Raising the cap on SS: Lousy idea?

I've been reading a lot of posts about raising the SS cap to $120K, $150K, etc. Honestly, I'm stumped by this "solution".

As most are well aware by now, we don't have an SS problem (at least until approximately/maybe 1950), we have a GENERAL FUND problem.

The problem is that INCOME taxes are too low...why are we talking about payroll taxes?.

The primary beneficiaries of the income tax cuts over the past 20+ years are not these high-middle wage earners...the beneficiaries are *'s REAL base--the truly wealthy.

We are doing the repugs work for them: Letting *'s base off the hook for 20+ years theft of OUR money, conflating SS taxes and income taxes, and potentially alienating some big city dems ($115 in NY is not that much especially if someone is supporting kids, paying off student loans, etc.).

The dem position should be to reverse *'s income tax cuts for the wealthy.

But realistically, until we're in the majority, we're not going to fix the income tax problem.

SS isn't "in crisis," but there will be a problem on down the road if nothing is done. Getting rid of the cap would only affect people who make more than $90, and it wouldn't really hurt them. I do agree, though, that there's no point giving * any more money to squander. If there are any increases in FICA, they should be protected from him.

I think raising the cap is the most logical and fair idea. But once we get that money in the trust fund, we need to leave it there and quit dipping into it, especially for tax cuts for the already-wealthy. That's the main reason the RWNJs feel safe sayin that SS is in "crisis" -- under Clinton we had a SURPLUS because we weren't raiding the trust fund.

Why should those who make b/t $88 and $120K per year be responsible for making up for the massive tax cuts benefitting corporations and the uber wealthy?

from paying payroll tax at all? I don't get it -- why shouldn't they just charge everybody for all the money they make, the way they do with people who make less than $88K? Besides, if they only raised the cap to $100K I've heard that would make SS solvent for several further decades beyond the current "bankruptcy" point.

If SS payments are to be unrelated to the taxed amount, then why not eliminate the cap entirely?

but that's precisely what I think they should do.

income taxes for the wealthy than bust the cap.

That's the right thing to do, but it's not gonna happen with repugs in charge.

Moreover, all the dems have to do is respond to *'s eventual proposal.

Here's how:

1. There is no SS crisis. The fund is solvent until 2050, and beyond that only minor adjustments are necessary.

2. * uses the term "crisis" because in 2018, the government must begin paying the debt owed the SS trust fund, and the republicans don't want to do that.

3. The only crisis is the deficit which has been caused by reckless tax cuts for the wealthy. Roll back *'s tax cuts for the wealthiest Americans.

Done.

the best feasable way politically to roll back republican tax cuts is to say that we need that money for homeland security (borders and chemical plan protection) and iraq war (armor for our troops). so the SS solution will have to come from somewhere else, you can't use repealing tax cuts to solve everything.

what about that idea by krugman to change the way SS is calculated (price index)

Won't rolling back the tax cuts for the wealthy pay off the IOUs? And aren't the IOUs the only reason * can even pretend there is a crisis?

Maybe I'm missing something here. :shrug:

Chimperor is so deep into those damned tax cuts that he's not about to back down on them. It looks like raising the cap is our "fallback" position (after Chimpass has turned down rolling back tax cuts).

than the biggest of the big guys should have to pay payroll tax on their whole income. Neither DH or I are to the cap yet and if we don't miss it, then the bigwigs won't either!

Rolling back the cap isn't about SS itself, but rather making the tax system more just.

How much excess in FICA have been paid in the last 20 years?

Not sure actually.

I think we're being sucked into making this an either/or situation.

First, Bush'd tax cuts were reckless, unfair, and unsustainable, and should be repealed. Period. Regardless of any other policy decisions, Social Security or otherwise.

Second, eliminating the FICA cap, which is currently $90k, would make SS fully funded for perpetuity, for as long as anyone can predict. It truly "solves" whatever funding "problems" there are with SS (and no, I do not think it is even close to a crisis). Not only does eliminating the FICA cap "solve" the funding issue, but I think it is inherently fair, since receiving SS benefits does not depend on income, the very rich still receive SS. Their wages should be taxed fully, just like everyone who makes under $90k.

If you raise the cap, you raise the payouts for those people as well. More comes in, more comes out, you will start paying $50,000/month payments to Bill Gates and $20,000/month to a whole bunch of people, and those guys usually live longer, so the drain will be higher. It is very doubtful that eliminating the cap will do any good, and not actually cause SS to go bankrupt faster.

Just like there's a bottom level. It's INSURANCE against poverty. Millionaires go broke all the time. Look at the entertainment industry or sports. Same is true of business, we just don't know the names.

