It seems when they get elected, the forget who elected them. Raising the cap should have been a no brainer years ago. But what do we get? The chained CPI. Raise the retirement age. A well cooked number for inflation, so Social Security recipients fall farther and farther behind.

Isn't Rush Holt actually a rocket scientist? I'm pretty sure I read that somewhere.

Back on topic, I think the cap should be lifted.

So, close to a rocket scientist.

He's also my Congressman.

--but it sure would help if there were a lot more of them there.

Say it again! Scrap the cap! Can you say that, Mr Obama?

from the mouth of a house member.

To even begin the debate. Why hasn't it been proposed up to now?

about what removing the cap would do to the maximum benefit? The two things are currently in lockstep under existing law.

Just replace maximum benefit with a curve that increases more slowly than earnings.

Can you imagine some baby-boomer age CEO's paying thousands of dollars more in FICA taxes for just a few years, then reaping tens of thousands extra per year in Social Security benefits? I can.

Initial benefits calculations are already skewed to benefit people at the lower end, and they can easily be made more so.

and I would indeed advocate another one or two tiers of reduction in benefit for taxable wages paid as you go up the scale. However, with a cap eliminated, and the ridiculous amounts paid to CEO's to run their companies into the ground, you'd have to either have a cap (I'm OK with a high one) or a curve that asymptotically approaches such a low level of return for the taxes paid that it turns Social Security into a welfare program.

That is not welfare--unless you want to call it that because there is a tilt toward helping lower income people mre right now.

And you are forgetting that the FICA rate can be lowered substantially if higher income people pay more in.

that the FICA tax rate will ever be lowered. In fact, it was raised considerably as the baby boomers were entering their most productive working years, when measured against inflation. Frankly, it wouldn't surprise me to see that an eventual Social Security "fix" actually raised the rate by a percentage point.

If someone pays FICA taxes on X dollars, and gets one tenth of X as the increase to their maximum benefit (whatever the number, fill it in using the current tier of taxes on the highest incomes, and go significantly under that) won't it look like welfare?

A cap eliminates that possibility, that's why it's a good idea. Also, there are forms of income that are in effect compensation that are not FICA taxed, we can certainly extend the tax to that income. But the idea of a cap also means that someone's not going to collect tens of thousands of dollars a month from a Social Security System that they only paid high tax amounts to in the very last few working years of their life.

And proud of it.
Thanks for posting.

k&r

I think I'll use it.

The Republicans are the most enthusiastically pro-wealthy political party in America, rivaled only by the Democratic Party these days.

So, good luck, but don't get your hopes up.

Trust Fund, all representing OVERPAYMENT that was borrowed & spent to fund war & give tax breaks to billionaires?

WHY DO YOU WANT TO GIVE THEM EVEN MORE MONEY TO BORROW?

Make them pay back what they owe first. Spend down the TF before you start messing with the SS funding formula.

Whenever I hear the 'scrap the cap' stuff, it tells me how effective the 'crisis' propanda has been.

SOCIAL SECURITY IS NOT IN CRISIS. THERE IS NO BIG PROBLEM, SO WHY DO YOU KEEP TRYING TO FIX IT PREMATURELY?

--disappear. We need to scrap the cap because there is far more income equality that millenials will have to deal with, and that is the only way to compensate. Scrapping the cap will also make it possible to lower the FICA tax rate.

the trust fund is supposed to have about a year's cushion in it, not 5-6 years.

TF, at last report, by intermediate assumptions, won't be exhausted until 2033. so there's no need to do ANYTHING until 2028 or thereabouts, by which time conditions may be entirely different.

scrapping the cap = destroying the original funding design, & there was a reason for that design, which was to get the buy-in of the top 10% of wage earners.

without the cap, that segment of wage earners winds up financing more than half the program, plus paying the highest rate of income tax (higher than rockerfeller & dupont types in the top .001%).

and if you think you're soaking the rich by removing the cap, you're wrong. labor pays SS, capital pays INCOME TAXES.

scrapping the cap is pure idiocy. you want to kill SS, then scrap the cap.

Demographic lumps. The income inequality is so outrageous that scrapping the cap is the only way to deal with that.

