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I have a problem with that. Before your raise the Social Security Tax, you ought to raise the cap.
The problem with raising the cap is that you must then raise the maximum payment rate. If you don't pay the payment rate, then its taking from the wealthy, which really isn't fair.
The problem with raising the cap is that you must then raise the maximum payment rate. If you don't pay the payment rate, then its taking from the wealthy, which really isn't fair.
Right, the cap doesn't represent any inherent "unfairness" because benefits are also capped. And the bend points provide a much higher income replacement percentage for low earners. In addition to that, taxation of SS benefits recovers far more money from high earners than low.
But the system is grossly unfair in some other ways that should be addressed:
A spouse who never pays a dime into the system can collect half the benefit of one who pays in the max for 40+ years. (And raising the cap would make that even more unfair.)
It only takes 35 years of earning to receive the max benefit. If you work for 45, you get nothing for the additional 10 years of taxation.
Even with less than 35 years a worker can earn a high percentage of the max benefit, a ridiculously unfair subsidy of early retirement.
Here's the extreme example of this unfairness - it's unbelievable but you can download the ssa.gov calculator and verify:
Person A and Person B are born in 1944 and turn 66 in 2010. Person A pays the max for 10 years, 1964-1973. Person B pays the max for 46 years, 1964-2009.
Person A pays $3513 in taxes, and his monthly benefit is $806.
Person B pays $159,007 in taxes, and his monthly benefit is $2346.
Why are we so generous with people who pay so little into the system???
The deficit was increased with the medicare bill passed by a Republican congress and President Bush by 7 trillion dollars in one vote, in one day.
Talk about hypocritical
Why do you assume Bush policies with education, immigration, and the Medicare bill are any different then the same crap libs and progressives have been doing for decades? News flash, Bush was not a fiscal conservative, he was a big government guy, and was a part of the problem. I'd think Bush's big government ideas and his spending would be the one aspect of Bush you agree with, or are you a thrifty, small government TEA partier now? Nah, me thinks you are just an irrational Bush-basher.
the problem with this argument is that SS isnt hurting at all. The SS trust fund is sitting on tens of trillions worth of US Treasuries. If there runs a period of time that the Social Security runs a deficit, they simply cash in some of these trillions of IOU's..
This is absolutely incorrect and it is very dangerous that it keeps getting repeated. Even the government admits it is not true: nowhere will you see a government report that claims the "Trust Fund" has any value and can simply be accessed to pay future benefits.
The SS Trust Fund is full of NON-NEGOTIABLE securities, not T-bills or bonds or anything that has value. They have absolutely no value.
"The Federal Office of Management and Budget clearly states: These [Trust Fund] balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense.... They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures." (from FY 2000 Budget, Analytical Perspectives, p. 337)
President Bush also stated it clearly in 2005: "Some in our country think that Social Security is a trust fund – in other words, there’s a pile of money being accumulated. That’s just simply not true. The money – payroll taxes going into the Social Security are spent. They’re spent on benefits and they’re spent on government programs. There is no trust." What's Really in the Social Security Trust Fund?
And the piper actually had to be paid this year for the first time, when SS benefit payments exceeded SS tax receipts for the first time: "This year, with Social Security collecting less cash than it pays out for the first time since the 1980s, Treasury had to borrow money from investors to redeem the securities that the trust fund cashed in to meet Social Security's obligations. So what use was the trust fund, other than symbolic? None. The same thing will happen next year."
It's not a difficult concept. It should be possible for everyone to understand it.
This is absolutely incorrect and it is very dangerous that it keeps getting repeated. Even the government admits it is not true: nowhere will you see a government report that claims the "Trust Fund" has any value and can simply be accessed to pay future benefits.
The SS Trust Fund is full of NON-NEGOTIABLE securities, not T-bills or bonds or anything that has value. They have absolutely no value.
"The Federal Office of Management and Budget clearly states: These [Trust Fund] balances are available to finance future benefit payments and other Trust Fund expenditures – but only in a bookkeeping sense.... They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures." (from FY 2000 Budget, Analytical Perspectives, p. 337)
President Bush also stated it clearly in 2005: "Some in our country think that Social Security is a trust fund – in other words, there’s a pile of money being accumulated. That’s just simply not true. The money – payroll taxes going into the Social Security are spent. They’re spent on benefits and they’re spent on government programs. There is no trust." What's Really in the Social Security Trust Fund?
And the piper actually had to be paid this year for the first time, when SS benefit payments exceeded SS tax receipts for the first time: "This year, with Social Security collecting less cash than it pays out for the first time since the 1980s, Treasury had to borrow money from investors to redeem the securities that the trust fund cashed in to meet Social Security's obligations. So what use was the trust fund, other than symbolic? None. The same thing will happen next year."
It's not a difficult concept. It should be possible for everyone to understand it.
The numbers will actually be worse next year.
Reduction in payroll taxes and increase in SS recipients as the first wave of boomers hit 65.
Why do you assume Bush policies with education, immigration, and the Medicare bill are any different then the same crap libs and progressives have been doing for decades? News flash, Bush was not a fiscal conservative, he was a big government guy, and was a part of the problem. I'd think Bush's big government ideas and his spending would be the one aspect of Bush you agree with, or are you a thrifty, small government TEA partier now? Nah, me thinks you are just an irrational Bush-basher.
I don't, Actually I'm a small government guy. You should read more of my posts. Just because I argue with asinine deregulation, doesn't mean I'm for big government.
I was pointing out to someone that the liberals weren't the only ones who have been putting us deeper into debt. The same people who are enraged about the Obama deficit spending said nothing when President Bush and Republicans were doing far worse.
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