The entire transfer payments system is riddled with misappropriation of the language. Tax credits that can reduce the taxpayer's net income tax down to zero are called 'nonrefundable credits,' which is an oxymoron if ever there was one. If we are not refunding tax paid down to zero, what are we doing? Federal welfare through the tax system that amounts to transfer payments to persons whose income tax is already at zero, are called "refundable credits." That's just a lie-0 a deliberate misappropriation of the English language. Last time I checked, the definition of 'refund' requires that one have given something that is being given back. If the government is paying you money that you didn't pay them first, by definition that is not a 'refund.' This labelling was done to avoid calling this transfer system through the tax return filing system 'welfare' or some other equally derogatory term.
If I'm following you correctly, there is the elite, the vast minions of government, politicians and other useful idiots/do-gooders, the welfare/entitlement class, the honest working class who don't get their clothes dirty--and lastly there is my class. Those of us who work hard for a living, don't take any money from the government, don't have medical insurance, and who are basically disenfranchised from the mainstream because we don't vote, ask for handouts, or try to tell other people what to do. We pay taxes, including the inflation tax. Other than a clear conscience, our main saving grace is that we add value and try to follow your work so that we can understand what is going on in the world and how to protect what freedom and wealth we have left. Personally I am doing the best I can to build my wealth, stay out of harms way and enjoy what freedoms I have left. I've been reading you since the 90s and I think you're a national treasure. Unfortunately, those of us who are disenfranchised just don't have any voice/collective power in the modern scheme of things.
About 10 years ago I created a spreadsheet to answer a question: "What should the taxes that I paid into Social Security be worth?"
Some simple conservative assumptions made it easy:
1. Taxes are placed in a simple, unweighted S&P 500 total return fund. You can find this information on line.
2. Contribution and compounding is done once a year at end-of-year. You can always get the latest copy of your annual contributions from Social Security.
The result would be a shock to most people, but it should not be. I never exceeded the threshold above which income is not taxed for Social Security. I am among those who "benefit" the least from the government's "help" with retirement. I just wanted to know how bad it was.
The value of my contributions would be worth at least several million in today's dollars. I get about 1 percent of that value per year. I have heard so-called experts say that Social Security pays for itself in a couple of years. That is true... if you assume a dollar paid in taxes 50 years ago is only worth a dollar today. I often get reactions like I'm a mental case, but the numbers do not lie.
The government says: "Here's the deal (one of Joe's favorites). We will take a little extra in taxes from your income and in return we will guarantee a retirement. We will decide what that retirement will be and we will tax that same retirement when the time comes. We are not sure what that tax rate will be. Just trust us."
I am concerned because Social Security is not sustainable. It is not designed to "pay" for itself. You have "loaned" that money to the federal government. It is gone... spent, and in its place is a mountain of debt. That should not make anyone feel "Sociable" or "Secure".
Social Security is most accurately described as a destruction of wealth at the hands of government. What you get is sunk costs, opportunity costs, and debt all rolled into the same Ponzi scheme.
When you made your spreadsheet, did you remember to double your contribution, to include the like amount that your employer contributed on your behalf?
I would like to point out a couple of things. Medicare and Social Security are paid for insurances. Medicaid and other welfare programs are not. That said, as a community, we have made the decision to not put our most unfortunate in boxes under the bridges even though some end up there. If you would like to discuss the American investment into the underclass it is a conversation worth having, we are invested in and we do promote an underclass and it is an industry. This would be a separate discussion from one dealing with our national debt and governmental budgets. It is also separate from discussions of currency and commodity valuations which if tracked over the last two years reveal a trend. I know that my country looks and acts very much like a corrupt banana republic and why the world looks to us for leadership has always baffled me. Pleas explain, LOL.
Bill, Maybe its time to allow the existing governments in place to fail,and the currency as well (in the U.S.A.).Rebuild from ground zero,per say. Scott
IN TOM DYSON'S FEB 2, 2022 EMAIL HE MENTIONED THAT A REPORT ON GOLD WOULD BE OUT NEXT WEDNESDAY, WHICH WOULD BE FEB 9. I HAVE NOT RECEIVED IT. REALLY LOOKING FORWARD TO IT. TOM ECONOMY, A.T.ECONOMY JR, PAYMENT MADE 12/17/21, 2021, $100.00.
A request, could you share one or two of your analyses from the subscription side. I am interested in the new service and the types of information available. And may subscribe.
As deceptively destructive as the transfer payment system is, we should recognize at least one potential positive outcome that may actually be quantifiable. What I refer to are those "retired" individuals who donate a great deal of their time toward helping another person fix their broken door or assisting with one-on-one for a school student, or even just visiting someone who is unable to leave the house. There are several of these aspects of retirement that keep me quite busy; and when I'm not out there I do put in some good effort at improving the teaching methods I use when tutoring students in math, science, and English. When you deduct those numbers from the non-working population, it doesn't look quite so bad. You can often measure it by seeing how many seniors are genuinely happy.
