Bill Clinton Had Already Started Means Testing Social Security:

[amborin]

A sly tax

A second change during the Clinton administration created another level of tax on benefits. This increased the percentage of benefits subject to taxation from a maximum of 50 percent to 85 percent.

From the start it was a sly tax.

In its first year, it was expected to affect only 3 percent of all retirees. The formula for the taxation of Social Security benefits, however, is one of the few items in our miserable tax code that is not indexed to inflation.

As a consequence, an estimated 30 percent of all retirees now pay some amount of tax on their benefits.

Ultimately, that tax will take back much of the benefits that accrue above the second bend point for higher-income workers. In other words, most of the employment tax paid on wages over about $55,488 a year will bring little benefit to workers because much of it will be taxed away.

All of this is history. It all happened before our slippery friends in Washington started dealing with “entitlement reform.” Soon they will start talking about changing the formula for future benefits and other sneaky ways to reduce — or further “means-test” — benefits.

snip

http://www.dallasnews.com/business/columnists/scott-burns/20130112-few-understand-that-social-security-is-already-means-tested.ece

[Peace Patriot]

1. They're also dunning Social Security checks for a Medicare "premium."

I'm sorry to say I don't know how that happened. I'd sure like to know, and when I have time, I intend to find out.

That SUCKS.

[scscholar]

2. What's wrong with reducing benefits for the rich?

They don't need the money, and the social security lockbox certainly does need the money.

[doc03]

5. I wasn't aware $25000 a year was rich, I think I will

go order my new Mercedes. Did you read the OP at the start 3% of SS recipients were affected by this tax now it is 30%.

[Human101948]

6. That turns Social Security into a welfare program...

and you know how Americans love welfare programs. It's a right wing proposal to destroy SS. Just like they keep telling younger people that it will not be there for them. It is to drive a wedge between the young and the old and destroy SS.

[doc03]

4. You didn't seem to be aware of this or didn't care until yesterday when I brought it up

but anyway thanks for posting this. Like I said yesterday this has been in effect since 1983 and Bernie has been in Washington
much of that period. Has he ever attempted to have that tax removed or even tried to have the threshold for the tax raised?
Like I said yesterday I withdrew $12000 from my IRA for home improvements last year. I was taxed on the $12000 which I have no problem with but it made 70% of my SS benefits taxable resulting in just under $4000 tax or almost 33% federal tax. At my income level I only fall in the 15% bracket.

[amborin]

7. you brought it up in a reply to an OP I posted, thank you!

But your position still perplexes me.

You are unhappy with what WJC did, right?

And HRC hints that she will continue the means testing process. So you might personally be negatively
affected, based on what you posted about your income yesterday. Her husband certainly did not hesitate
to means test, and you brought this to my attention.

So why would you support HRC?

Your argument seems to be that because Bernie did not un-do what WJC did, you won't vote for Bernie, even though Bernie would not implement more means testing, but HRC will.

[doc03]

9. I will vote for whoever gets the nomination the primary is over in Ohio so nothing I can do about

who gets the nomination in the end. I don't think HRC will ever be president. Sanders hasn't been subjected to decades of attacks from Republicans. Once the Republicans set their sights on him they will beat him like a rented mule. We have the two weakest candidates in my lifetime, the only bright side is the Republicans are even worse. The only way we can win is if the Republicans totally implode.

[amborin]

8. don't think this applies:

Retirees who collect reduced Social Security benefits early often need to take some IRA money to meet spending goals. These retirees could be hit by what's known as the "tax torpedo." This occurs when IRA withdrawals trigger the taxation of Social Security benefits—and push taxpayers into a higher marginal rate. For these retirees, the tax torpedo can last a lifetime.

By holding off on Social Security and living on IRA income in those early years, you could receive a larger government benefit later, thus reducing the amount of taxable income you'll need from your IRA. The smaller IRA withdrawals could also increase the likelihood that Social Security benefits will remain tax free.
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The biggest beneficiaries of this strategy are retirees with portfolios of between $200,000 and $600,000, according to research by William Reichenstein and William Meyer, principals of consulting firm Social Security Solutions. For these retirees, Social Security represents a larger share of retirement resources than wealthier retirees, so delaying could have a stronger impact on a portfolio's longevity.

To avoid the tax torpedo, retirees who are developing an income plan must understand how IRA income and Social Security benefits are taxed. Every dollar withdrawn from a traditional IRA is taxed at ordinary-income tax rates. But James Mahaney, vice-president for strategic initiatives at Prudential Financial, says that Uncle Sam "treats Social Security income at a preferred rate": At least 15% of benefits and as much as 100% is tax free—depending on your total income.
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In addition, Mahaney says, the formula that determines whether Social Security benefits will be vulnerable treats those benefits more favorably than IRA income. While 100% of IRA distributions count as "provisional income" for deciding what percentage of benefits will be taxed, only 50% of benefits are cranked into the formula. (Provisional income is adjusted gross income plus any tax-free interest income and 50% of Social Security benefits.)

