Idea for a Democratic alternative to social security reform

[imenja]

I have a rough idea for an alternative the Democrats could put forward to solve the long term social security insolvency problem.

No private accounts. Instead, drop the cap on income over $90,000 and make the withholding tax progressive. Those with lower incomes would pay less than they currently do: perhaps only 3%, with
another 3% marched by their employers. The scale could increase progressively based on salary, with employers matching the employee amount deducted as they now do. We could make the upper incomes pay no more than the current rate of taxation (I'm not sure what that is now actually. Something over the 7.5% it used to be). Rich people would not have their upper income exempt from the tax.
Payments would be assessed in a way that does not penalize those with lower incomes.
Reactions to this?

[Just Me]

1. Being the advocate for a progressive tax system that I am,...

,...I think your idea is superb and that it would most likely fully fund "the people's" safety system!!!

:thumbsup:

[Tigress DEM]

71. Can someone tell me how raising the cap on SS is viewed as welfare?

In what I have read about it, we already have the welfare of the rich firmly established and raising the cap would take them off the SS welfare roles and make them contribute in the same way the rest of us do?

Also - calling everything that helps the least among us welfare is an elitist jab. Even if it is a good word, it's flame bait.

[beyurslf]

2. Drop the cap and exempt the 1st $10,000 in income from the tax altogether.

[cidliz2004]

69. How about all of the people for this reform simply DO NOT ACCEPT PAYOUTS

FROM SOCIAL SECURITY?

[Tigress DEM]

70. Well, it would bring in the most money from those who can afford it, but..

Probably too radical and people who have huge amounts of money also have huge debts, so such a radical move could do more harm than good.

Even so, those of us in the middle have no choice but to pay so if there was a way to do it, it really might be the most fair approach.

I don't believe in giving welfare to millionaires, but it happens all the time.

[Vincardog]

3. Leave the cap at 90K but place the tax on all income above 200k

Put SSI tax on ALL CEO income Bonuses Retirement and Stock options included. Let the Pigs pay their fair share.

[imenja]

4. so income between 90k and 200K would be exempt?

and all else taxable? Why?

[Just Me]

5. Yeah,...to give a bit more strength to the middle class.

Thing is,...that's a pretty low percentage these days. Prolly better to start the tax at 40K or somewhere around there to GROW a middle class.

[imenja]

6. that particular income exemption doesn't achieve that

Most Americans make far less than 90k a year. These figures are basic on single incomes, not joint incomes for married couples.
Making the tax rate progressive gives breaks to the middle class. Most people will pay less than they do now. So it can be sold as a tax cut for working people. Giving a break for income between 90-200K benefits those making over 90k, not the bulk of what most people would consider the middle class. I like the other poster's suggestion of making the first 10k of income exempt from SS tax. If you earn less than 10k, you can't even afford housing in this country. You shouldn't have to pay 7.5% of that income in what amounts to a flat, regressive tax.

[Vincardog]

16. You are correct. I was just pandering to the folks in the upper part of

the lower upper class. A better Idea would be to EXEMPT THE FIRST 24k.
If you are not living above the poverty line you should not pay. Then have NO CAP at all. Put FICA on all executive pay.

[qwghlmian]

17. So you want to make Social Security into

a welfare program.

[Vincardog]

18. I don't want to make Social Security into anything

we are discussing how to deal with aWoL's fake crisis and the best way to fix it

[qwghlmian]

19. Your idea of best way to fix it was

apparently to turn it into a welfare program.

(Welfare program: you don't pay anything into it, it pays you).

[Vincardog]

20. It is a financial INSURANCE program

People who can afford to pay in do. What do you propose? How regressive do you want it to be?

[qwghlmian]

22. If it is insurance, then people who

pay the premiums pay the insurance. Also, the higher the premium, the higher the payout. That's how insurance works.

Welfare programs, on the other hand, pay out even to people who did not pay anything in.

You understand the distinction, right?

[Vincardog]

23. You do know we are talking about SOCIAL SECURITY right?

It is a SOCIAL program by definition. Insurance by nature spreads the risk. The beneficiaries do not necessarily have to have paid in. They might be the disabled or the survivors of people who paid in. What is your problem with starting the pay in at 24K/Yr and above? Or is your problem with not having a cap? Or do you just want to argue semantics?

