Raise the Social Security cap - over $173,000 per year

[Aerows]

That's the salary of a Congressman. Oh, you mean they might have to feel the blow to keep Social Security and Medicare financially sound? They might have to pay more taxes and take a minor pay cut? OMG. That would be unbelievable. Unspeakable. If you work all of your life at 40,000 a year, you deserve to pay into the system, and then wonder if it will remain solvent (which it will, that's just because Wall Street wants it). If you work 4 years out of your life and make $173,000 a year with platinum health insurance, well, you should only pay into the system what a person making $108,000 a year puts into it. Because, you know, you write the laws.

Raise the cap, and stop leeching off of the American people while saying SS and Medicare is broke.

[Betsy Ross]

1. NO CAP!!!! n/t

[Aerows]

2. Even better

But at least past what Congressmen make. Jeez. It's a no-brainer.

[Incitatus]

6. +1!

[daleanime]

27. +a whole lot.....

[Aerows]

3. I know I sound like a broken record

and started a thread like this before, but it pisses me off that people making that much a year refuse to raise the cap (or lift it entirely) because it will affect them and theirs. If you represent us, you need to abide by the same things we do, like paying the same into the fund that we do.

[joeglow3]

4. What good does that do?

SS payouts are based on what you paid in. This, people will just get bigger SS checks. That doesn't make it solvent.

[Aerows]

5. Oh my

I have a live one, here.

[joeglow3]

7. And your response explains everything.

[Aerows]

8. As does yours n/t

[joeglow3]

11. Facts can be pesky, huh?

Yes, my post says I am interested in a discussion. You have made it clear you hate discussions.

[Aerows]

13. Clearly I hate discussions

since I'm on a discussion board. And there is a maximum limit to benefits as has been pointed out a few times, but let me point it out again.

[joeglow3]

14. A maximum benefit that is based on earnings

Remove the cap in earnings and you removed the cap on payouts. This is not rocket science.

[Mariana]

19. If they can rewrite the law to remove the cap on income subject to the OASDI tax

they can also rewrite the law that determines how benefits are calculated This is not rocket science, either.

[joeglow3]

20. And now you turned social security into a welfare program.

That will be the meme and watch it get gutted then.

[daleanime]

29. ........

Those who want to gut it already want to. No excuse needed.

[joeglow3]

30. Wow.

Of course those who currently want to gut it currently want to gut it. And they do not have numbers of any substance. However, change the rules like you propose and you will see those few that you are citing able to gain traction with larger numbers.

[TheKentuckian]

36. You think the rate of return is equal now? The more you put in the more you get but

not necessarily at the same rate. A set of formulas resolves all concerns except keeping the upper class and wealthy from contributing to society commiserate with their resources instead of shifting the weight down to the working class with the "left" relieving their guilt by kicking down some crumbs on the very bottom of the shit pile financed by those with a few dollars more in a fashion that would make Wally World proud.

This isn't hard, people want to make it hard for their own purposes or due to bizarre binary logic.

[tkmorris]

9. There is a maximum benefit Joe

Anyone who would be affected by a raised cap on taxable income would not see their benefit rise, as they would already be bumping against that ceiling.

Edited in accordance with prophecy.

[joeglow3]

10. Actually, there isn't.

The benefit is calculated on earnings, which are currently capped. Remove the cap and you remove the cap on benefits. And the nature of this calculation has been something democrats have long since championed.

[tkmorris]

32. I may be mistaken

I will look into it further. Actually I just did look into it further and you are correct that increased taxable earnings DO increase the benefit. However the benefit is progressive, in that it is calculated at a lower percentage as certain taxable income levels are passed. This means that raising the cap will generate a net positive in contributions to the fund versus the outlay in benefits.

[Aerows]

12. I loved your last sentence

Because you can repeat it over and over again, and some just won't get it.

It was written.

[FogerRox]

15. There is no cap on benefits, benefits are calculated from earnings

and earnings are capped @ $113,700, in 2014 it will go up to $117,000. This will create a 1.5% benefits increase (COLA).

Google AIME & bend points & PIA

[FogerRox]

16. After paying for larger benefits, there should be some leftover

The CBO scoring 2 years ago showed that raising the income cap to 90% of earnings, then about 180k, would generate about 25-30 billion for the trust fund, after paying for larger benefits.

And you're entirely right, SS benefits are based on earnings, at retirement the 35 best years are used. People have great plans for fixing SS, but don't know much about SS.

[SheilaT]

24. I'm under the impression that there's a cap on the payout, and that

the maximum SS check does not go up proportionately for workers whose income is at above the maximum, currently $110,100 according to the SS website.

In other words, SS benefits lower income workers more than it does higher income workers. Which is nice.

[joeglow3]

25. SS payouts are based on your 35 highest earning years

Thus, payouts are based on earnings. If you remove the cap on earnings (currently the number you cited) you then remove the cap on payouts.

[SheilaT]

34. So just raise the cap a whole lot.

I got that language about the maximum payout not going up proportionately from one of the sites I looked at before I posted my comment above. Now, I can't figure out exactly where I was, or I'd post the link.

But I recall reading quite recently that the nice thing about SS was that lower and middle income workers actually tended to benefit the most.

I also knew someone a few years ago who was staying in a job she hated because she thought her SS would be based on the most recent five years of earnings, somewhat the way some pensions are figured.