The entire transfer payments system is riddled with misappropriation of the language. Tax credits that can reduce the taxpayer's net income tax down to zero are called 'nonrefundable credits,' which is an oxymoron if ever there was one. If we are not refunding tax paid down to zero, what are we doing? Federal welfare through the tax system that amounts to transfer payments to persons whose income tax is already at zero, are called "refundable credits." That's just a lie-0 a deliberate misappropriation of the English language. Last time I checked, the definition of 'refund' requires that one have given something that is being given back. If the government is paying you money that you didn't pay them first, by definition that is not a 'refund.' This labelling was done to avoid calling this transfer system through the tax return filing system 'welfare' or some other equally derogatory term.
That’s why they call them “tax credits” not refunds.
If I'm following you correctly, there is the elite, the vast minions of government, politicians and other useful idiots/do-gooders, the welfare/entitlement class, the honest working class who don't get their clothes dirty--and lastly there is my class. Those of us who work hard for a living, don't take any money from the government, don't have medical insurance, and who are basically disenfranchised from the mainstream because we don't vote, ask for handouts, or try to tell other people what to do. We pay taxes, including the inflation tax. Other than a clear conscience, our main saving grace is that we add value and try to follow your work so that we can understand what is going on in the world and how to protect what freedom and wealth we have left. Personally I am doing the best I can to build my wealth, stay out of harms way and enjoy what freedoms I have left. I've been reading you since the 90s and I think you're a national treasure. Unfortunately, those of us who are disenfranchised just don't have any voice/collective power in the modern scheme of things.
Are retired people over age 65 really included in the labor force participation rate calculation?
About 10 years ago I created a spreadsheet to answer a question: "What should the taxes that I paid into Social Security be worth?"
Some simple conservative assumptions made it easy:
1. Taxes are placed in a simple, unweighted S&P 500 total return fund. You can find this information on line.
2. Contribution and compounding is done once a year at end-of-year. You can always get the latest copy of your annual contributions from Social Security.
The result would be a shock to most people, but it should not be. I never exceeded the threshold above which income is not taxed for Social Security. I am among those who "benefit" the least from the government's "help" with retirement. I just wanted to know how bad it was.
The value of my contributions would be worth at least several million in today's dollars. I get about 1 percent of that value per year. I have heard so-called experts say that Social Security pays for itself in a couple of years. That is true... if you assume a dollar paid in taxes 50 years ago is only worth a dollar today. I often get reactions like I'm a mental case, but the numbers do not lie.
The government says: "Here's the deal (one of Joe's favorites). We will take a little extra in taxes from your income and in return we will guarantee a retirement. We will decide what that retirement will be and we will tax that same retirement when the time comes. We are not sure what that tax rate will be. Just trust us."
I am concerned because Social Security is not sustainable. It is not designed to "pay" for itself. You have "loaned" that money to the federal government. It is gone... spent, and in its place is a mountain of debt. That should not make anyone feel "Sociable" or "Secure".
Social Security is most accurately described as a destruction of wealth at the hands of government. What you get is sunk costs, opportunity costs, and debt all rolled into the same Ponzi scheme.
When you made your spreadsheet, did you remember to double your contribution, to include the like amount that your employer contributed on your behalf?
I did not, of course. Bartender, make that a double.
Well, well, well-- could these transfer payments simply be a way to buy votes? And yes both parties are responsible.
I would like to point out a couple of things. Medicare and Social Security are paid for insurances. Medicaid and other welfare programs are not. That said, as a community, we have made the decision to not put our most unfortunate in boxes under the bridges even though some end up there. If you would like to discuss the American investment into the underclass it is a conversation worth having, we are invested in and we do promote an underclass and it is an industry. This would be a separate discussion from one dealing with our national debt and governmental budgets. It is also separate from discussions of currency and commodity valuations which if tracked over the last two years reveal a trend. I know that my country looks and acts very much like a corrupt banana republic and why the world looks to us for leadership has always baffled me. Pleas explain, LOL.
You can’t separate those discussions because they are inextricably connected.
Bill, Maybe its time to allow the existing governments in place to fail,and the currency as well (in the U.S.A.).Rebuild from ground zero,per say. Scott
IN TOM DYSON'S FEB 2, 2022 EMAIL HE MENTIONED THAT A REPORT ON GOLD WOULD BE OUT NEXT WEDNESDAY, WHICH WOULD BE FEB 9. I HAVE NOT RECEIVED IT. REALLY LOOKING FORWARD TO IT. TOM ECONOMY, A.T.ECONOMY JR, PAYMENT MADE 12/17/21, 2021, $100.00.
A request, could you share one or two of your analyses from the subscription side. I am interested in the new service and the types of information available. And may subscribe.
As deceptively destructive as the transfer payment system is, we should recognize at least one potential positive outcome that may actually be quantifiable. What I refer to are those "retired" individuals who donate a great deal of their time toward helping another person fix their broken door or assisting with one-on-one for a school student, or even just visiting someone who is unable to leave the house. There are several of these aspects of retirement that keep me quite busy; and when I'm not out there I do put in some good effort at improving the teaching methods I use when tutoring students in math, science, and English. When you deduct those numbers from the non-working population, it doesn't look quite so bad. You can often measure it by seeing how many seniors are genuinely happy.
Some years ago, when he was an MP in Ottawa, I asked Dr. Keith Martin if creation of an "Entitlement" was a mortal or a mere venial sin.
I thought his answer came far too quickly- "Venial."