Strengthening Social Security--what do Americans want?

[eridani]

Strengthening Social Security--what do Americans want?

http://www.nasi.org/sites/default/files/research/What_Do_Americans_Want.pdf?

Americans value Social Security, want to improve benefits, and are willing to pay for the program.
■ Americans don’t mind paying for Social Security because they value it for themselves (80%), for their families (78%), and for the security and stability it provides to millions of retired Americans, disabled individuals, and children and widowed spouses of deceased workers (84%).

■ 84% believe current Social Security benefits do not provide enough income for retirees, and 75% believe we should consider raising future Social Security benefits in order to provide a more secure retirement for working Americans.

■ 82% agree it is critical to preserve Social Security for future generations even if it means increasing Social Security taxes paid by working Americans, and 87% want to preserve Social Security for future generations even if it means increasing taxes paid by wealthier Americans.

Americans support a package of changes that eliminates Social Security’s financing gap while improving benefits.

The trade-off analysis conducted for this study shows that, rather than maintain the status quo, 71% of Americans would prefer a package of changes that increases Social Security revenues, pays for benefit improvements, and eliminates more than 100% of the projected financing gap.

The preferred package would:

■ Gradually, over 10 years, eliminate the cap on earnings that are taxed for Social Security. This would mean that the 5% of workers who earn more than the cap ($110,100 in 2012; $113,700 in
2013) would pay into Social Security throughout the year, as other workers do.

■ Gradually, over 20 years, raise the Social Security tax rate that workers and employers each pay from 6.2% of earnings to 7.2%. A worker earning $50,000 a year would pay about 50 cents a week more each year.

■ Raise Social Security’s basic minimum benefit so that someone who paid into Social Security for 30 years can retire at 62 or later and not be poor.

■ Increase Social Security’s cost-of-living adjustment (COLA) to more accurately reflect the level of inflation experienced by seniors.

This package would entirely eliminate Social Security’s projected financing gap and provide additional funding. The package is preferred over the status quo by large majorities of seniors in the so-called Silent Generation, born before 1946 (76%); Baby Boomers, born from 1946 to 1964 (71%); and younger Americans in Generation X, born from 1965 to 1979 (73%) and Generation Y, born in 1980 and after (67%). See Figure 1.

[LWolf]

1. Americans, then,

need to start voting for politicians who will support what they want.

[bigapple1963]

2. if you get rid of the cap

what happens to benefits?

[exboyfil]

3. I would argue for an equitable solution

Eliminate the cap but collect less of a percentage on those dollars (such as 4.2%/4.2% instead of 6.2%/6.2%). The benefits base calculation remains the same (in effect the extra dollars do not up the benefits, but on the other hand the net effect to higher earners is similar to those who currently pay in between approximately $50K and $105K who only get 15% applied to their benefit formula).

I am not in favor of the other proposals though. In particular raising the percentage to 7.2%/7.2%. Again a matter of equity - most seniors have paid far lower than the current 6.2%/6.2% and where is this going to end. Young people should get some representation as well.

If you push to increase withholdings and benefits, you are going to lose any discussion. S.S. should represent a guaranteed floor on income and not a complete pension program.

[eridani]

4. It will have to represent a complete pension program for the majority

That's all there is. $50K in the average 401K is utterly meaningless, and defined benefits pensions are really scarce.

[bigapple1963]

8. how's that equitable

to those who have to pay much more but get much less out of benefits?

[libtodeath]

10. Your concern for the rich is noted

[exboyfil]

13. Because it treats those earning over $105K

income the same as those between $50 and $105K (or at least tries to approximately). Consider the funding formula for S.S. It is broken up in three tiers of income. These numbers are approximate but they communicate the general trend:

The first $9,000/yr. is calculated at 90%
From about $9K/yr to $50K/yr is calculated at 32%
Above $50K/yr to $105K/yr is calculated at 15%

Right now our system says that if you earn more than $105K your obligation to support the lower earners is gone. The system runs on the backs of those earning between $50K to $105K and that is not fair.

Some scenarios. One guy earns $105K for 35 years and the other guy earns $1M for 35 years. Both will get a S.S. of approximately $30K/yr and both would have paid in $456K between employee and employer. For the guy making $105K the $456K represents 12.4% of his income. For the guy making $1M it represents 1.3% of his income. A third earner at $50K for 35 years gets $21K/yr. for $217K in contributions (12.4% of his income as well). So for the extra $239K the $105K earner gets an additional $9K/yr.

Lets say the $1M gets the same 15% and same withholding. Then $4.34M would be withheld and the benefit would calculate to $164K/yr. My proposal would be to withhold only $3.09M and retain the same benefit as the $105K earner ($30K/yr).

Approximate S.S. Payback (assume 10 year payout)

$9K earner $39K withheld, $81,000 over 10 years, 2.1x
$50K earner $217K withheld, $210,000 over 10 years, 0.97x
$105K earner $456K withheld, $300,000 over 10 years, 0.66x
$105K earner for income over $50K, $239K withheld, $90,000 over 10 years, 0.38x

[libtodeath]

5. I would add that there should be a SS tax on capital gains over a certain amount

then the Rmoneys of the world will be paying in a fair share too.

[bigapple1963]

7. why?

Capital Gains don't count when calculating benefits so what's the reason in taxing them?

[libtodeath]

9. Because it for all purposes allows some fat cats to opt out of the system

they make their riches on investment gains,often at the expense of average workers and their 401ks while still being eligible for SS benefits that in the end they dont even need.
It is no different then taking the cap off of straight income.

[bigapple1963]

11. So do you think

that Social Security Benefits should also be calculated off on capital gains?

Or do you think that whatever taxes paid on capital gains should just be forfeited?

[libtodeath]

12. I think the system needs to be funded so that the millions of average

joes can have a decent retirement.
I dont give a fuck if someone with millions of dollars doesnt get the fair share you are worried about.

[RC]

6. How about starting with getting our Living-Wage-Jobs back into this country?

That is the [font size="6"]BIGGEST[/font size] cause for this Republican talking point. The so called Social Security "shortfall".

We have at least 25 years and more likely, 30 years before Social Security is actually in trouble. Why the panic now?