For Most Seniors, Social Security Is Their Biggest Source of Income
The 80-year-old Social Security program has long been known as the third rail of American politics -- touch it and you die.
Last year alone, more than 59 million Americans received retirement, disability and survivor’s benefits totaling $863 billion. While some lawmakers and policy experts warn that the system will begin to run short of cash beginning in 2035, seniors’ advocacy groups have vigorously fought major changes and cuts.
Related: Battle Lines Form in the Fight Over Social Security Payment Reductions
Some nine out of ten people who are 65 or older receive Social Security benefits, according to the Social Security Administration, with an average monthly benefit of $1,294 average for retirees. Overall, Social Security benefits constitute about 38 percent of the income of the elderly, but that number varies greatly from individual to individual.
For the majority of seniors, Social Security makes up the majority of their income. Sixty-five percent of beneficiaries age 65 and older get more than half of their income from the program. Nearly a third (28%) rely on Social Security for 90 percent or more of their income.
Related: 4 Ways to Fix Social Security
The pie chart below, prepared by the staff of the congressional Joint Economic Committee, illustrates the range of seniors’ dependence on Social Security benefits:
Tweet of the Day: The Black Hole of Big Pharma
Billionaire John D. Arnold, a former energy trader and hedge fund manager turned philanthropist with a focus on health care, says Big Pharma appears to have a powerful hold on members of Congress.
Arnold pointed out that PhRMA, the main pharmaceutical industry lobbying group, had revenues of $459 million in 2018, and that total lobbying on behalf of the sector probably came to about $1 billion last year. “I guess $1 bil each year is an intractable force in our political system,” he concluded.
Warren’s Taxes Could Add Up to More Than 100%
The Wall Street Journal’s Richard Rubin says Elizabeth Warren’s proposed taxes could claim more than 100% of income for some wealthy investors. Here’s an example Rubin discussed Friday:
“Consider a billionaire with a $1,000 investment who earns a 6% return, or $60, received as a capital gain, dividend or interest. If all of Ms. Warren’s taxes are implemented, he could owe 58.2% of that, or $35 in federal tax. Plus, his entire investment would incur a 6% wealth tax, i.e., at least $60. The result: taxes as high as $95 on income of $60 for a combined tax rate of 158%.”
In Rubin’s back-of-the-envelope analysis, an investor worth $2 billion would need to achieve a return of more than 10% in order to see any net gain after taxes. Rubin notes that actual tax bills would likely vary considerably depending on things like location, rates of return, and as-yet-undefined policy details. But tax rates exceeding 100% would not be unusual, especially for billionaires.
Biden Proposes $1.3 Trillion Infrastructure Plan
Joe Biden on Thursday put out a $1.3 trillion infrastructure proposal. The 10-year “Plan to Invest in Middle Class Competitiveness” calls for investments to revitalize the nation’s roads, highways and bridges, speed the adoption of electric vehicles, launch a “second great railroad revolution” and make U.S. airports the best in the world.
“The infrastructure plan Joe Biden released Thursday morning is heavy on high-speed rail, transit, biking and other items that Barack Obama championed during his presidency — along with a complete lack of specifics on how he plans to pay for it all,” Politico’s Tanya Snyder wrote. Biden’s campaign site says that every cent of the $1.3 trillion would be paid for by reversing the 2017 corporate tax cuts, closing tax loopholes, cracking down on tax evasion and ending fossil-fuel subsidies.
Read more about Biden’s plan at Politico.
Number of the Day: 18 Million
There were 18 million military veterans in the United States in 2018, according to the Census Bureau. That figure includes 485,000 World War II vets, 1.3 million who served in the Korean War, 6.4 million from the Vietnam War era, 3.8 million from the first Gulf War and another 3.8 million since 9/11. We join with the rest of the country today in thanking them for their service.
Chart of the Day: Dem Candidates Face Their Own Tax Plans
Democratic presidential candidates are proposing a variety of new taxes to pay for their preferred social programs. Bloomberg’s Laura Davison and Misyrlena Egkolfopoulou took a look at how the top four candidates would fare under their own tax proposals.
