Real Estate Investors Pay No Social Security and Medicare Taxes?
“Now, what about Social Security and Medicare taxes? Well, my friends, we don’t pay those either, ever. Why? Because those are ignorance taxes. You see, what do I mean by ignorance taxes? You have to pay to be ignorant enough to have a job to pay earned or to pay ignorance taxes. Social Security and Medicare are taxes that were derived by the US government because it realizes the people were ignorant enough to believe that if they can work for the rest of their lives and ignorant enough to believe that they are going to have health insurance the rest of their lives, not realizing that someday along the way, like with everybody as you get older, there are people out there that are younger, they are better educated, they are more motivated, they work for less money, and they are going to take your job.
And when that happens, when you’re pushed out of your job at some elderly age, you’re going to realize for the first time that you have no passive strings of income and you’re going to be in trouble.
You’re also going to find out that your insurance policy is getting away and that’s going to be a problem because now, it’s hard for you to get insurance as an older person, especially unemployed, let alone the thought of paying for it.
So, my friends, they created something called ignorance taxes, which is this social safety net for people to fall on when they become old and unable to work and unable to obtain insurance. We call this Social Security and Medicare.
Now, why do they not tax real estate investors? Because they realized that if you’re smart enough to figure out how to make passive strings of income that you don’t have to work for, that you’ll never lose a job that you don’t have, and that the income you earn is going to continue to come whether or not you’re old or young and so you’re going to be able to afford to buy health insurance and not have to cancel your health insurance policy when you lose your job. Read more
Suspend Social Security Taxes for One Month
In a blog post to the Wall Street Journal’s website, Amitai Etzioni has offered a proposal which he feels could stimulate the economy without increasing the federal deficit.
The plan proposed by Etzioni is simple: Social Security taxes should not be collected for a month by the government. Collect the taxes of this one month only after the economy shows signs of improving. To lend credibility and avoid vagueness, legislation can be passed by the administration which dictates this one month’s tax to be collected only after the GDP grows consistently at a rate of 3% or more for an entire year. This measure of not collecting the taxes should be repeated until a favorable outcome in terms of GDP is achieved.
One of the main merits of this proposal is its revenue neutrality approach. Also, it can be implemented at a short notice due to which the funds will immediately reach all the classes of people.
However, certain precautions have to be exercised while implementing this program. Payroll taxes especially those collected for Medicare should be spared, as Medicare is even more endangered than Social Security.
Also, the Social Security fund will stand to loose the interest it collects on Treasury bonds which it could have otherwise purchased. Nevertheless, considering the potential gains of this program and the current dismal short term interest rates, this flaw should be overlooked.
The need of the hour is therefore a tax cut or government outlay which can automatically be recaptured when the economy starts growing healthily.
Social Security Tips: Taxes on Social Security Benefits
“Social Security was first started by Franklin Delano Roosevelt, one of our greatest presidents in the United States, and it was meant as a benefit, not to be taxed to the American public. However, basically in the ’80s, 1981, taxes occurred at a 50% level when individuals met certain benchmarks, and in 1993 under the Clinton Omnibus Reconciliation Act, American taxpayers who made over $44,000 a year are taxed at 85% of their Social Security benefit; that’s where most individuals currently sit.
There are ways to avoid this if you use appropriate investments such as annuities and things of that nature, and working with a financial advisor that knows how to read a tax return is always of great benefit to you. Many senior Americans do not want to be taxed on their Social Security benefit and like Franklin Delano Roosevelt said, “It’s not intended as a tax resource.” This is Patrick Munro talking about the taxes on Social Security benefits.”
http://www.youtube.com/watch?v=XGdhjKZt8tA
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