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I may be wrong about your post but it appears to be misleading and or you failed to read the post you quoted. His line that you highlight in bold letters is the title of a book not his personal thinking. In fact his post is belief to the contrary of the book title. Your quoting of him is catchy but not what he was saying. It is comparable to the selective editing we see all to frequently today. If you meant to reinforce his point as being one you agree with, I am not sure you accomplished that.
Yes, you are correct. I appreciate you pointing that out in your posting.
One of the things I despise is when folks pick out part of my posting and then twist it to change the meaning of what I stated. In fact, what he selected was the title (and sentiment) of an article I was criticizing, not supporting.
Yes; I don't know why income over 106K is exempt in the first place; remove this cap, and Social Security will be solvent for decades..
Did you read the thread before posting this? In post #14 above, Iwonderwhy2124 had already answered your question. I quote from that post: "There is a cap on the S.S. tax because there is a cap on S.S. benefits".
I wish more people were aware that the formula for determining Soc. Sec. retirement benefits favors low wage earners over high wage earners, as your excellent post shows. This is especially relevant when discussing the fairness, or unfairness, of the Windfall Elimination Provision (WEP). Although I am subject to the WEP, I think it is totally fair. However, many state and local civil servants who are not subject to Soc. Sec. in their main job but who have qualified for it over the years in other jobs or part-time jobs, especially teachers, are convinced that they are being unfairly denied part of the Soc. Sec. benefits they have "earned". Not so.
I wish more people were aware that the formula for determining Soc. Sec. retirement benefits favors low wage earners over high wage earners, as your excellent post shows. This is especially relevant when discussing the fairness, or unfairness, of the Windfall Elimination Provision (WEP). Although I am subject to the WEP, I think it is totally fair. However, many state and local civil servants who are not subject to Soc. Sec. in their main job but who have qualified for it over the years in other jobs or part-time jobs, especially teachers, are convinced that they are being unfairly denied part of the Soc. Sec. benefits they have "earned". Not so.
One of the many things I think folks tend to gloss over is the difference between increments.
For the first $20,000 in earnings, the benefit is $832 per month. When you look at the $20,000 increment between $80,000 and $100,000, it only adds an additional $182 per month in benefits.
In addition, wealthier earners are subject to much higher taxes on the benefit, in addition to receiving a much lower rate of return.
Yet folks complain about the rich not adequately supporting the SS system.
The focus of why we would raise the cap on income is to help the system with solvency. In order for that to work we can't have a proportional increase in benefits. We have to be careful of not overlapping two different concepts. One being fairness and the other being solvency. In order to obtain solvency we may need to put fairness on the back burner. SS insolvency helps no one and all would/will be hurt. There are other issues with SS that bother me. One is non working spouses being eligible for spousal benefits. May only be 50% but when compared to what they contributed? That is the rip off!
Part of the problem we have getting the economy going is confusing economic policy with social policy. Economic policy need not be compassionate but needs to be what works if you are going to try it.
There are multiple ways to get solvency, including raising the cap, raising retirement age, lessening or eliminating spousal SS, altering the cost of living formula, raising the contribution %.
My favorite, which is rarely discussed, is to make 80% of all SS benefits subject to income tax, and place that tax revenue back into the trust fund.
There are multiple ways to get solvency, including raising the cap, raising retirement age, lessening or eliminating spousal SS, altering the cost of living formula, raising the contribution %.
My favorite, which is rarely discussed, is to make 80% of all SS benefits subject to income tax, and place that tax revenue back into the trust fund.
My favorite, also rarely discussed, is to increase the number of quarters required to qualify for benefits. The current level (40 quarters which equals 10 years) is not very much. The change would not have to be draconian; it could increase step-wise to 48 quarters which equals 12 years. This might be a rather small step towards solvency, but it could be part of a package including other steps.
"The ideologues at places like the Cato Institute and Heritage Foundation ( both Republican think tanks)are providing the intellectual justification for destroying Social Security, but the real opposition to Social Security, though, is corporate America, as represented by groups like the Business Roundtable and the US Chamber of Commerce (it's corporate America that funds those foundations and their resident "scholars," after all). And the reason for this corporate opposition is that Social Security taxes and Medicare taxes paid by workers are both matched, dollar for dollar, by employers. If you pay 6.2% of your income in taxes to the Social Security Administration each year, so does your boss, and if the income cap is lifted for workers it will also be lifted for employers. That means a bigger tax bill for the company, and of course personally for the managers and board members.
So let's at least be honest in this coming battle over "saving" Social Security. It is nothing less than a war between bosses and workers."
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