Because if it were, people could already claim benefits based on hundeds of thousands of dollars of income per year when they didn't pay in on that amount. If there's no cap on how large your benefit can be, that would be part of the problem.

you do not pay any on income above $90K. So no one will get benefits based on hundreds of thousands of dollars of income because they did not pay the FICA on more than $90K of that income.

As insurance against poverty for widows, orphans, the disabled and the elderly.

Besides, these instructions for calculating benefits actually don't appear to define the income cap clearly:
http://www.ssa.gov/pubs/10070.html#estimate

and in 2005 I believe that cap is $90K.

I posted is for the benefits. I know there's a cap on taxable income. I'm talking about benefits caps.

you raise one, the other goes up.

Did you even look at the formula I posted? It doesn't say that.

Besides, even if it does, just make a benefits cap. Insurance against poverty in the event of death, disability or old age. It's not complicated.

where premiums differ greatly from person to person but payments remain the same. Unless you do, don't call what you propose "insurance".

Where you can miss whole years of premiums and still pick back up and get your benefits. It's never been exactly the same as regular insurance, but it is still an insurance program for widows, orphans, the disabled and the elderly.

premiums and payouts.

The formula's bendpoints are so progressive that the rich don't get a drop from the money they put in from $ 75 to $ 80,000 anyway. Take off the formula cap and the guy making $ 200 k will pay in twice as much, but he won't get out 10 % more, and you can say you're being fair because you're raising his premium but you're also raising his benefit.

Of course you're raising his premium a lot and raising his benefit a little, but you don't have to add that part.

If you remove the caps for both contributions and benefits there would be a HUGE SURGE in money coming in to the system. In twenty years when these millionaires retire we can tax their benefits to pay back the trust fund.

Very interesting idea...has anybody worked it out?

I think choosing an arbitrary number (particularly one under a couple of hundred thousand) will unneccessarily peel off dem voters and do nothing to hold those who benefitted most (from income taxes reduced due to improper use of the SS surplus) accountable for repayment.

Eliminating the cap seems more fair, but I'm still not clear why we're solving an income tax "deficit" with an SS tax solution.

,...should most contribute to it sustenance.

My position is exempt those in poverty (e.g. living on under life-sustaining wages), begin the deduction at the middle of what's left of the middle class, and remove any cap.

The wealthy could not exist without the labor of everyone else in this nation. They have an obligation to contribute towards advancing a country that serves them including "growing" a middle class and caring for the least among us. It's the moral, ethical and responsible thing to do.

but fear that the repugs would use such a plan to further divide us. SS is not an entitlement program currently, but WOULD be under your scenario (can you imagine the squeals if the $50K-per-year repug had to pay extra SS taxes for the benefit of someone who never paid in?). I think this is the rationale behind Teddy Kennedy's repeated warnings not to cut benefits for the wealthiest Americans. Everyone in, no one out.

That being said, our income taxes should be more progressive, for many of the reasons you have stated.

why Repugs get awaywith claiming tax cuts on the wealthy will benefit the rest of us, when that's never happened? At least not in my lifetime (with the possible exception of JFK's tax cut, but that was because the taxes WERE extreme). Reagan was gonna do it, Bush I was gonna do it and now Bush II is doing it AND IT ONLY MAKES US POORER.

I really need an explanation as to why they keep doing this, it doesn't work but people vote for it anyway!!

Invariably, when income taxes are cut, the wealthy are the primary beneficiaries. The middle and lower classes may get a crumb or two, but that is more than ameliorated by other tax increases (SS, state, property, sales, etc.), fees/charges, and a reduction in services.

Repugs know exactly what they are doing.

Why do people continue to vote for it? Media sucks. People are too apathetic to investigate or diverted by the latest distraction.
:shrug:

the only people who benefit from the program are those who don't put into it, and the ones who put in the most into it benefit the least. People will see that as plain unfair.

the only people who benefit from the program are those who don't put into it, and the ones who put in the most into it benefit the least. People will see that as plain unfair.

You should check out the stats posted by EVDebs below.

How on earth is it FAIR that only 10% of Americans hold 70% of the wealth in this country? Whereas the remaining 90% hold only 30% of the wealth. Worse, 69% percent hold less than 15% of the wealth.

The concentration of wealth is repugnant and completely UNFAIR in a so-called "democracy". Only, reality dictates that we are not living in a country where the interests of "the people" are advanced. We live in a corporate plutocracy where the majority is burdened with advancing the interests of a handful.

Talk about UNFAIR!!!!

SS benefits ARE BASED ON a person's income. A slight degree of progressivity IS built in to the system because there are minimum and maximum limits. SS benefits are calculated to return about 31% of annual income. Minimum is about 12K and maximum around 30K.

