Different Immigration Horse to Beat

[Balta1701]

I couldn't get past this paragraph.

According to the CBO, the bottom quintile of tax payers paid an estimated -5.7% tax rate in 2004, with the second quintile paying a -0.1%. How is adding negative tax payers going to increase revenues?

Do those numbers include Social Security and Medicare?

[southsider2k5]

Do those numbers include Social Security and Medicare?

 

I would doubt it. Those are two separate taxes emarked for specific things. They aren't included as federal tax income.

[Balta1701]

I would doubt it. Those are two separate taxes emarked for specific things. They aren't included as federal tax income.

I think you're right, although the CBO gobbledygook is some of the worst I've read in a long time at making that clear. Their marginal tax rate may be negative, but they're still paying out into Social Security and Medicare, along with state taxes, so they'd still likely be paying out somewhere around 5-10% of their income depending on the state rates.

[southsider2k5]

I think you're right, although the CBO gobbledygook is some of the worst I've read in a long time at making that clear. Their marginal tax rate may be negative, but they're still paying out into Social Security and Medicare, along with state taxes, so they'd still likely be paying out somewhere around 5-10% of their income depending on the state rates.

 

Even the Heritage article said that medicare and SSI would be net losers in this transition, meaning even if they are isolated out from federal income tax revenues, they would be making money off of both of those programs as well, right?

[Balta1701]

Even the Heritage article said that medicare and SSI would be net losers in this transition, meaning even if they are isolated out from federal income tax revenues, they would be making money off of both of those programs as well, right?

In the short term I believe the answer is yes...because of the way the program is structured. If an immigrant were to work for 10 years and pay into SSI and Medicare, then retire, they would be eligible for those programs. But, only paying in for 10 years does not pay for the entire cost of an average retiree on those 2 benefits. However...eventually this turns around eventually, as the incomes of people who remain in this country longer tend to rise with time as they gain experience and language skills, and as the people who retire have on average been working for longer and have paid into SSI and Medicare for longer.

[southsider2k5]

In the short term I believe the answer is yes...because of the way the program is structured. If an immigrant were to work for 10 years and pay into SSI and Medicare, then retire, they would be eligible for those programs. But, only paying in for 10 years does not pay for the entire cost of an average retiree on those 2 benefits. However...eventually this turns around eventually, as the incomes of people who remain in this country longer tend to rise with time as they gain experience and language skills, and as the people who retire have on average been working for longer and have paid into SSI and Medicare for longer.

 

The payins rise, along with the amount of money they would receive from SSI and Medicare. What it comes down to is that the system projects are made with only so many low income receiptiants in mind. As with every other federal program, the rich pay in more than they receive to fund the poorest within the program. If you add a disproportionate amount of people to the bottom end of the equation, without adding people on the high end, you end up with shortfall. The true income potential of most immigrants is capped because of their educational status's being rather low, which means they can only make so much money in a lifetime. The true income gains for immigrants are made in the next generations of those families as they become mixed into the US society, culture, etc, and begin to acheive the key components of wage potential such as speaking English, high school/college graduates, skills training etc.

[jackie hayes]

I think you're right, although the CBO gobbledygook is some of the worst I've read in a long time at making that clear. Their marginal tax rate may be negative, but they're still paying out into Social Security and Medicare, along with state taxes, so they'd still likely be paying out somewhere around 5-10% of their income depending on the state rates.

I'm pretty sure that's the average rate, not the marginal rate.

[Balta1701]

The payins rise, along with the amount of money they would receive from SSI and Medicare. What it comes down to is that the system projects are made with only so many low income receiptiants in mind. As with every other federal program, the rich pay in more than they receive to fund the poorest within the program. If you add a disproportionate amount of people to the bottom end of the equation, without adding people on the high end, you end up with shortfall. The true income potential of most immigrants is capped because of their educational status's being rather low, which means they can only make so much money in a lifetime. The true income gains for immigrants are made in the next generations of those families as they become mixed into the US society, culture, etc, and begin to acheive the key components of wage potential such as speaking English, high school/college graduates, skills training etc.

