Who here think raising the SS payroll tax above 97,000 will hurt the middle class?

[mod mom]

I've always thought they should exempt the lowest wages and start at some amount (maybe above $20,000) and have it made up at higher incomes by raising the ceiling.

I believe Obama hit a homer when he called Hillary on this by saying only the top 6% make $97,000!

[nightrider767]

1. Home run for Obama

That's the way to debate.

Someone puts something out there and you call them on it.

It's not bashing, it's not mean, it's just a debate.

Great idea by the way...

[Yael]

2. While I agree, there is the flipside to this

The people exempt from paying into SS are also barred from collecting it.

[mod mom]

3. Is that tax law? Didn't know that. Then perhaps have a sliding (upward) scale

would work better.

[Yael]

10. There is an earned income clause that depletes your SS payment

if you make (earn) over X amount (depending on the retirement date)

[Yupster]

21. This is true for workers

who are retired and collecting a social security check, but still working.

You can find the reductions on the social security website, but they were changed about 5 years ago, so you can make much more without having a reduction than you could ten years ago.

[papau]

25. It is not the proposal - the proposal pays increased benefots also.

[Ravy]

4. Not true.

They just can't collect on what they do not put in. In other words, they don't get millions back after putting millions in, since they don't put the millions in.

[Yael]

11. SS payments are reduced by Earned Income

[silverweb]

7. I think it's more complicated than that.

"Exempt" people have already paid up to the cap, and the amount you get out is based on what you put in modified by other income parameters.

[Yael]

12. Exactly

But note that only earned income is paid on. Non-earned income is completely exempt fro payment requirements.

[silverweb]

14. Economics is NOT my forte...

However, even I've got enough functioning brain cells to know that unearned income should NOT be exempt, but should be taxed progressively both before and after retirement!

Income is income, and the fact that certain people get exponentially richer merely by virtue of the fact that they're already rich -- and are also virtually tax exempt -- is just fundamentally unjust and wrong.

[Yael]

16. That would be our friend, the capital gains tax

Which under Reagan was 28%, Clinton 20% and *, 15%

It needs to be jacked right back up to the pre-Clinton days, IMO.

The fact that Warren Buffet's secretary makes $60,000 a year and pays more in taxes per capita than he does just underscores that.

Through his 31 percent ownership of the company, Buffett said he would receive an additional $310 million in income that would reduce his tax rate from about 30 percent to 3 percent, while his office secretary would still have a tax rate of about 30 percent.

More at: http://money.cnn.com/2003/05/20/news/buffett_tax/

Edit to add this link from earlier this year: http://business.timesonline.co.uk/tol/business/money/tax/article1996735.ece

[silverweb]

17. Agreed 100%.

I saw the interview with Buffett and wish more wealthy people had his conscience and sense of justice.

[Yael]

19. Agreed. He is a great man with a heart to match his intellect.

[Yupster]

22. There are also millions of workers

who are excempt because of their profession.

In many states, public schoolteachers are excempt from paying into social security. That is the largest group of excempt workers.

I've never heard a reason why they are treated differently than everyone else.

[papau]

26. Public employees covered by a State plan can be excluded by state from SS

[Warren Stupidity]

9. That has nothing to do with the FICA salary cap.

The salary cap simply puts a ceiling on annual 'contributions'. If you pay in you get a payout if you live long enough.

[Yael]

13. See above

It is all balanced out.

[Warren Stupidity]

34. Oh please, you made a silly assertion about the OP

that was wrong and now you are attempting to divert away from your error by discussing a completely differnt issue. The salary cap on FICA wages subject to taxation does not affect eligibility for benefits. Earned income when you are eligible for benefits does.

[Yupster]

20. Incidently -- why are some workers excempt from

participating in social security?

Around here public schoolteachers don't pay into social security. Neither do college professors.

Does anyone know why?