SS is not a government-run charity! Its an insurance system that guarantees the elderly won't be completely penniless. It is based on the full faith and confidence in the United States government.

SS needs a minor tweak but the general fund requires a major shot in the arm. Krugman estimates the government is underfunded by 25% over the long run.

David Cay Johnston says the top and bottom have seen their burdens ease (slightly for the bottom, astonomically for the top) while the middle gets squeezed the hardest (people earning between $75K-$550K.) Lower income people were squeezed the most when the Democrats last "saved" SS in 1983 by doubling the tax. Now half of all American pay more in payroll taxes than they do in income tax.

Maybe we can guilt the Republicans into agreeing to a 2% payroll tax surcharge on all income beyond the limit...and bring back the 70% bracket in the income tax.

http://www.webcom.com/ctka/pr196-woodward.html

""Here is a summary of the statistics for the distribution of wealth in the US as
of 1998, the most recent information available that has been fully analyzed:

% of US Population % of Wealth Owned
==========================================================
Top 1% 38.1%
Top 96-99% 21.3%
Top 90-95% 11.5%
Top 80-89% 12.5%
Top 60-79% 11.9%
General 40-59% 4.5%
Bottom 40% 0.2% ""

It has gotten much worse now...

And Kevin Phillips' book "Wealth and Democracy" shows us a quote :

'We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both.'--
Louis D. Brandeis

Bush's tax cuts have to be made up for and paid for by 'everyone else'. Joe Sixpack didn't get much on those tax cuts, and in fact state and local taxes went way up !

into something it isn't now. Any move in this direction will be painted as Socialist Security by the right wing. I'm all for changing the nature of SS but I don't think it should be the battleground for the redistribution of wealth argument.

A total overhaul of the tax structure is required with a focus on tax fairness. We are witnessing the consequences of 25 years of conservative rule in this country. Once we finally admit this is what's happening maybe we can start a dialog on what's really the best role for govenment.

SS is OK for a long time ONLY IF the government fulfills its promise to pay back what it borrowed from the trust fund when its needed...

why would we want to frame this as an SS problem? Not only is it untrue, it undermines the legitimacy of SS, AND allows the real theives and the real problems to slip away unnoticed.

Our ace in the hole is that although many people don't understand what has occurred, they will be mighty PO'd if/when they figure it out.

A town hall meeting or debate on network TV?

Okay, I dreamt a little dream.

more like guillotines and reign of terror. Let's hope our elite wakes up quickly from their engorged stupor.

"Upon these corns too long you've tread,
ye fine haired sons of bitches..." - Black Bart the po-8

The wealthiest and globalizing corporations AREN'T PAYING THEIR FAIR SHARE OF TAXES. You cannot get any more blood out of us turnips making less than $100,000 per year. The middle class jobs are all going overseas or to immigrants (either on visas or here illegally
NATION’S IMMIGRANTS ACCOUNT FOR BULK OF LABOR FORCE GROWTH SINCE 2000 WHILE NATIVE-BORN WORKERS EXPERIENCE HEAVY DECLINES see
http://www.nupr.neu.edu/01-04/immigration_jan.html )

Grant phased-in citizenship for immigrants/visaholders along with simultaneous Living Wage laws, and let displaced US workers sue corporations, as Lou Dobbs has said, for $10,000 per incident (of hiring an illegal alien or displacing a US worker in order to hire an H1B or L1 visaholder).

These actions will dissuade globalizing corporations from abusing US workers.

with much of what you say. I am (strongly) ani-corporate globalization and in favor of a more progressive structure of taxation on income. Please read the rest of my posts...we're on the same team.

I have to fix supper, so I'm off for now. :)

If you want to get at wealth, great, but don't go after wealth with an income tax. The Kennedys, Rockefellers, Perot's and Gates' etc don't make a lot of income. They just have lots of wealth.

than income taxes since they take more from those that own more.

If kept to a low pecentage of wealth, they are also better in that they retain the incentives to earn and invest while spreading the burden.


The best system would use a combination of sales, income, and property(meaning all wealth including real estate, savings, bonds, stocks, etc.) taxes.

A corporate plutocracy!!!

Anyone who moans and bitches about "socialism" is simply out of their minds given the reality of the distribution of wealth in this country which is on the extreme opposite of any kind of "socialism".

A civil democratic society does NOT advocate concentrating wealth and power in the hands of a few.

A civil democratic society EXPANDS opportunity by attempting to level a severely unlevel playing field where a handful of people have HUGE advantage.

A civil democratic society demands that those who most benefit from living in that society most contribute particularly since they are the most able to contribute.