See, that's the one interesting thing about Social Security though...while 1 higher income earner would pay more into the system than 1 low income earner, beyond $90k a year salary for the high income earner, the percentage of their income paid into SSI declines as their income goes up, because of the SSI wage cap: only the first $90,000 of a person's income is taxable for Social Security.

 

In other words, while a CEO may make 6000x the income of a person making $15k a year, he only pays 6 times as much into the SSI system. This is fundamentally different from the income tax system, in that it is far more regressive. This dramatically reduces the amount of the program that is funded by "The rich" compared to other parts of the tax system, and significantly lowers the level at which people pay more into the system than they get back.

 

Unless that cap is raised (Which has not happened since the Clinton administration), the only way the SSI system grows is if more people pay into it.

 

Furthermore, the exact amount paid out would be a strong function of life expectancy, which I think we all can probably agree is going to wind up being significantly less for a person born in the U.S.

[southsider2k5]

See, that's the one interesting thing about Social Security though...while 1 higher income earner would pay more into the system than 1 low income earner, beyond $90k a year salary for the high income earner, the percentage of their income paid into SSI declines as their income goes up, because of the SSI wage cap: only the first $90,000 of a person's income is taxable for Social Security.

 

In other words, while a CEO may make 6000x the income of a person making $15k a year, he only pays 6 times as much into the SSI system. This is fundamentally different from the income tax system, in that it is far more regressive. This dramatically reduces the amount of the program that is funded by "The rich" compared to other parts of the tax system, and significantly lowers the level at which people pay more into the system than they get back.

 

Unless that cap is raised (Which has not happened since the Clinton administration), the only way the SSI system grows is if more people pay into it.

 

Furthermore, the exact amount paid out would be a strong function of life expectancy, which I think we all can probably agree is going to wind up being significantly less for a person born in the U.S.

 

I can definately agree on the last part. Preemptive health care is a big part of life expectancy, and it just isn't there for poor people anywhere in the world.

 

As for the first part, I totally forgot about the caps, which in this case actually makes the situation more dire. Because the rich are limited to how much they can pay, unlike income tax, that means it take more high wage earners to offset additional poor entrants. While it does lower the average (for lack of a better term) the make or break number, it also still means that the people we are talking about adding to the system for the most part are going to be under this number, as we are talking about a group that is largely illiterate and working at very low paying menial jobs. So in reality the system only grows if the people putting in more than they take out grows faster than the people who are taking out more than they would pay in. Eventually the payouts would have to be lower, SSI taxes would have to be increased, or a combination of both to keep up with new enrollees.

[jackie hayes]

I can definately agree on the last part. Preemptive health care is a big part of life expectancy, and it just isn't there for poor people anywhere in the world.

 

As for the first part, I totally forgot about the caps, which in this case actually makes the situation more dire. Because the rich are limited to how much they can pay, unlike income tax, that means it take more high wage earners to offset additional poor entrants. While it does lower the average (for lack of a better term) the make or break number, it also still means that the people we are talking about adding to the system for the most part are going to be under this number, as we are talking about a group that is largely illiterate and working at very low paying menial jobs. So in reality the system only grows if the people putting in more than they take out grows faster than the people who are taking out more than they would pay in. Eventually the payouts would have to be lower, SSI taxes would have to be increased, or a combination of both to keep up with new enrollees.

Also remember that benefits are indexed by earnings, so low-earnings people would not require as much as high-earnings people.

[southsider2k5]

Also remember that benefits are indexed by earnings, so low-earnings people would not require as much as high-earnings people.

 

There is a benefits floor, which means it gets to the point where no matter how much less you earn, you can't get any less in return.

[Cknolls]

Close to zero cost instead of the ridiculous 30 billion per year...interesting...and not from a source with an obvious agenda...

 

 

I stopped counting at three the number of employees of this non partisan group who previously worked for the AFSCME. (no Agenda there).