I've also been rather pleasantly surprised at how much my eventual SS check has been increasing since I returned to the workforce about seven years ago, after 25 years not working. I now have 31 years of work history, and it's interesting how much of a difference that makes, even though I'm not earning huge sums. I also had two years, 1977 and 1978 where I earned the maximum taxed then. Each year I had about two paychecks without FICA and it was strange. It also has helped boost my eventual SS. I am now 65, and as tempting as it is to retire tomorrow, I really do need to work at least a year or two longer and delay taking SS at least that long. Between going back to work and delaying actual retirement, my SS payout is going to be double what it would have been had I stayed out of the work force.

[mbperrin]

28. Perhaps some actual facts are in order.

http://www.epi.org/publication/webfeatures_snapshots_20050217/

As you can see, the actuaries have already figured that eliminating the cap solves everything, not that there is a huge problem, not for the next 75 years anyway.

[Hoyt]

17. As much as I want/need my SS benefits to increase, raising the cap won't solve the problems with SS.

And, what is essentially a 14 percentage point tax increase above the current cap will take a bunch of potential funds from other things for which we need to increase taxes -- education, jobs, unemployment benefits, help for younger folks who are really getting screwed nowadays, health care improvement, etc.

What JoeB says is correct, benefits will increase for those who would pay more if cap is increased unless we just say, "screw you, you make more than me so shut up." I don't think that is right.

Now, I don't have an issue with some relatively small increase in taxes on capital gains, wealth, etc., earmarked to shore up SS without changing benefits.

But, it won't have a chance with current legislative makeup.

[TheKentuckian]

37. My Social Security contribution has nothing to do with my tax rate.

To the best of my understanding that contribution is pre - tax, I see no use in conflating the issues.

[Hoyt]

38. If government takes 13% off the top for FICA, that's 13% not available for other things.

No matter how much we despise high income, there really is only so much that can be taxed for one purpose or another, especially at income levels of a couple hundred thousand.

[TheKentuckian]

41. Again, my tax rate has nothing to do with my Social Security contribution

I paid the same percentage when I made 15k and when I made 42k and pay the same rate now.

[Hoyt]

42. But if we needed to increase your income taxes to pay for education, jobs, etc., it wouldn't make

sense to increase your Fica tax first.

[bluestate10]

18. Why not just eliminate it outright? 6% and change doesn't impact a person making

a million or more per year at all. The Cap just screws low paid Americans.

[Hoyt]

21. It's really twice that 6+%. Right, 13% isn't a big deal for someone making a million, but

we are taking about people making a lot less and that money could be better used for education, jobs for young (who'll be paying us old folks' benefits), health care, etc.

[KennedyBrothers]

22. Maybe there's another way...

Instead of changing the cap, institute a 1 percent tax specifically designated for the Social Security trust fund on incomes above $1 million.

Here's more on the idea: http://www.allvoices.com/contributed-news/14959092-fixing-social-security-one-percent-tax-on-incomes-above-1-million-would-bolster-program

[Hoyt]

23. I really think that is the type thing we need to look at, or combination of that

and several similar solutions.

[kentuck]

26. With the extension of the Bush taxcuts for every couple under $450K...?

Do they not get a tax break on SS and Medicare taxes that other folks making up to $113K do not get? Since they do not have to pay on income from $113K up to $450K?

Is that not correct?

In other words, do not those folks making $113K per year pay more than those making 450K per year?

Shouldn't that be more balanced in the tax code? And wouldn't that fix the SS system for the next 75 years or so?

on edit: But then those making more than $450K per year would pay a lower over-all tax rate than those making $450K and below, so we would need to increase their taxes 7.5% just to have a flat tax across the board, and the Social Security and the deficit problem would be solved.

[cherokeeprogressive]

31. Agreed, with the caveat of a maximum benefit. ALSO... cap the Mortgage Deduction.

No deduction for homes over a certain price or size.

[SheilaT]

35. Ummm, there is a cap on the mortgage deduction.

"interest is deductible on only the first $1 million of debt used for acquiring, constructing, or substantially improving the residence . . . or the first $100,000 of home equity debt regardless of the purpose or use of the loan."

From Wikipedia.

[Old and In the Way]

33. no brainer....nt

[CrispyQ]

39. If Congress thinks SS is in such dire straights, then why don't they pay it back?

Pay Back the Money Borrowed From Social Security

http://www.huffingtonpost.com/sen-don-riegle/post_1901_b_845106.html

According to the U.S. Treasury Department's "Monthly Statement of the Public Debt of the United States" (9.30.10), the total debt was $13.562 trillion and was held as follows:

US Holders of Debt
42.1 % -- US Individuals and Institutions
17.9 % -- Social Security Trust Fund
6.0 % -- US Civil Service Retirement Fund
2.1 % -- US Military Retirement Fund

Foreign Holders of Debt
11.7 % -- Oil Exporting Countries
9.5 % -- China and Hong Kong
6.3 % -- Japan
1.4 % -- United Kingdom
1.3 % -- Brazil
1.6 % -- All other foreign countries

We constantly hear about how much we owe China, but we owe the SS fund way more! They're looting the fund & don't want to pay it back.

[Aerows]

40. Exactly

and then you have those in Congress, flush with cash, that will never decide to pay more in because God Forbid they take a salary cut.