Why isn't anyone talking about raising the Soc. Sec. cap?

- just a little! Would that cause too serious a drop in Shopping?

so that the burden of paying for general social insurance benefits not only to all senior citizens but also to the disabled, to widows, orphans, etc. is shared equally by all. Social Security is a regressive tax or insurance premium -- flat for those who earn less than the maximum amount. Every dollar over that gets off Scot free. Those whose income is from investments pay nothing at all toward the benefits. UNFAIR. UNFAIR. UNFAIR. And now Bush wants to shift the entire burden for paying benefits to the widows, orphans and disabled onto the lower middle and lower wage earners. FOR SHAME!

The worst of it is that Democrats are not screaming and yelling about this obvious injustice. It is not mentioned anywhere -- yet the best argument for continuing to fund programs for the poor like Medicaid out of the general fund is to make sure everyone pays their fair share.

Why the lies of the GOP are repeated at DU always is a mystery.

a salary of well over $100,000 is still just middle class. I don't care in what percentage those salaries would fall in a statistical study of the United States as a whole. Ordinary three bedroom houses can cost over a million dollars in the L.A. area depending on where they are located. The cost of living is extremely high here, and there are many, many amazingly wealthy people living high on the hog. Middle class Americans in the South and Middle West would not believe what goes on here. This is the future guys if the Republicans continue to wreak economic havoc in this country. The poor are very, very poor here and the rich are very, very rich.

answer - IMHO

:-)

So those of us in New York, LA, San Francisco and the DC area get a cap at say, 90 grand, and folks in lower cost of living areas get a higher cap. I could also get some nice contract work from the Social Security Administration re-designing their software.....

I fully expect that Bush et al will argue that it will have a negative impact on job creation. Right now, the employee pays 7.5% in payroll tax, and the employer matches that amount. Accordingly, the higher the salary, the higher the amount that the employer "pitches in". At least theoretically, this would have a negative effect on job creation and wage increases. I wonder if there is anyone out there who has a small business who could comment on the marginal effect of increasing the cap to say, $120,000?

By the way, for those of us who are self-employed, the self-employment tax kicks in and we pay that instead of the combination of payroll deduction and employer contribution. This is my first year from going from "employee" to "self-employed" and the SE tax was a high kick in the teeth--my tax burden about tripled. As far as I can tell, the "cap" does not apply to the SE tax.

I was prepared to pay, but it was still unpleasant. All you folks switching to 1099 status - remember to get yourself at least 30% more than you would as a regular salaried employee. And make as big a SEP IRA contribution as you possibly can......

I think you are right, though. Bush and the GOP will say that it would be raising taxes and will hurt companies, thus hurting job creation.

Our children will live under conditions that can only be described as jobs based fascism.

... as is just about anything coming out of the mouths of this administration.

I do think that it probably would have some effect on very small entities that might be running on small margins, but somehow I double those folks have lots of employees making over $90,000.

It might also have some effect if you playing lots of mega-salaries for top corp exects if there were absolutely no cap... especially considering that the "fix" would not be to lower the salaries, just lay off a few more people and let the others increase their "productivity"....although I suspect what would happen is that those execs would have a greater proportion of their comp in some form excluded from payroll tax base (are options excluded? deferred comp? any experts out there?)

A lot of the extravagant salaries are paid as bonuses and through stock, not just as straight salary, specifically so CEOs can avoid taxes.

stock options may escape taxation until they are realized.

IRC 1402(b) incorporates the cap by reference for those of us who by SE tax

IRC 3101 imposes FICA on "wages" as defined in IRC 3121(a). 3121(a) defines wages as all remuneration for employment including the cash value of all remuneration (including benefits) paid in any medium other than cash ... but then there are a bunch of exceptions for certain retirement, medical insurance and similar benefits, and certain fringe benefits. Note that there is specific statement that just because something isn't wages for withholding purposes, they wouldn't be wages for FICA purposes at the end of the list of exceptions.