'prepay' in any real sense except a moral one.

They paid roughly 4% to fund their parents' and grandparents' retirements & 2% to fund the US government's activities, which circa 1970s to present consisted of cutting taxes on capital & the rich generally, making war, offshoring jobs & computerizing the surveillance state.

That's what they 'pre-funded'. None of which made the lives of their children any better or easier.

The children of the boomers will not pay one bit less than they would have had the boomers simply funded their parents & grandparents at 4%. In fact, the children of the boomers paid part of this extra 2%, as did the parents of the boomers. My mother continued working into the 90s. My cousins' kids started working in the 90s.

So it's not just boomers 'prefunding,' it's ALL WORKERS who worked during the period.

In an ideal world, that extra 2% would have funded things that created more & better jobs in the US, or reduced work hours while simultaneously maintaining or improving quality of life.

But it funded offshoring or destabilizing jobs, reducing hours, reducing wages, & reducing taxes for the big shots while nickle & diming the 99% seven ways to sunday.

The way it's supposed to work is that each generation is more productive & is paid & benefited accordingly, SO IT DOESN'T MATTER THAT GENERATION B IS SMALLER THAN GENERATION A, the 'burden' on it of caring for dependents is less, because its quality of work & living is higher.

And when Generation B's quality of work/living is lower than Gen A's, 'prefunding' is doubly awful, it does nothing but further reduce Gen B's already declining standard of living (consumption/saving power) during its working years, and force Gen B, through the back door, to fund the general budget, which should be funded through PROGRESSIVE INCOME TAXES that fall heaviest on the rich & big capital.

In other words, it substitutes a REGRESSIVE TAX ON LABOR for a PROGRESSIVE TAX ON CAPITAL.

Social Security's flat/regressive funding is fair only because the payout is PROGRESSIVE and DEDICATED TO LABOR. When SS taxes are used as general revenues in supposed 'prefunding' schemes, it becomes monstrous, a stealth tax on labor that allows capital to pay less.

"Prefunding" is a big con; 'scrap the cap' is another.

The way to 'deal with' income inequality IS TO REDUCE INCOME INEQUALITY AT THE FRONT END. and it should start with CAPITAL, not LABOR.

Those are safe investments, but naturally the 1% would prefer that this bargain not be honored. Making sure that it is is a political effort which has wide popular support. And yes, pay as you go was not an option--Gen X is not large enough to support the boomer demographic lump, so we did the prepayment.

gives the 1% lots of ways to steal the money, overtly or covertly (as they're trying to do now by changing the cola formula).

why give them more money to steal?

Gen X is not the only cohort who will be paying for the boomers. The boomers will be partly paying, and Gen Y etc will also be paying.

But this idea that a 'smaller' cohort can't pay for a larger one's retirement is just nonsense, and the history of SS proves it's nonsense. It's not about the ratios of workers to retirees, it's about productivity & the proportion of the surplus labor gets.

--the 99%. Of course the borrowing wasn't necessary, but we didn't have the political power to stop it.

big demographic bulge.

i don't expect ss by itself to deal with the attack of the 1% on the 99%. but i *do* expect supposedly 'left' spokespersons to stop spreading the meme that a demographic bulge makes prefunding 'necessary' or inevitable.

i would also like to see left spokespeople start discussing the real issues, instead of just going along with the memes of the 1%.

a few years ago the push for education deform looked like a sure thing' there was a solid wall of propaganda as far as the eye could see. the only people pushing a counter-narrative were some former radicals in education & some education bloggers. Big name pols & big media were 100% behind the 1% meme.

In the last year, the anti-education deform message has penetrated the msm & there is a discernible grassroots push-back (part of it, ironically, coming from the right -- but for mostly the 'left' reasons).

as far as i can tell, it's been the steady drumbeat from these isolated voices (like mad floridian here at DU) that's responsible for the growth of the push-back.

we need to do the same thing for the lies being spread about SS, and one of those lies is the whole pre-funding thing & the constant drumbeat that we have to act NOW.

NO, WE DON'T HAVE TO ACT NOW. IN FACT, IT WOULD BE STUPID TO.

Democrats like rush holt (himself the son of a senator) are not our friends in this matter.