[qwghlmian]

24. Social Security was not designed to be

a welfare program. If you want to make it one, I say kill it and create a welfare program. Don't try to change it into what it wasn't supposed to be.

My problem with your suggestion is that you want people who did not pay anything in to get the benefits. That is the definition of a welfare program, which Social Security ain't.

[Vincardog]

25. I never suggested chaining who go the benefits. That is all yours

I was pointing out how to avert the fake crisis. You are the one bringing the welfare stuff to the discussion. The nub of it is some wages are not subject to Social Security Insurance. Currently all wages up to $90,000/Yr are subject to Social Security. That includes all low and middle incomes. The highest incomes are not subject to SSI after the first $90K.

aWoL says we have a crisis. How do you want to fix it?

[qwghlmian]

26. Yes, any wages above $90K are not subject to

FICA - but those people also do not receive more benefits than the people who earn exactly $90K. What exactly about the "the more you pay into the system, the more you get out of it" do you not understand?

If the situation was that the $200K earner would pay the same as $90K earner, but upon retirement would receive more from Social Security, that would be unfair. As it is today, both would receive exactly the same payments from Social Security, because they paid in the same amount. What is it you're objecting to?

[Vincardog]

30. I believe this thread was about

'alternative the Democrats could put forward to solve the long term social security insolvency problem.'

You seem to want to argue the fairness of social spending.

It is not fair that people who pay in more can not get more out.
It is not fair that some fool can get a CEO job because of the school they attended and or family contacts.
It is not fair that this country is pandering to corporate interests at the expense of the people.
It is not fair that the government has forgotten it's duty to provide for the common welfare.


What does the fairness have to do with putting forth an 'alternative the Democrats could put forward to solve the long term social security insolvency problem.'?

[qwghlmian]

32. Simple - because if people you present the

"alternative" to do not think it is fair (and I mean people out there, not the DU people), it won't go far. And what you are suggesting will definitely not be perceived as fair.

[Vincardog]

34. And aWoL's plan to cut benefits and give wall street a few hundred

Billion in commission and management fees is fair? PLEASE.

[qwghlmian]

37. Is this the "his plan is bad, so mine isn't" argument?

How exactly does Bush's plan not being fair make yours fair?

[Vincardog]

39. Why does my plan have to be fair and his doesn't?

Who died and made you the fairness police?

[qwghlmian]

40. If you are presenting an alternative -

I presumed you wanted to present a *better* allternative. Sorry if I was wrong.

[Vincardog]

41. I am sorry. Increasing the income is not better than cutting benefits?

Why should the workers carry all the risk and burden? I here you criticizing but not offering much in the way of ideas of your own. What do you suggest?

[qwghlmian]

44. First of all, you forget that the $90K+ people still pay in

proportionally more than they get back compared to lower income people, so stop the rhetoric.

I would suggest almost full privatization - but without all the stupid bells and whistles that Bush is putting on it. To balance that, make the bottom rung of Social Security (that is, the very minimum payment upon retirement) guaranteed by the government, for everybody, as a retirement welfare program. The first will help sell the second, and you will have both a guarantee that no one will go hungry or live in the street and a way to have people collect retirement money in personal, named, "lockbox" (if you like that word) accounts that no government can loot.

[Vincardog]

66. You were the one arguing against retirement welfare

Full privatization has long been the Republican's goal they have hated Social Security since it lifted its first Senior out of poverty.
I can not support aWoLs plan and yours does not sound much different.

But thanks for sharing what you really think.

[Just Me]

53. You are arguing with yourself? *LOL*

I'll grant you one acknowledgement: you are an "expert" at obfuscation.

Are you happy with that?
Aw, hell, that's a stupid question.
Of course, you are happy doing what you do for everything that you need to be for whatever reasons you need to do whatever you do,...without any responsibility for how you impact everything and everyone around you.

I know you.

[Just Me]

54. testing

[Just Me]

43. Correction

posted to the wrong post,...correcting

[Just Me]

46. It's a "standard" application, perception-manipulation "rationalization".

Who must live up to the highest standards?
Who is HELD to the highest standards?

An EXCELLENT point!!!!