Just so ya know!

If it isn't on your return somebody goofed. Note that there is no cap on the medicare portion for either standard FICA or the SE tax.

I am against raising the cap as SS is currently running a surplus that is being used to fund tax cuts for billionaires. First roll back the tax cuts, then we can talk.

Also, the middle class is who gets most screwed by 'raising the cap'. Al Franken has it exactly right: if you want to fix the 2050 'crisis' (and most likely there is no crisis at all) by a tax adjustment today - do it with a donut exemption in the middle: the current cola adjusted cap stays put, but the FICA kicks back in at full force at 200K or 300K or 1M, and that kick-in level is cola adjusted as well so that the sneaky bastards can't inflate it back into play against middle class working families like they have with the AMT.

The rethugs are just praying to their false idols that Democrats will propose a middle class tax hike as a cure for the non-existent SS crisis, and we at DU and elsewhere, in our pathological determination to be fair and reasonable are as usual eager to fall for their trap.

Don't be fooled.

... that ElaineinIN is totally incompetent! I highly advise you never to use her for tax preparation!

Actually, the beauty and danger of turbotax--its calculated automatically, so you aren't a victim of you're own stupidity although you also don't get the transparency of knowing exactly how it was caluclated.

over 90,000 is not middle class in most parts of the country - indeed the IRS tables indicate 6% at worst.

Getting rid of the cap will likely lead to a reduction in the rate once folks realize this crisis is faked.

So raising the cap is an obvious good for the middle class.

In other words this directly hurts blue state middle class urban families.

Just look at the average housing costs in the boston-atlanta metro region. Now go figure what the monthly rent or mortgage payment is. Then get back to us about 90K not being middle class. Same story in the chicago metro region, and the San Diego-Seattle west coast metro region is even worse. Everywhere except those red states, if you live in a major city or its suburbs you are definitely middle class at 90K.

while it is running a surplus? What sense does that make?

See my other posts here. This is just a trap set for 'fair minded reasonable people', i.e. Democrats, by the rovian-rightists. They want us to propose a tax hike to 'save SS'.

There is no SS crisis. There is an obligation to pay back SS surplus T-bills, just like there is an obligation to pay back ALL T-bills. The rethugs would like to use a FICA increase rather than rolling back their unsustainable billionaire tax cuts and blame it on the Democrats. We seem to be more than willing to give them this victory.

at least IMHO

:-)

So that's the donout Al Franken refers to.

and as more folks become 1099 employees, we are liable for the entire 15%. So, I think raising the cap would force even more employers to trash the traditional employer-employee relationship in favor for a contractor relationship.

I found it much easier to pay the full 15% the year I earned $58,000 (the one year :cry: ) than during the year that I earned $16,000 (the one year :-) )

I assume that it would be even easier at $100,000.

and you then earn two or three times that amount, I would say yes.

Leaving the dems waiting for someone to provide a halfway acceptable reform---not that I am for raising the cap either.

Scarborough says. LMAO.. the fucking cap is 90k right, for ONE person. Just how many of out there are tapping over 90k all the time.. what a joke.

i live in chicago, and i personally know a number of people who make more than 90K, and at least several who make more than double that.

because it isn't Bush's plan. I've heard this suggested a few times on progressive talk shows. I was listening to Guy James' show last night from Saturday and a caller called in and talked about that. It's all they have to do. The guy also said to make it an unlimited cap. It's Bush's plan to steal all that money so of course he's not going to talk about it. The democrats are smart not to talk about a plan though because they'll be stepping in a trap I think. I like what Pelosi said at the anti-private account rally they had last month and told how democrats and republicans came together with President Reagan and worked it out. Using Reagan again against Bush. ;)

I recall that Bush slipped up and mentioned it as possibly being on the table several weeks ago, but he got shot down right away by other Repubs, because they want to shield their business and wealthier constituents from tax hikes and they want only Dems to suggest it so they can attack them for wanting to raise taxes. Rep. Senator Lindsey Graham of S.C. has been attacked in TV ads over his suggestion of raising the cap being part of the fix:

"Sen. Lindsey Graham has been forging ahead in the debate, courageously trying to find middle ground on one of the most politically contentious issues in Washington. Aware of the nation’s long-term fiscal problems, he has refused to ignore them by just calling for huge, additional borrowing. Instead, he has proposed raising the cap on what annual income is taxed for Social Security, now at about $90,000.

