While politicians propagandize over higher taxes on the wealthy, they ignore the real issues of the day; one of them being Social Security. Talk about inequality😡
How many times have I heard about the unfairness of the COLA or those accused of wanting to cut Social Security. SS is something I earned and paid for, it’s not an entitlement‼️ You better tell your Congressmen that.
Now about inequality. Let’s say two workers earn exactly the same income each year for forty-years and thus they pay identical Social Security taxes. They were born on the same day and retire on the same day so they receive the same monthly benefit right?
Wrong‼️ if one of them happens to be married. In that case the spouse even if she had no earnings (and no taxes paid) of her own receives 50% of the worker’s benefit. And you only have to be married for one-year to be eligible for the spousal benefit. Let’s say this dude was married for ten years to another women; took a break from marriage and just a year before full retirement decided to marry the women he was living with for the last five years. In that case both the ex and current spouse can receive half of the workers benefit.
Now for that taxing situation on the benefits you paid for (earned).
Under legislation enacted in 1983, the Social Security Trust Funds receive income based on Federal income taxation of benefits. The funds receive taxes on up to 50 percent of benefits from single taxpayers with incomes over $25,000 and from taxpayers filing jointly with incomes over $32,000.
Legislation enacted in 1993 extended taxation of benefits. The legislation increased the limitation on the amount of benefits subject to taxation from 50 percent to 85 percent for single taxpayers with incomes over $34,000 and for taxpayers filing jointly with incomes over $44,000. All additional tax income resulting from the 1993 legislation is deposited in Medicare’s Hospital Insurance Trust Fund. Source: Social Security website
Virtually all income, including tax-free municipal bond interest, is counted as income. Distributions from Roth accounts are not counted. The income limits are not indexed for inflation so you will be happy to know more and more Americans will be paying taxes on their Social Security benefits in part to help fund somebody else spouse’s benefit who may have paid little or no taxes. 😜 If the amounts were indexed, the $44,000 shown above would be $72,140.51 so many more Americans collecting Social Security would not be paying income taxes on their benefit.
While Sanders rails against inequality and the billionaire class, keep in mind that all the grand benefits from government mostly benefit very average Americans (in less than equitable ways some would say) and it is the middle-class taxpayers who one way or the other pay for all governments promises of “free” or “affordable” stuff. (Americans with adjusted incomes of $50,000 or more pay over 93% of all income taxes).