Who is expected to sacrifice the most?
Who actually sacrifices (factually speaking) the most?

EXCELLENT POST & POINT!!! :bounce:

EXCELLENT!!!

[Just Me]

31. Bottom line: you object to those who most benefit fairly CONTRIBUTING,...

,...to the country AND ITS PEOPLE which advanced the possibility of those who most benefitted!!!

Pretty greedy proposition, there.

WELFARE IS NOT A BAD WORD. Look it up.

Should those who most benefit from living in a "capitalist" nation be expected to most contribute to its sustenance and growth?

YES!!! IT'S THE PRICE PAID TO EXACT WEALTH FROM "A PEOPLE"!!!

Do you believe you should GET, GET, GET and TAKE, TAKE, TAKE without any contribution towards that which GIVES, GIVES, GIVES? If so,....you are digging a hole without sustenance,...and you will not survive.

[qwghlmian]

33. Great - tell that to the audience outside of DU

and try to convince them that converting Social Security program to a welfare program is a "good" thing.

[Just Me]

36. Good gawd. Are you telling me ALL AMERICANS are driven by greed?

Is your opinion that this whole country is driven by greed?

If so, I object!!!! That suggestion would be beyond ANTI-AMERICANISM,...it would be,....damn,....it would be a hopeless position on any human being.

[qwghlmian]

38. You may object -

but you'd still fail if you tried to sell creating another welfare program to most Americans today. Guaranteed.

[Just Me]

42. Since when has the welfare of our nation, our people become an "evil".

Weirdest (fascist) bullshit I've ever observed.

Fine,...let's call "welfare" (for the sustenance and strength of both our people and nation) another word.

Let's call it "MISSION: PROGRESSION"!!!

Since "welfare" has been redefined by the power-mongering consumptionists as a BAD WORD,...let's choose words which captures something ALL HUMAN BEINGS SHARE outside the power-mongering spenders of blood and public treasure!!!

Whaddya' think? :bounce:

[qwghlmian]

45. I don't know if you're serious - but

let's do an experiment:

1. Go out in the street and buttonhole 10 average people. Ask them if they would like it if Social Security became a welfare program. (Use those exact words, do not add anything else. You know this is how it will be presented to most people in a 10 second soundbite). Record the responses.

2. Go out in the street and buttonhole 10 average people. Ask them if they think that "MISSION: PROGRESSION" is a positive term, or whether they actually think they know what it means. Record the responses.

Please tell us what you observe. I would guess the responses would be 9:1 "no" for the first question, and bewildered stares for the second one.

[Just Me]

47. Do you believe YOU possess the whole reflection of humanity?

If so,...I would STRONGLY RECOMMEND that you walk among those who are NOT WITHIN YOUR SMALL WORLD.

If you would be so self-initiated to do so, with a grain of acceptance,...I PROMISE,...you will find only one race,...the human race.

[qwghlmian]

48. So you're saying you don't want to do

the little experiment I suggested?

[imenja]

50. qwghlmian is right on one key point: welfare is a losing cause

Social Security cannot be conceived of as a welfare system if it is to survive. It's universality has been what has allowed it last since the New Deal when so many other social programs have been decimated. Bush is now trying to destroy it, but he is unlikely to be able to do so. Welfare is easily challenged by Republicans. Qwghlmian, I'm certain, is right that most Americans resent the concept of welfare. He is presenting a point of view to which we must pay attention. To expect the entire country to think like leftist Democrats on DU is a recipe for failure. What I dispute, however, is the proposal I outline constitutes welfare. I describe that point further in posts 28 and 49. It is important that we not defend the system as a welfare one. We must refuse to allow Republicans to frame it as such. Language is crucial in politics.

[Tigress DEM]

65. But 200K earners aren't hit with FICA on 100% of their income -

Thus, they aren't paying in purportionately with the rest of us.

Those making more money if they contributed the same FICA rate the rest of us do would contribute quite a bit more into SS which would make it easier to create solvency.

If you have more money to work with, without having to go out and spend money to finagle it, then the cost ratio of fixing the problem doesn't contribute to making even less money available to solve the problem.

So there are 2 prongs to this approach, not spending money to fix something that isn't broken and getting more money into a system that works.

