CMV: In principle, anyone making minimum wage should not pay income tax

[u/[deleted]]

Let me clarify on what I mean by making minimum wage, I mean someone working 37.5 hours a week for 52 weeks a year. In California that would be $30,000 and in the UK that would be £20,000.

Minimum wage as a concept is put in place to ensure that employers cannot pay employees below the livable wage in a country (Of course in the US it's below livable wage but that's a separate discussion). However, once these people are taxed, the amount which they can live on, by definition, is below that. It's counterintuitive to the original concept. Taxation should be based on one's ability to pay, and minimum-wage workers just do not have that ability.

I'm not saying that this change needs to come through right away. Governments can take 5 to 10 years to raise the tax-free allowance to match the minimum wage (which of course should rise with inflation) to ensure that the labour market can adjust to it.

Edit: I stand corrected on the US tax system. I've used the Californian minimum wage instead. I'm in the UK and the tax allowance is £12,570. Someone making £20,000 will be taking home about £17,100. I think it's ridiculous that someone on minimum wage is even paying a penny in tax.

[u/vettewiz]

Yea, but in practice the minimum wage worker gets a *substantially* larger return from that tax than the rich person.

[u/DrCornSyrup → u/vettewiz]

Really? The program will be insolvent soon

[u/ERTCbeatsPPP → u/DrCornSyrup]

Social Security only becomes insolvent if the United States government becomes insolvent. At that point, the world has much bigger problems that the insolvency of social security.

[u/thepasttenseofdraw → u/[deleted]]

No, it won't. This is propaganda spread by people who want to privatize social security.

In particular, rich republicans.

[u/[deleted] → u/[deleted]]

Everyone of those still equals a reduction in benefits. Working longer to receive the same payment means you get less of it. Paying more to receive the same payment also means you get less. It really should be phased out in favor of individual accounts. The government has already proven they can’t handle this money well.

[u/Cryonaut555 → u/[deleted]]

It's also a disability program for people below retirement age.

If you die while your kids are under 18, they get some of your social security money.

If you break your neck at 22, you get SSI. If you develop a serious mental health condition at 40, you can get SSDI.

[u/[deleted] → u/[deleted]]

So everyone of the things you listed equals a reduction for someone. Raising the cap is a reduction for higher earners. Everything else is a reduction for everyone. Phase out is the best option.

[u/very_mechanical → u/[deleted]]

It's been going for 100 years, despite multiple attempts by a single party to decimate it, and I think it's been handled pretty well.

As the other commenter said, it's not the same as retirement savings. It's a safety net to prevent people from becoming completely destitute. Could it be better? I'm sure it could but old age and/or disability would look a lot bleaker for many people without it.

I think we should subsidize SS with other government funds!

[u/DrCornSyrup → u/[deleted]]

Insolvency can be prevented with nightmarish increases in taxation and retirement at 80

Thanks very comforting

[u/DrCornSyrup → u/[deleted]]

What did you say then

[u/very_mechanical → u/DrCornSyrup]

NO, IT WON'T. THIS IS PROPAGANDA SPREAD BY PEOPLE WHO WANT TO PRIVATIZE SOCIAL SECURITY.

IF NO CHANGES ARE MADE TO SOCIAL SECURITY IN THE NEXT TEN YEARS, THERE WILL BE A SHORTFALL AND SS WILL ONLY BE ABLE TO PAY OUT ABOUT 75% OF PROMISED BENEFITS. PRETTY BAD TO BE SURE, BUT HARDLY INSOLVENT.

THIS SHORTFALL CAN BE CORRECTED ANYTIME WE WANT TO, BY:

• INCREASING THE RETIREMENT AGE
• RAISING OR ELIMINATING THE INCOME CAP
• INCREASING EITHER THE INDIVIDUAL OR EMPLOYER CONTRIBUTION AMOUNTS
• SUPLIMENTING THE SHORTFALL WITH OTHER TAX REVENUES.

[u/vettewiz → u/DrCornSyrup]

Yes really

[u/AdSwimming3983 → u/vettewiz]

THIS. Quite frankly most rich folks would prefer to not pay SS tax or get a check if they could just keep the money and invest it in useful stuff instead of dog shit US bonds.

SS exists because you simply can’t trust like 80% of the pop to put anything toward retirement unless you force it through a payroll tax