July 21, 2011

MEANS-TESTING IS THE DEATH KNELL:

Why US should not pay Warren Buffet's Social Security and Medicare (Sam Thompson, July 20, 2011, CS Monitor)

Specifically, I set out the following phase-out proposals:

The Social Security benefit should be phased out incrementally as individuals move from $75,000 of annual retirement income to $175,000.

To participate in Medicare, retired persons should be required to pay an increasing portion of the premium covering the costs of Medicare benefits as they move from $75,000 of annual retirement income to $175,000.

As with the proposal Congressman Paul Ryan (D) of Wisconsin has made to reform Medicare, these phase-out provisions in general would only apply to people who are presently younger than 55. Also, the thresholds for the phase-outs would be annually adjusted for inflation and would reflect at the time the provisions become law the inflated value of $75,000 and $150,000 in 2011 dollars.

The Social Security phase-out proposal is similar to the phase-out for such payments under Canadian law. The Canadian phase-out (what Canadians call a claw-back), which was enacted many years ago, is not considered controversial and is generally accepted as fair.


Posted by at July 21, 2011 6:51 AM
  

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