The "we have to spend money to fix something" is what traditional repubs call administrative overhead and was supposedly what their party was against.

Putting more money into programs that work is like investing in a sound business, that simply needs more capital to get the job done on a broader scale.

The baby boomers are putting us in a situation like a traditional business's "break through" stage where most businesses go bust. However, those who keep their wits about them and find out how to keep up the good things they are doing and convert it to a larger scale succeed.

Something that kills social security benefit effectiveness is inflation. I don't claim to be an expert on that aspect of finance, but common sense says that this administration's adding to the defecit and running up war bills doesn't help. Although I'm not sure exactly how it translates to inflation. As an individual I know if I spend more than I have consistenly I'm only hurting myself.

And general bad financial practise can't be forever hidden by paying millions to propoganda machines to tell everyone what to fear and what's OK for US.

Losing 8.8 Billion dollars in Iraq without a trace... when your government lies to you consumer confidence goes down and in a capitalistic society that can crash the stock market.

The FIX the chimp is talking about is only smoke and mirrors to not have to pay back what they have borrowed against social security and they THINK they can blindside us with it all the while telling us to not look at the man behind the curtain stealing our money.

[imenja]

28. How about corporate welfare for Wall Street?

Bush wants to turn it into yet another opportunity for corporate welfare. He wants to use our tax dollars to subsidize the wealthiest of Wall Street investment firms.

Retirement Payments from social security, I believe (and I would appreciate any correction here), depend on how much one pays in, but for some reason the program exempts the wealthiest Americans. Why should that be? It is meant to guarantee a certain, subsistence standard of living for our nation's elderly, so we don't have hundreds of thousands of Americans roaming the land without food or shelter as we had in the 1930s. It is intended to provide a social safety net. If we did nothing else, eliminating the $90,000 cap would solve the insolvency problem and create a large surplus. We wouldn't need to collect as high of a percentage as we currently do, so exempting the first x amount of everyone's income would be a very likely possibility. I think $24 k may be too much. $10-15 k might be better. But everyone would have that level of their income exempted, not just the poorest. So rather than exempting only the income of the wealthiest Americans, we exempt a certain amount from all Americans. It is much fairer. If you only earn $10 k a year, you can't even afford housing in our country. Do you really begrudge those very poor Americans the 7.5% of their gross income they now pay?
An indexed system seems fairer to me. It would remain a guaranteed insurance program. Everyone would be guaranteed a certain base level of payments during retirement. Depending on how the financing of the fund works, it might be possible to increase retirement payments in relation to how much someone pays into the fund beyond the minimum payment, but no American who has spent his or her life working should be forced into desperate poverty in their old age.

Do you realize Bush's proposal only privatizes contributions, channeling them through private funds, and not payments during retirement? The government continues to determine how much an individual draws out, the level of benefits, and when he or she can receive them. I have never been one to oppose the very concept of privatization. If I were able to add those payments to my TIAA-Cref account, I might like that. I would not, however, approve of such a system for social security if it meant I profited at the expense of other Americans who would live in poverty. In my TIAA-Cref fund, I distribute my contributions between guaranteed funds and equity funds. I have full control of the fund and take it with me when I leave my current position. That, however, is not how the Bush proposal works. Americans will not control that money like private retirement funds. It is the worst of both worlds. It creates a system of profit for Wall Street, yet the government retains control of retirement payments. It also greatly increases insolvency problems, because it will add trillions to the imbalance between contributions and payments. I can't see that this helps anyone but Wall Street investment firms and the conservative ideologues who want to see the system bankrupt and abolished.

[qwghlmian]

35. As soon as you have people who have not paid

*anything at all* of very little into the system get benefits that are the same as for people who paid much more in, it becomes a welfare program. Try to sell creating another welfare program to people - I'd like to see that.

The above-90K income is exempted, but those people do not get more benefits than the people who earn 90K. You pay the same, you get the same. If you make them pay more, you will have to give them more when they retire, as well. Do you really want to start paying $50,000/month checks out of Social Security fund to some people?

Yes, Bush's proposal is not true privatization, and sucks. That does not justify trying to convert Social Security into a welfare program.

