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The Water Cooler
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you fix the budget(puzzle)
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<blockquote data-quote="vvvvvvv" data-source="post: 1362089" data-attributes="member: 5151"><p>Those who actually need it are few and far between. Even then, let your local private charities deal with it.</p><p></p><p></p><p></p><p>I've never gotten one of those.</p><p></p><p></p><p></p><p>I say drop social security immediately for anyone under age 35 right now and let them take care of their own retirement. Those who are currently 35 or older will be the final people to pay into (and receive) social security benefits. Yes, it will operate in the red while those benefits are paid, but that's a small sacrifice to make.</p><p></p><p>Those who are under age 35 still have plenty of time to invest into their retirement. Let's assume the 34 year old makes $40K per year. Let's give everyone the incentive to invest up to 7.65% of their income as an above-the-line deduction (in addition to other above-the-line investment deductions) and free of capital gains taxes. Assuming the 34 year old invests $3,060 per year and that investment grew at the low rate of 8% per year for 30 years, he would have over $400,000 in that account (tax free) at age 65. That's assuming their income never went up in 31 years, and that would leave them with approximately 15 years of income comparable to their previous after tax income. A growth rate of 10% per year would yield over $610,000. A more realistic growth rate of 12% per year would yield nearly $1M.</p><p></p><p>Now what about the employer's 7.65%? Ignorant fools will tell you "they'll just pocket the added profits those greedy *******s!" But what is the number one priority of a business? TO MAKE MONEY. How does a business make money? By investing in resources, both human and non-human, that will return a greater profit.</p><p></p><p>For simplicity, let's assume that all employees at XYZ Services make $40K. With the employer's 7.65% freed up, that means that the company now has the resources to hire one new employee for every 15-17 employees (including modest new hire expenses) just based on tax savings. So now, you create jobs, which creates disposable income, which is spent on purchasing goods or services.</p></blockquote><p></p>
[QUOTE="vvvvvvv, post: 1362089, member: 5151"] Those who actually need it are few and far between. Even then, let your local private charities deal with it. I've never gotten one of those. I say drop social security immediately for anyone under age 35 right now and let them take care of their own retirement. Those who are currently 35 or older will be the final people to pay into (and receive) social security benefits. Yes, it will operate in the red while those benefits are paid, but that's a small sacrifice to make. Those who are under age 35 still have plenty of time to invest into their retirement. Let's assume the 34 year old makes $40K per year. Let's give everyone the incentive to invest up to 7.65% of their income as an above-the-line deduction (in addition to other above-the-line investment deductions) and free of capital gains taxes. Assuming the 34 year old invests $3,060 per year and that investment grew at the low rate of 8% per year for 30 years, he would have over $400,000 in that account (tax free) at age 65. That's assuming their income never went up in 31 years, and that would leave them with approximately 15 years of income comparable to their previous after tax income. A growth rate of 10% per year would yield over $610,000. A more realistic growth rate of 12% per year would yield nearly $1M. Now what about the employer's 7.65%? Ignorant fools will tell you "they'll just pocket the added profits those greedy *******s!" But what is the number one priority of a business? TO MAKE MONEY. How does a business make money? By investing in resources, both human and non-human, that will return a greater profit. For simplicity, let's assume that all employees at XYZ Services make $40K. With the employer's 7.65% freed up, that means that the company now has the resources to hire one new employee for every 15-17 employees (including modest new hire expenses) just based on tax savings. So now, you create jobs, which creates disposable income, which is spent on purchasing goods or services. [/QUOTE]
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