The capers of Joe “Big Guy” Biden and his globally connected son Hunter are much in the news, a big win for transparency. On the other hand, this story is diverting attention from an issue for voters who are on Social Security or will be soon. They should know that during his 47-year career in government, Joe Biden twice voted to tax Social Security benefits.
According to a verification team that includes Joseph Cordes, professor of economics at George Washington University, prior to 1983, Social Security was not taxable. That year, Joe Biden voted in favor of taxing 50 percent of Social Security, and the measure passed. In 1993, Biden voted to increase the amount of taxable Social Security benefits from 50 percent to 85 percent.
In 2020, this takes on new importance.
Many American workers have lost their jobs and may opt for Social Security at the first opportunity. Their government retirement benefits are subject to taxes, and other surprises await.
At 62, workers get their lowest possible payout, and if they opt to supplement Social Security with work, the government will deduct $1 for every $2 they earn beyond the limit of $18,240. This is hardly a princely sum and it’s also subject to taxes. At full retirement age, 66 years and eight months, the limit is $48,600, not exactly big-time bucks. Workers are better able to perform at age 62 than 66, so if they think the limitations on work income make little sense it would be hard to blame them.
The income limitations, as it happens, are hardly the only problem.
Consider the case of a baby boomer of 1949 vintage. In 2011, at age 61, the 49er was cut loose from his job in a conference call, with no warning or severance. Unable to find a comparable position, he opted for Social Security when he turned 62, but the 49er could only earn about $16,000 before the system docked $1 for every $2 he earned. His former employer’s health plan lasted only a month, so he needed to find new insurance—not an easy task at 61.
Incredibly enough, he found a plan with an HMO for around $300 a month. This worked for him, but the Affordable Care Act nearly doubled the premium. So hard to blame the 49er for opposing Obamacare, which gives you only the healthcare the government wants you to have. Vice President Joe Biden said Obamacare was a “big fucking deal,” but the 49er views it as demolition, clearing the way for full-blown government monopoly healthcare as desired by Hillary Clinton. Too bad the former first lady lost the 2016 election to political upstart Donald Trump.
In due time, the 49er got on Medicare, but he still had to pay for a supplementary plan. Now in his 70s, he may earn as much as possible without penalty to his Social Security. Still, he can’t help but reflect on hard realities.
For example, California government workers can retire as early as age 50 with gold-plated defined benefit plans. In some cases, they can retire and keep on working at a different government job with no penalty whatsoever. For its part, the Federal Employees Retirement System (FERS) provides benefits from three sources, a basic benefit plan, Social Security, and the Thrift Savings Plan (TSP), whose contributions are tax-deferred. For the 49er, this recalls the wisdom of the late Frank Zappa.
Up in Washington, Frank wrote, “they just takes care of number one. And number one ain’t you.” As a matter of fact, “You ain’t even number two.” Whatever happens on November 3, the 49er expects little change in the basic discrepancy, though “Big Guy” Joe Biden’s plan for new payroll taxes to fund Social Security could make things worse. Meanwhile, as the 49er ponders the events of 2011, other tunes come to mind.
After he was cut loose in the conference call, with no warning or severance, the boss forbade remaining employees to write letters of recommendation and took other measures to limit the 49er’s ability to earn a living. If you’ve ever been mistreated, as Buddy Guy and many others said, you’ll know what the 49er is talking about. Still, like the late Gregg Allman, the 49er has “one more silver dollar.” So far, nobody has been able to catch that midnight rider.