MassMutual. "The bad news is we have a long way to go."

Two topics that stumped quiz takers were the ideal age for claiming Social Security and spousal eligibility to receive retirement benefits.

When asked to answer true or false to the statement, "Under current Social Security law, my benefits will not be reduced if I claim them at age 65," only 49 percent answered the correct answer, "False."

Most individuals who reach retirement today can receive their full benefits at age 66 or 67, depending on the year in which they were born.

This is what is known as full retirement age, which is often confused with the age by which you typically must sign up for Medicare — 65.

"You are going to be taking a reduction in benefits if you don't fully understand your full retirement age," Freitag said.

Believing these Social Security myths could make you poorer in retirement Believing these Social Security myths could make you poorer in retirement
4:50 PM ET Wed, 9 May 2018 | 01:02
The next question that stumped respondents asked them to answer true or false to the statement, "My spouse is eligible to receive Social Security retirement benefits, even if he or she has no individual earnings history."

Just 54 percent of respondents responded with the correct answer, which is "True."

Not understanding the nuances of Social Security retirement benefits can cost couples.

If a married couple went to buy an annuity that would pay $5,000 per month for the rest of their lives, while adjusting for inflation at 2 percent per year, they would likely pay more than $1 million. "It's a staggering number," Freitag said.

Social Security retirement benefits are often worth that same sum over your lifetime.

And for married couples — who have many options based on their ages and eligibility for benefits — there is a lot at stake.

"If you have an asset in front of you that's worth more than $1 million, it's worth understanding," Freitag said.

Another key finding of MassMutual's research found that 86 percent of respondents ages 50 to 59 have not set up an online account with the Social Security Administration. Meanwhile, 60 percent of the 1,007 total individuals surveyed, ages 50 and up, have yet to create their online accounts.

Setting up a My Social Security account not only helps you protect your benefits from getting stolen, it also helps you double check your earnings record upon which those benefits are based.

Mistakes, which can be prompted by job changes or misprocessed 1099 forms, are common, according to Freitag. If you have 30 people in one room, 10 percent of them will likely have an error on their Social Security record, he said.

Making sure those records are accurate is crucial, as the Social Security Administration takes your highest 35 years of earnings to calculate your benefits.

"People need to be aware of how much they're contributing to the Social Security system," Freitag said.

Quiz questions (Answers = True or False)

1. Under current Social Security law, my benefits will not be reduced if I claim them at age 65.

2. My spouse is eligible to receive Social Security retirement benefits, even if he or she has no individual earnings history.

3. If my spouse dies, I will continue to receive both my own benefit and my deceased spouse's benefit; the total Social Security benefits I receive will not change.

4. Social Security retirement benefits are based on my earnings history; I'll receive the same monthly benefit amount whether I start collecting before or after my full retirement age.

5. If I am still working when I claim my Social Security, my benefit might be reduced, depending on my earnings and my age.

Answers

1. False

2. True

3. False

4. False

5. True

Visit MassMutual's quiz for full explanations of the answers.


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  #910  
Old 05-17-2018, 09:35 AM
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https://www.forbes.com/sites/ebauer/.../#19ddd67965e7

Quote:
What's Next For American Fertility Rates - And Social Security?

Spoiler:
The latest figures from the CDC are out: as described in "Baby Bust: Fertility is Declining the Most Among Minority Women," at the Institute for Family Studies, 2017 fertility rates have been published, and show a 40 year low, at 1.76 lifetime births per woman, with the most dramatic declines, expressed in "missing births" over the past decade, occurring among Hispanic and African-American women, whose fertility rates are now, while still higher, much closer to the already-low rates of white non-Hispanic women. Specifically, the fertility rate for black women dropped from 2.15 to 1.89, and that of Hispanic women dropped from 2.85 to 2.1 in the time period of 2008 - 2016, compared to a decline from 1.95 to 1.72 births per non-Hispanic woman.

What does this mean?

To take a step back: there's a certain tendency, among a certain political mindset, to engage in some schadenfreude with respect to the low birthrates of such countries as Germany (TFR 1.45) or Japan (TFR 1.41). "Our culture is superior to theirs, because we love children and have hope for the future, because of American Exceptionalism and our continued religiosity, which they don't have." When they institute programs such as parental leave or child benefits or free daycare, we say, "those countries need to bribe their people to have children but we don't."

And for many years, this was true. When fertility rates dropped sharply in the last decade, it was explained as a combination of deferred childbearing due to the recession mucking up demographers' models, as well as a general societal trend of deferring parenthood to older ages. A Washington Post article from 'round about this time last year, when the prior set of statistics were released, carried a confident tone: the drop is a temporary blip, and other signs, such as the drop in births among teens and twenty-somethings, were positive. The post cited a Brookings Institute demographer, William Frey:


Times of economic downturn or uncertainty tend to cause a drop in birthrates, but when things turn around they tend to bounce back in a kind of catch-up period.

“Every year I say when the economy is getting better then we’ll start having more children,” he said, “and I'm still expecting that to happen.”

But for how many years will demographers continue this mantra? One hears repeatedly that the life experiences and expectations, hobbies and interests of the younger generation of the middle class are changing. Their understanding of family life has changed. They are less willing to be "tied down" and have bought into the idea of one's young adult years (a range that expands well into the 30s) being a time for adventure and new experiences. Their era is one in which those who do become parents, if middle class, are expected to devote themselves to the task. More significantly, given the dramatic declines in fertility among Hispanic women, it appears that the fertility rate was really inflated by less-assimilated immigrants temporarily raising the average in a manner that's no longer true.

So why should they continue to birth, on average, 2.1 children, just because public policy experts want them to?

As anyone who can manage basic math can determine, 1.76 is less than replacement rate, and signals a long-term declining population or, alternatively, the need for consistently high levels of immigration to keep the population size stable. And, not surprisingly, fertility rates matter quite a bit in measuring Social Security's sustainability -- or lack thereof. In the latest actuary's report, the baseline projection valuation is based on an assumption that the currently low fertility rate is temporary and recovers to 2.05 in 2023 and then dips again to 2.0 in 2027. But the report calculates two alternate variations, one in which fertility rises to 2.20 and one in which it stays low, at 1.8. (Note, too, that the report was prepared prior to the most recent update to the TFR and assumed that the 2015 TFR of 1.84 was the low point.)

In each case, of course, the trust fund is depleted in 2034 -- future fertility rates would have no effect here. But the effects are long-term. Over the 75 year projection period of 2017 - 2091, the income taken in by Social Security does not change all that much -- 13.84% of taxable payroll in the baseline case, and 13.88% in the low-fertility case. The expenditures are not all too far apart, either: 16.67% vs. 17.07% of taxable payroll. But looking at the end result, the annual balance for 2091, expenditures exceed income by 4.48% in the baseline, and 5.97% in the low-fertility scenario, a difference of about 1.5% of taxable payroll -- and that's assuming that fertility recovers slightly rather than worsening.

Are there other issues at play in the sustainability of Social Security? Yes, of course, Is immigration a solution to low fertility rates? Maybe, but it brings issues of its own if we try to substitute immigrants for "missing" babies. Are places like Japan and Germany going to face the consequences of falling fertility far sooner than we will be? Definitely. But these annual CDC reports are, if nothing else, a warning that we are not exempt from the need to think about the consequences of low fertility.


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