For a single retiree, up to 50% of benefits are taxable if provisional income exceeds $25,000. When provisional income exceeds $34,000, up to 85% of benefits are taxable. The thresholds for joint filers are $32,000 and $44,000.

As rising provisional income pushes more of your benefits into the taxable realm, your effective tax rate can soar. For higher-income beneficiaries, an extra $100 of income—or IRA distributions—can make $85 of benefits taxable. Taxing $185 at 25% costs you $46.25, the same as taxing your extra $100 at 46.25%.

You may be able to ease the pain by reducing the amount of provisional income that exceeds the thresholds. Because only 50% of Social Security benefits are included in the formula, you can pour twice as much Social Security income than IRA income into the formula before hitting the threshold.

Delaying benefits will get you a higher benefit amount later, and that can reduce the need for IRA income. By tipping provisional income toward Social Security income, you can reduce or eliminate the likelihood that your benefits will be taxed.

Consider this example from Mahaney. The Smiths and the Jacksons are 72-year-old couples who each have $69,000 in income. The Smiths, who claimed their Social Security early, take $45,000 from an IRA and collect $24,000 in benefits each year. The Jacksons, who delayed claiming, get $39,000 in benefits and take just $30,000 from their IRAs.

The Smiths' provisional income is $57,000 ($45,000 and $12,000); the Jacksons' is $49,500 ($30,000 and $19,500). Because the Smiths have more IRA income than the Jacksons, they have more income exceeding the tax triggers and a higher adjusted gross income. Assuming a 25% federal income tax rate, the Smiths will pay $6,060 in taxes each year, compared with $2,854 for the Jacksons.
Extend the Life of Your Portfolio

The extra tax tab could have a big impact on a portfolio's longevity, according to a study by Meyer and Reichenstein. Taking large withdrawals from an IRA in later years can significantly boost the tax bill—and shrink a portfolio. If you are in the 25% tax bracket, for instance, you will need to take $1,000 to raise $750 in income. (Kiplinger's has partnered with Social Security Solutions to help readers maximize lifetime benefits. Go to kiplinger.socialsecuritysolutions.com.)

The researchers offer this example of an individual who has $700,000 in an IRA when he retires at 62. Starting at that age, he needs after-tax income of $36,150, which is adjusted for inflation over a 30-year retirement. (His portfolio grows at an inflation-adjusted 1.2% a year.) He is due $18,000 a year in Social Security benefits if he collects at his full retirement age of 66.

If the retiree starts collecting at 62, he will receive a reduced lifetime benefit of $13,500 a year, and he will need to make up the $22,650 balance with IRA withdrawals. His portfolio will barely last 30 years, the researchers note. If he delays until 66, his portfolio will last an extra four years. Delay until 70 and his portfolio will last an extra ten years. (If he doesn't believe he will live that long, he can instead boost his annual spending by $3,600.)

In this scenario, claiming early causes multiple costly problems. The reduced benefit means the retiree will have to withdraw more from his IRA, and since every dollar withdrawn is taxed, he'll have to withdraw even more to cover the tax bill. "It's a double whammy," Meyer says. "You are getting reduced Social Security benefits, and because you need to withdraw more from your tax-deferred account, it kicks up your provisional income and more of your benefits are taxable."

By delaying until 70, the retiree gets an extra $10,260 in benefits than if he had claimed at 62. He reduces his taxable IRA withdrawals. And by substituting Social Security income for IRA income, his provisional income is lower. The result: a smaller tax tab on his IRA withdrawals and benefits.

http://www.kiplinger.com/article/retirement/T051-C000-S004-tap-an-ira-early-delay-social-security.html

[BernieforPres2016]

10. Bill Clinton & Gingrich had a stealth plan to start privatization of Soc Sec in 1998

They had the plan laid out, according to "Listen, Liberal" by Thomas Frank, who cites the 2008 book "The Pact" by historian Steven Gillon. Clinton was to start hinting at it January, 1998. Various groups would start a "dialogue" about changes to Social Security. Clinton and Gingrich would keep the issue off the table through the 1998 mid term elections and then enact changes in December, 1998, when nobody could hold them accountable. Clinton started the process with his January, 1998 State of the Union speech when he said Congress should use the budget surplus to "save Social Security first". But shortly afterwards, the Monica Lewinsky scandal hit and that finished off the Clinton-Gingrich plan.

So whatever you might think of her, we can probably thank Monica Lewinsky for stopping Wall Street from getting its hands on the Social Security trust fund.