 

How about the guy who was Economic Policy Director for Kerry Edwards Campaign?? OOPS!!!! Non-partisan, I forgot...

 

 

Gimme a break!!!!

[Balta1701]

I stopped counting at three the number of employees of this non partisan group who previously worked for the AFSCME. (no Agenda there).

 

How about the guy who was Economic Policy Director for Kerry Edwards Campaign?? OOPS!!!! Non-partisan, I forgot...

Gimme a break!!!!

Because the guy you cited was clearly right down the middle and totally unbiased, like all Heritage people are.

 

Here's the raw CBO data. Tell me which part they changed.

[SleepyWhiteSox]

I stopped counting at three the number of employees of this non partisan group who previously worked for the AFSCME. (no Agenda there).

 

How about the guy who was Economic Policy Director for Kerry Edwards Campaign?? OOPS!!!! Non-partisan, I forgot...

Gimme a break!!!!

 

Well you obviously looked into the site more in-depth than I did.

 

Personally, I would luv to see maybe a goverment-issued study or from a group without an obvious agenda because everytime I look up info it usually seems swayed. Are they even working on anything as a part of the issue?

[southsider2k5]

Well you obviously looked into the site more in-depth than I did.

 

Personally, I would luv to see maybe a goverment-issued study or from a group without an obvious agenda because everytime I look up info it usually seems swayed. Are they even working on anything as a part of the issue?

 

I think we can all agree that will never happen.

[jackie hayes]

There is a benefits floor, which means it gets to the point where no matter how much less you earn, you can't get any less in return.

Yeah, but very few recipients get the minimum. Plus, it's REALLY minimum. Living in poverty minimum. Immigration will not crush SS, the numbers aren't there.

[SleepyWhiteSox]

I think we can all agree that will never happen.

 

So the government is gonna blindly make decisions on the subject or will they just not make public the studies done?

[southsider2k5]

So the government is gonna blindly make decisions on the subject or will they just not make public the studies done?

 

No. They will find a bunch of people to do studies they know that will support their numbers, just like they always have.

[Steff]

Probably on purpose.

 

 

 

Oh hell... there went the AJ again..

[jackie hayes]

So the government is gonna blindly make decisions on the subject or will they just not make public the studies done?

The CBO is a good government study. Maybe not exhaustive, but good and unbiased. Just ignore all the thinktanks and use the link Balta put up.

[Steff]

See, that's the one interesting thing about Social Security though...while 1 higher income earner would pay more into the system than 1 low income earner, beyond $90k a year salary for the high income earner, the percentage of their income paid into SSI declines as their income goes up, because of the SSI wage cap: only the first $90,000 of a person's income is taxable for Social Security.

 

In other words, while a CEO may make 6000x the income of a person making $15k a year, he only pays 6 times as much into the SSI system. This is fundamentally different from the income tax system, in that it is far more regressive. This dramatically reduces the amount of the program that is funded by "The rich" compared to other parts of the tax system, and significantly lowers the level at which people pay more into the system than they get back.

 

Unless that cap is raised (Which has not happened since the Clinton administration), the only way the SSI system grows is if more people pay into it.

 

Furthermore, the exact amount paid out would be a strong function of life expectancy, which I think we all can probably agree is going to wind up being significantly less for a person born in the U.S.

 

 

 

Last year the cap was $97K, the year before $94K...

[jackie hayes]

Last year the cap was $97K, the year before $94K...

It's indexed to the CPI, so it's only being changed in nominal terms, not real dollars.

[Steff]

It's indexed to the CPI, so it's only being changed in nominal terms, not real dollars.

 

 

What's that mean...? It's real dollars out the paycheck!

[SleepyWhiteSox]

The CBO is a good government study. Maybe not exhaustive, but good and unbiased. Just ignore all the thinktanks and use the link Balta put up.

 

Looked good to me. Will do.

[Balta1701]

What's that mean...? It's real dollars out the paycheck!

It means it's indexed to inflation, which means that yes it is real dollars, but each of those dollars is worth less in terms of goods that they can purchase.