[imenja]

49. there is already a differential

In the current system, the percentage is the same for all contributions up to 90K, but obviously those who earn more pay more. Why not make it a system that is solvent and fair rather than one that benefits the wealthy at the expense of the poor? We also have an opportunity to change the terms of how benefits are paid out. Nothing now, it seems, is fixed in stone. It needs to remain an insurance program, because Americans have in recent years rejected welfare. I dispute your contention that the system I have suggested is welfare. The system as it exists now is not a simple correlation between contributions and payment. It contains inequalities. Lifting the $90 K cap provides a level of funding that would allow for a drop in the rate at which earnings are taxed. As I pointed out, an exemption for the first x amount of income benefits all of us, not just the poor. There are very few Americans who spend their entire lives earning less than $10 k a year. Almost everyone will contribute to the fund. And if they really are that poor, they should receive welfare, perhaps from another funding source rather than social security.

I would welcome any suggestions you might have on to improve the proposal.

[qwghlmian]

52. If the exemption is kept low -

so that nobody really pays *nothing* - then that is reasonable. $24K exemptions is not - at that level for those people who earn $24K/year and less, Social Security becomes a welfare program.

I don't think Social Security can continue existing as is. What I would suggest is gradually converting it over the next 20-30 years so that in the end it is eliminated and replaced by "forced retirement savings" program with personal, named, accounts that cannot be looted by the government. During the 20-30 years gradually reduce the SS payments and increase the contributions into the personal accounts, while reducing the SS distributions. In addition to that, make the government fund a guaranteed retirement benefit program, that will complement such personal account if (and only if) the account cannot supply the person with the minimum required to survive. There are, of course, details that need to be worked out about which investments to allow (I would not recommend allowing option play in such accounts) and some restroctions so that people do not just withdraw the lump sum and blow it in one year at 65, then go on the guaranteed program, but I would not expect that would happen a lot. The guaranteed program should be sufficiently unattractive so that there would be incentive to strive not to get on it. There should also be almost no restrictions on where such an account can be placed, so the fees would be kept low through competition.

This is a very rough outline, but I would support something like that. What do you think?

[imenja]

56. a couple of questions

As funds are put into private accounts, how does the government fund current payouts in the program? One of the chief problems with the Bush plan is that it creates a huge deficit as the government loses access to current contributions for funding existing payment requirements. I object to changes that will contribute to our deficit problems. I also think government should be legally prohibited from using social security surpluses to fund other expenses. As you noted, it as intended as a retirement fund. Not as general revenue.

Also, your point: "There should also be almost no restrictions on where such an account can be placed, so the fees would be kept low through competition." I foresee problems here. The current Bush plan authorizes only five funds. I don't know which they are, but I wouldn't be surprised if they aren't the biggest Republican donors.
At any rate, all funds are not equal, and there have been serious problems with mutual funds due to dishonest, greedy executives. This cannot be allowed with our social security money. Funds that want to be part of this federal program should be required to be subject to a level of oversight they do not currently undergo.

I agree the 24K exemption is too high. $10 k strikes me as reasonable. The 90K cap is also too low.

A question about disallowing "option play"? What does this refer to? My knowledge of finance is quite poor. I do know, however, that in my own retirement fund I allocate money between guaranteed funds, real estate, bond funds, and equity funds that are more risky but pay more over the long run. I realized that no matter how conservative-minded in terms of risk I might be, it was simply too risky to invest it all in the guaranteed fund. I would not be able to live on what that fund would generate. I'm not sure if this is what you meant by option play, so my point may be irrelevant here. But investing in equity markets would be the advantage of going to private accounts. If it is simply a guaranteed, fixed fund, what is the point? Moreover, for most of us that wouldn't generate enough money to live on.

[qwghlmian]

58. Let's see -

Since the conversion would be gradual, the new people being retired would be paid less SS and more from their personal account, so the total paid by SS would be reduced slowly (and the FICA payments would be reduced slowly as well) until after 30 years or so both would come to 0. I think there would be some extra expenses to SS fund compared to doing nothing today, but I don't think it would be enormous. This is a back-of-the-napkin thing, though, so I could be wrong.

Oversight - you're right, there would be fairly strict oversight, but I am sure any financial organization could adjust to that if they wanted to be in the business of managing such personal accounts. It certainly should not be just five or six funds, as proposed. Should be hundreds, if not thousands, alternatives.