They have their own retirement plans which are of course much better than social security. I'm sure lawyers or doctors or stockbrokers would love to set up their own plans too, but they can't. So why can teachers?

It throws the whole idea of a universal program that charges more to the middle and upper classes and supports the lower classes with its generous bendpoints formula onto its head.

Of course if an eleven year old kid loses his dad, we all agree with social security sending the kid a check each month. That way we all pool our resources to help that kid. So why are teachers able to say "no thanks. The rest of you pay. We'll set up our own systen thanks very much." That doesn't seem reasonable.

Why doesn't anyone talk about bringing excempted workers back into the syatem? It would greatly ease the burden on the plan in years to come.

Is it just that teachers vote in large numbers?

And why is it that in some states public school teachers do pay into social security and in others they don't? This seems like a big deal and I never hear it discussed.

[papau]

27. It is states rights - State emploee retirement plan covered employees can be excluded

[Yupster]

29. That figures

The government sets up a program and mandates we all must join it,

and then they excempt government workers from it.

That sounds about par for the course.

[papau]

24. the proposal would allow collecting benefits based on total income - effect

is new benefits less new revenue is enough extra surplus to close any funding gap caused by that very conservative 1.6% annual future growth in our GDP assumption that was used so as to show a "deficit" and benefits dropping to 71% of what is promised for 2041 in 2041 and later.

[Warpy]

5. It won't do anything but be a back door income tax increase

until they get Social Security out of the general fund and the overpayments out of the greasy hands of Congress.

We're already collecting more money than the system needs right now. It's just being robbed to fudge the books on tax cuts to the rich and corporate.

NO to any increase in OASDI taxes including raising the cap until Congress gets its mitts off the overpayments.

[papau]

28. Getting "out of general fund" doesn't help - they need to invest in non-gov bonds - say equities &

corporate bonds.

Buying gov bonds finances deficit and allows media to report a much lower "budget deficit" compared to actual growth in national debt.

[Kurt_and_Hunter]

6. I don't object to taxing the top 6% much more, but not in the SS tax

Historically, SS taxes have remained less progressive than income taxes because it increases support for the program.

Its about politics, not net revenues.

I would rather the rich paid more income tax, and if SS really needs more money, then supplement it from general revenue. Same net taxation, but without rallying a major attack on social security.

The problem is that many people are starting to figure out they will never be billionaires, but still have reasonable expectations of maybe cracking 6 figures some day.

[Renew Deal]

8. I live in NY. $97 is too low.

There are a lot of people that make about that much that are not even close to wealthy.

[silverweb]

15. Visual aid.

Current median salaries in the U.S.:

http://www.payscale.com/research/US/Country=United_States/Salary

[Evergreen Emerald]

18. Obama only won it if you look superficially at the issue.

What Clinton said is that in NY the wages are higher, and the costs are higher too. So, a firefighter, or police officer may make that much, but still be middle class. And then she talked about working on the issue including the whole of America.

You did not hear that part, because you did not listen past the canned insult of Obama's. He, again showed that he did not totally grasp the complete issue.

[me b zola]

31. Clinton has plans to implement the republican plan to social security

I didn't like it when bush* and the repubs were trying to shove it down our throats 2 years ago, I don't like it when it comes from a Democrat.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=132&topic_id=3629987


People who have benefited the most should contribute the most.

[JackORoses]

33. what Clinton said is that she supports the 6%, if you get right down to it

[David Zephyr]

23. It will already be raised automatically next year. This is not how to solve Social Security.

This is the silliest argument to saving social security of all because the way to save it is to stop allowing the deposits to be used for anything other than social security.

Next year, this tax will be adjusted to incomes of $102K as it has been adjusted.

[w4rma]

30. Obama is right that the caps should be raised. I think they should be eliminated. As currently

implemented, this is the most regressive tax in America. It totally excludes the highest income earners.

[Disturbed]

32. Tax Laws are written by Tax Attorneys paid by the Wealthy.

The Middle Class gets screwed over every time.