For this display of good judgment and consensus-seeking, he is being vilified in campaign-style attack ads, cooked up by a national anti-tax group and run here in his home state.

The Club for Growth has been airing TV ads that decry Sen. Graham’s plan as “a really bad idea.” “You can’t help someone save for retirement by raising their taxes,” the ad says."

From interesting editorial in S.C. Newspaper The State


http://64.233.187.104/search?q=cache:mhqYMkiSuooJ:www.thestate.com/mld/state/news/opinion/11421604.htm%3Ftemplate%3DcontentModules/printstory.jsp+Lindsey+Graham+TV+add+attack+tax&hl=en&client=firefox-a

man - and our nedia and some at DU take them seriously!

amazing!

:-)

Why isn't anyone talking about how the idiot STOLE the money and now doesn't want to pay it back.

It really is shocking.

white and blue collar alike.

A very simple modification which could be made to extend the solvency way beyond the current dates, would be to increase the cap at the same rates that benefits increase. Basically a "cost of living" adjustment to the cap. This alone would ensure a continued increase in the flow of capital into the system.

It is called the COLA adjustment and it applies equally to both the FICA cap and to benefits.

By the way there is no crisis that justifies a tax hike. SS is running a surplus. The SS surplus funds full benefits until at least 2042. The crisis is that the fat cats will have to give back their tax cuts in order to meet the SS obligations starting in 2018. Too bad for them.

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I have been yelling about the caps for quite some time now. "Most" people don't know about the caps because they don't make that much.

I agree that the conservative goal is to eliminate SS. Raising the cap makes sense, but Joe republican will not go for this.

In my opinion the best argument again fixing SS NOW is that we can't spend trillions of dollars fixing SS when the deficit is out of control. Bush has committed to reducing the deficit. How can he if he spends trillions on SS?

I think the message should be "fix the deficit first, then fix SS".

Joe republican still believes that deficits are bad. But they also believe that tax increases are worse. I think that focusing on Bush's fiscal mis-management is the best way keep SS safe.

Concern about it croses party lines too!

Even Bush couldn't call his proposal what it really is - benefit cuts.

http://www.aarp.org/money/social_security/

from the site:


Our Future: No Immediate Danger

Social Security is in no immediate danger of going "broke." With the retirement of the boomers on the horizon, Social Security began to build a cushion to see us through their retirement years. Because of that planning, the Social Security Trust Funds hold over $1.5 trillion in U.S. Treasury bonds and earn interest every year.

Without any changes, Social Security will be able to pay 100% of benefits until 2041 and over 70% of promised benefits after that. Only paying 70% of promised benefits, however, is not acceptable.

Our Challenge: Addressing the Future Shortfall

Some simple steps can be taken to begin making a down payment on that future Social Security shortfall. AARP supports:

Investing part of the Social Security surplus so that it earns higher returns than those offered by U.S. Treasury bonds. That way, we strengthen Social Security while sharing the risks of investing. We should not be creating a system where some people win and others lose when it comes to Social Security.
Raising the cap on the amount of wages taxed to support Social Security to cover the same share of wages as in the past. That would gradually raise today's cap of $90,000 to approximately $140,000.
Making Social Security a truly universal system by including all newly hired state and local government workers in Social Security.
These steps alone won't fill the entire future gap, but they are a substantial step towards solving the problem.