The Social Security Wage Base Cap of $127,200 Is Stupid and Should Be Eliminated (cost, elect)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
A person who makes more than $127,200 does not pay taxes into the Social Security Trust Fund on income earned over that amount. I recall the first time this happened to me when the wage cap was even lower - I was shocked to get a "pay raise" after the SS tax disappeared from my paycheck.
In light of the fiscal calamity coming down the pike, this makes no sense whatsoever. What could possibly be the reason that a person who makes more than $127,200 should no longer pay SS taxes into the system? Millions of Americans make wages above $127K but who are not wealthy and in fact will be collecting upon retirement. If there is a travesty in current tax law, it's that those who make good money are not actually paying into the system beyond a certain income level. I say we shore up the SS account by eliminating the Social Security Wage Limit entirely.
so how many people am i supposed to pay for. I have no problem paying a higher rate of income tax, but certainly not more SS tax. I have paid vastly more than i can ever get back why should i have to pay more?
SS should work like Medicare taxes. Everyone should be taxed on all income.
It's supposed to be a limited payroll tax dedicated to financing a limited social insurance program, not a secondary income tax.
That's an important point that seems to elude you. FICA is a payroll tax, not merely another income tax or surtax that one might use to further punish the productive.
Besides...the wage base cap subject to FICA increases every year. Relatively few wage earners reach that level; hence, all of their earnings are already subject to this tax.
If you are concerned about diversion of FICA funds to the general fund, to be spent in an irresponsible effort to buy votes (and you should be!), then your problem isn't with the SS base wage cap. Your issue is with the Democrat party, who committed that nefarious accounting crime back in the 1960s.
Why is that limit in place? Can anyone explain to me?
If you raise it, you better raise my benefits. I should not be paying unlimited SS taxes but only getting a measly $1500K/month. I should at least get paid everything I pay into the system plus interest.
It's supposed to be a limited payroll tax dedicated to financing a limited social insurance program, not a secondary income tax.
That's an important point that seems to elude you. FICA is a payroll tax, not merely another income tax or surtax that one might use to further punish the productive.
Besides...the wage base cap subject to FICA increases every year. Relatively few wage earners reach that level; hence, all of their earnings are already subject to this tax.
If you are concerned about diversion of FICA funds to the general fund, to be spent in an irresponsible effort to buy votes (and you should be!), then your problem isn't with the SS base wage cap. Your issue is with the Democrat party, who committed that nefarious accounting crime back in the 1960s.
Medicare tax is supposed to be a limited payroll tax dedicated to financing a limited social insurance program? Great, so lets do that with social security tax as well then. Scrap the cap, just like the cap was scrapped on the Medicare tax.
If you raise it, you better raise my benefits. I should not be paying unlimited SS taxes but only getting a measly $1500K/month. I should at least get paid everything I pay into the system plus interest.
$3500 a month is the limit. If you pay more than you do now, you get more up to $3500 a month.
The medicare tax is not proportional to what you get out of Medicare either. Its a guaranteed safety net.
What could possibly cause you to owe that much in taxes to Uncle Sam? Sounds like an adjustment needs to be made to your withholding and/or quarterly contribution (if you are a biz owner).
I'm curious, how much do you know about the tax code that you think you know his circumstances? Are you a business owner.
First of all, I have zero empathy or sympathy for whatever chunk of that 100M that "wont" as you are assuming, that is on them. If someone can't handle the simple responsibilities of being an adult that doesnt become the problem of their neighbors.
As a country we need to do better at educating people in k-12 on simple personal finance basics.
There needs to be something in place for the small % of folks that would be destitute without it, but other than that I think taking away this faltering program is a wakeup call to motivate people to be more self sufficient, and if they even give it half a shot they will have more back from their would-be SS contributions than the government would have "given" to them. Its the old "you can lead a horse" argument, it applies here just the same.
About all one can do is vote for or against a selected party and/or elected officials in support of or not of SS.
I personally don't care, since through my life's efforts and luck I am rich enough near retirement. I as an American care for the betterment of all our people and remain in its support.
its really bizarre to me that so many people talk about social security like it is actually something other than guaranteed retirement income.
it's not an investment, and its not retirement savings. It is funded by a TAX, not by a contribution to an investment fund. It is not supposed to generate returns, and it is not supposed to rise and fall with the stock market, and you're not supposed to get back more than you put in (necessarily). It's a safety net, and it's a form of tax-and-spend welfare for everyone.
For a long time I have considered SS as a forced long term investment. It is indeed simply a tax and not sequestered savings in my own lock box, but with some monthly payments from the Gov't towards my retirement.
It is retirement money. What it isn't is investment or savings.
Why isn't it an investment?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
