Cutting Social Security benefits for "high income" seniors may sound like a good idea, but as always, the devil's in the details. From Dean Baker:
| Wednesday, 09 November 2011 05:51 |
In an article on the deliberations of the supercommittee the NYT told readers
that a Republican plan would raise money by charging "higher Medicare
premiums for high-income people." While the article does not give exact
cutoff for high income, it is likely that is no higher than $80,000 and
possibly as low as $40,000. (Many proposals for reducing Social Security
benefits for "high income" beneficiaries would lower benefits for
people with incomes of just $30,000.)
It is worth noting that "high income" can mean something very
different when the topic is the benefits that workers get in retirement
than when the topic is income taxes. Most major media outlets have run
pieces questioning whether $250,000 (the floor set by President Obama
for people subject to tax increases) is really wealthy.
The reason that the cutoffs for benefits cuts are fairly low is that
there are few elderly households with high incomes and per person
benefits are not very different for the highest income household and the
lowest income household. If $250,000 were set as a floor for subjecting
seniors to benefit cuts, it would save almost no money. The only way to
save substantial money from this sort of means-testing is by cutting benefits for seniors that anyone would view as middle class. |
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