Option plays - I should have said "derivatives". What you describe are mutual funds and bonds. Next (higher) level of risk are individual stocks. Next (higher) level of risk are derivatives such as options or futures. I don't think the government should be too much of a nanny, but derivatives are mostly prohibited in today's IRAs as well, so I would think they would be prohibited in the personal retirement accounts as well. I presume most people would stick with mutual funds and bonds, and not even go into individual stocks, but who knows. I trust that the fear of being on the "dole" (or, if you prefer, the "guaranteed retirement plan") would push most people towards the safer investments.

[imenja]

64. gradual conversion

Your plan would need to raise revenues early on to make up for the money going into private accounts. Hypothetically, if 5 percent of the fund were converted each year, the government would still be short the money it needs to pay out. Raising the cap could beyond 90k could accommodate that, but a simple gradual conversion, I don't think, would solve the insolvency problems. In fact, it would exacerbate them.
Obviously your plan involves a faith in the market place that most Democrats don't share. Democrats in the House and Senate are united against the concept of privatization. I honestly don't mean to sound insulting here, though it may come off as such, but I would think your idea would have a greater chance of being picked up by Republicans.
My major problem with privatizing Social Security under the Bush administration is that I don't trust them to make it into anything but a boon for their campaign contributers. Nearly every legislation they pass, Medicare reform being probably the most grotesque example, is an opportunity for corporate welfare. I am tired of seeing the tax dollars of hard working Americans going to prop up wealthy corporations.
May I ask what the reasons are for your belief that the private sector offers a better alternative to our present government system?

[qwghlmian]

72. My reason for belief in marketplace

is because I deal very closely with the stock market. I see a lot of efficiency in stock market. I don't see much efficiency in the government's handling of any financial matters.

If your problem with privatizing Social Security is not trusting Republicans to do it right (and judging by the presented plan, your mistrust is well based) - how about we do it right instead?

If the conversion is calculated to require higher outlays to start with - either raise the cap (which will temporarily increase the revenues) or temporarily increase the FICA percentage (with emphasis on temporarily) or both.

[imenja]

74. I object strongly to raising the percentage taxed

As is, it is a regressive tax that most burdens lower and middle income Americans. The only fair solution is to raise the cap. Those who are self-employed must pay both the employer and employee portion of the tax, which is a real burden for small businesses.

[Tigress DEM]

68. How does raising the cap from 90K to 200k change SS?

If only that change is made then all the other rules still apply.

The only thing is that people over 90K who have the FICA tax on less than 100% of their income would start contributing in the same ratio as the rest of us.

How does that make it welfare, especially when SS is only for people who pay into the system in the first place?

Are you confusing Social Security with SSI - Supplemental Security Income - which is an offshoot that has it's own issues?

[qwghlmian]

73. If all you do is raise the cap -

and leave the rest of the SS rules alone, then you will be paying more benefits to those who retire who paid more, so more money in equals more money out and you didn't "fix" anything, really, you maybe delayed the collapse by a few years.

Let's say that those who today earn $90K/year, pay FICA on the whole amount, and are 40 years old - in 20 years they will start getting $5K/month (numbers are for illustration only).

The same person (40yo) today, who earns $180K/year, will pay FICA only on the $90K/year - and in 20 years will start getting the same $5K/month.

If you raise the cap, the second person will start paying FICA on the whole $180K/year - but in 20 years will start getting $10K/month (or maybe, because of slight progressivity in the rates, $9K/month).

You see where the two outcomes - more money in, more money out - will balance each other.

[Tigress DEM]

76. Except that with a HUGE amount of money, if we put a lot in now...

Where we see a gaping hole, it will start to fill in and even if that part just sits in a (dare I say it?) lockbox - or straight savings account with measely interest going, the amount of money we are talking about will have to generate something, which as people have pointed out - IOU's do not.

[cidliz2004]

67. Now now now!

That would be counter productive, how could the corporate bigshots make out better by paying more into the system? Isn't that the whole point of this?

[zapp]

7. It's not REFORM its Privatization!!

REform indicates something might be wrong with it!

