Comment by caspper69 | Hacker News Reader

Comment by caspper69 | Hacker News Reader

Parent Full thread

Excuse me, sir. Please don't just tell me I'm wrong without doing some research.

SS: https://www.ssa.gov/news/press/factsheets/HowAreSocialSecuri...

How is Social Security financed?

Social Security is financed through a dedicated payroll tax. Employers and employees each pay 6.2 percent of wages up to the taxable maximum of $176,100 (in 2025), while the self-employed pay 12.4 percent.

Total income, including interest, to the combined OASI and DI Trust Funds amounted to $1.351 trillion in 2023. ($1.233 trillion from net payroll tax contributions, $51 billion from taxation of benefits, and $67 billion in interest)

US Social Security Expenditures in 2023: $1.351 trillion.

Do you see income taxes in there other than those from recipients?

I won't dirty up this post further, but Medicare is likewise funded; like SS, income taxes on Social Security benefits do go partially to fund Medicare, as those people are generally program recipients. The final funding source is Part A premiums.

I don't mind banter or disagreements, but please do not tell me I'm wrong when you have not even bothered to look. Your gut feeling is not a good basis to dispute someone's premise.

You left out the cost of medicare from that calculation: $1.02 trillion of outlays in 2023 per the CMS (CBO has $800 billion here). Medicare taxes were $350 billion in 2023 per the CBO. Where does the rest of that money come from?

Medicaid is another $600 billion and is also supposed to be supported by the Medicare tax.

Social Security is mostly covered by its ~12.5% regressive tax (an extortionate rate, IMO). Medicare is not. In 2023, Social Security, per the CBO, had a ~$200 billion shortfall also (draining the trust fund), but that's small potatoes compared to the >$1 trillion hole in medicare/medicaid that is being supported by your income taxes.

You linked a nice fact sheet, but the reality as shown by the group who actually oversees where the money goes is a bit different.

The irony here is that nowhere in my original post did I claim there was no commingling of funds.

In fact, I was trying to point out that our taxes were actually HIGHER than most people think due to FICA. Did I say these programs were covered?

My point was that they were taxed separately.

And to answer your question, the dirty little secret of government is that they raid the trust funds. Why else would the trust fund have interest income?

But it's not really from income taxes, it's from raising money through issuing debt.

I was not making the point you thought I was making.

Money is fungible, my friend. A dollar of tax income is equivalent to a dollar of debt.

The trust fund, to be clear, is only for social security. It is not for Medicare.

I should point out for full accuracy that Medicare part A also has a trust fund that is similarly draining (although this one is almost insolvent), but most of the programs in Medicare are not funded by the part A trust.

Final edit: The Medicare trust fund also has a generous contribution from "general revenue" of the government - aka tax dollars.

It's only fungible at the point of expenditure. Tax income is a dollar in hand that creates no liability; debt must be repaid with interest.

Not sure I get your second point- I am aware of what is meant by the trust fund; actually, I thought it was the only one- you enlightened me about Medicare's. (If you re-read my post, you will see my use of the plural "funds" in "trust funds" was referring to the money itself, not multiple funds).

Anyway, I see 12-years of reserves at current projections for the HI (Part A fund for Hospital services), while the SMI (Part B for Doctors and outpatient services) isn't even listed- this fund is the one that seems to be the dog. Wow. And it's not even close. Yowza.

https://www.ssa.gov/oact/trsum

I don't think it's fair to bring Medicaid into the discussion. There's no separate tax for it, and the vast majority of people don't receive it- it's a subsidy to the poor. If you'd like to discuss that I'd be happy to, but I'm more comfortable on fiscal realities than judging what amount to local humanitarian efforts; my opinions might not be well received because they are not particularly generous. Additionally, I think it is far outside the scope of my original point that people's taxes are much higher than they think.

I'll close on this note: I think it's important that people speak in specifics, especially in trying times. Both platitudes and demagoguery are damaging to the public discourse, as is information presented out of context and the substitution of opinion for fact.

I spoke out of my rear-end on Medicaid (you did kind of catch me out of left field), and I generally try not to do that. I did some more digging (unlike SSA, they are not very forthcoming), and I'll take my medicine.

Thanks for the eye opener. Take care.

Reply on news.ycombinator.com