The Savings to Social Security from Means Testing = Higher Costs

[Jeff In Milwaukee]

57. We might be talking about two different things.

Let's assume (and I have no idea that this is true) that Trump has set up an LLC or Sole Proprietorship to deal with his income from books, speaking fees, and television appearances. That is ordinary income and it counts toward his eventual Social Security benefit (passive income such as interest and dividends do not). He would be paying Self-Employment Tax, which is basically Social Security taxes for persons who are self-employed.

When The Donald retires, the taxability of his Social Security benefit depends on all income -- everything. So if and when he collects Social Security, he would be paying tax on 85% of his benefit at whatever rate he pays for other ordinary income. The amount of the benefit and the extent to which it is taxable are two entirely different calculations.

What I'm suggesting is that if you're The Donald and collecting Social Security in retirement, the ENTIRE amount should be taxable and it should be taxed at a higher rate. And I wouldn't be opposed to saying that if you income is above a certain level -- and again I'm talking about people who are massively wealthy, not an elderly retiree living on Social Security and little else -- there should be no benefits at all.