[imenja]

8. the fund will be short by 2041

so revenues need to be increased before then. Did you even read my post? I specifically said no private accounts. The Democrats need to come forward with an alternative so they don't look like they are obstructionists. Why not use it as an opportunity to improve the system?

[orpupilofnature57]

9. Unfortunately the obstructionist, runs the country for the opportunists.

[Zynx]

11. The 2042 number is bullshit.

The CBO says 2052 with what are still conservative growth estimates.

[imenja]

12. regardless, social security is still a regressive tax

The system can be improved to be fairer to lower and middle income workers.

[DrCorday]

61. It's ROULETTE not reform!!

Harry Reid scored points there. We need to quit using positive terms when referring to a negative plan!!

"Social Security Roulette" is Democratic Minority Leader/Whip's term. Others are fine too, so long as one of them spreads and sounds as bad as it is.

[meow2u3]

10. There's a problem with this proposal

Namely, employers would lay off well-paid workers so they don't have to pay their half of the higher tax rates on upper income workers. They might end up hiring such workers at a lower base salary, and then pay them handsomely under the table. I wouldn't put it past those creeps to evade payroll taxes that way.

[imenja]

13. I see your point

perhaps the employer portion should be fixed at a certain level for companies of a certain size.

[Hippo_Tron]

14. Here's the ONE problem with increasing the cap

It's unfair to small business owners who have to pay half of their employees' social security already. If there could be some kind of exemption for small business owners it would be fine, though.

[imenja]

15. yes, I absolutely support that

For people who are self employed, they have to pay both the employee and employer portion of the tax. The employers portion could be limited by the size and net worth of the company or organization.

[Vincardog]

21. How many small businesses pay their employees more than 90K/Yr?

[Yupster]

59. A lot if

the business employs high end commission salesmen.

A restaurant or taxi driver no, but an oil pipe supply business, or a financial planning franchise - yes.

[Hippo_Tron]

60. What I mean is that it's unfair to increase their SS taxes because...

They already pay so much because of their employees. Also, what would greatly help fix this problem is to actually make big businesses pay their fair share of taxes. I'm okay with giving a few tax breaks to small businesses because that's where most jobs are created. Big corporations don't need them.

[cattleman22]

27. This proposal risks having SS become welfare and not insurance

Right now, SS is a third rail because it is not seen as welfare. As soon as you make the rich pay but not receive benefits, it becomes welfare. Even democratic presidents have supported "welfare reform."

[imenja]

29. please see post #28.

Thanks.

[imenja]

51. Question: when was the $90K cap determined?

Could it not at least be adjusted for inflation and increases in earnings?

[qwghlmian]

55. The $90K cap is for 2005.

For 2004 it was $87,900.
2003 was $87,000.
2000 was $76,200.
1990 was $51,300
1980 was $25,900
1970 was $ 7,800
...
1951 was $ 3,600

I would presume, from looking at numbers, that it is adjusted for inflation (and wow, inflation jumped between 1970 and 1980).

[imenja]

57. thanks n/t.

[DrCorday]

62. Okay, this is all really confusing.

Can anyone sum up how Social Security currently works? I was under the impression that you have to pay into it a certain amount or percentage - and once you've reached that number, you don't have to pay Social Security tax any longer, or at least not for the year.

Is that true? Is that what we mean by the "90K cap?" How much do you have to pay? When do you stop paying? Is the tax regressive or progressive? Who pays the most? How are your benefits determined?!

AGH!!!! CRAP

[imenja]

63. Here is what I know about the system

The tax is regressive because it is a flat tax. We all pay approximately 7.5% of our income (it may actually be higher now), which is matched by our employer. If you earn one dollar in a year, you pay 7.5 cents in tax. No income is exempt until 90,000, then you pay in no more. So everyone pays on income up to $90,000, but of course most Americans don't anywhere near that much. I don't know how benefits are determined other than congress sets a level based on inflation and current salary levels.

[BlueInRed]

75. Here's a good article on SS's current situation

This isn't on the cap per se, but it does help clarify where we are really at on SS. http://www.tnr.com/091701/chait091701.html

Personally, I like the idea of raising the cap, even marginally ... say up to 200,000. In general I like the idea of "to he whom is given much, much is expected."

I think the GOP will scream bloody murder on both counts of making it progressive and upping the cap.