The "ewwwww we have to be afraid, very afraid of our country evolving into socialism" is total bullshit and advanced by those who either are ignorant of reality or are advocating for an extreme concentration of wealth in the hands of the few at the sacrifice of the majority.

and the American dream.

If it weren't for the circumstances of his birth and family money and connections to bail him out, does anyone believe Bush would've amounted to more than a sleazy used cars salesman who frequented seedy lounges to watch baseball on the big screen TV? That is as far as his capabilities would've taken him.

Yet he is calling the shots? The American dream isn't dead--you can still get ahead and still be an imbecile, you just have to afford it- not work hard for it.

reported directly to them...The rich report on the 'honor system', but as we both know, there's no honor in that system, is there ? Hidden income is one of the main points of "Perfectly Legal". Please read it.

Due to the $90K payroll tax payment cap, we subsidize the social security payments to the wealthiest amongst us ! Sure thing they'll claim it's a 'bad idea' ! They have highly paid shill accountants and tax attorneys to spew the disinformation for them.

Truth is raising the cap solves the 'problem' (if you even want to call this crisis (oops, circus)) without having any more of the tax burden fobbed off onto the lower 98 and 1/2% of taxpayers who didn't get to participate in the Bush tax cut extravaganza to the extent of the highest 1 and 1/2%

Again, chapter 8 of Perfectly Legal will be an eye-opener for you.

Doesn't the billionnaire receive the same amount in SS benefits as the individual who has alway paid in at the cap?

Makes we want to re-read the chapter.

It doesn't get much plainer than that. You say you read the book ?

allowed income taxes to be kept artificially low?

Really, I must go now.

By keeping huge amounts of wealth untaxable in this country, we are just putting off the inevitable ... As I said before, you can only continue taxing the lower 98 and 1/2 % of taxpayers so much before even THEY will revolt.

Corporations who offshore jobs in order to jack up stock prices...that too can only last so long.

It's in the best interest of the super rich to wake up and smell the coffee !

as the book "Perfectly Legal" points out are 'hideable'. They hide it here, they hide it there, they hide it anywhere the IRS might be able to find it and tax it.

And on top of that they can pay tax attorneys to help get laws passed that hide it AND pay for the fees of the tax attorneys...neat deal, huh ? Oh, and don't get me started on globalization corporations offshoring jobs and getting a tax break to do it.

No wonder Warren Buffett wants to see some increases in corporate taxes ! "Warren Buffett Urges Higher Corporate Taxes "
http://www.commondreams.org/headlines04/0306-01.htm

So let's just raise the cap and call it a day. Whattaya say ?

We're talking payroll tax, not income tax. Sure they hide money, but by definition they're ALL pitching in the $90K max. As its currently constructed, SS will pay these guys the same maximum amount-- about $36K.

Your response doesn't address the question of how the ultra-rich rip off the SS system. I'm too lazy to go look for the book. Why don't you just summarize for us what he said on this subject?

buzzflash: "'David Cay Johnston, Author of "Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich -- and Cheat Everybody Else," the Book on How the Middle Class is Getting Ripped as the Rich Pad Their Pockets "'

http://www.buzzflash.com/interviews/04/03/int04016.html

Social security taxes are just part of the overall tax structure that is geared to screwing the 'little guy' as Leona Helmsley would put it.

Also found this interview with specifics on SS by Johnston:
http://www.jimnewsom.com/PFW-perfectlylegal.html

"Prior to the massive tax cuts for the wealthy by the current Bush administration, the largest impact on the taxes of working Americans came in 1983, when the Social Security payroll tax shifted from a “pay as you go” system to one in which the government began collecting more than was necessary to meet current benefit payouts. At the time, the increase was called a “bail out” of the Social Security system, intended to insure that the system would still be solvent when the baby boomers began retiring thirty years later.
“Instead,” Johnson says in the book, “what happened was that the working poor and the middle class, indeed everyone making up to the maximum wage taxed for Social Security, paid more taxes than were needed to allow generous tax cuts for the rich.” In our conversation, he said, “Congress could’ve chosen to spend that money on tax cuts for the middle class. The promise at the time was that, in fact, we were going to pay off the national debt. That was the official claim; we were going to pay off the national debt to increase our borrowing capacity. Now, if we had balanced the budget all these years, we would have paid off the national debt.” But that’s not what happened. Furthermore, when George W. Bush campaigned for the presidency in 2000, he spoke of a Social Security “lockbox” to assure that “Congress won’t be using payroll taxes for other programs.” But, as Perfectly Legal points out, “Bush’s tax plan depended on raiding the Social Security lockbox.” It is this redistribution of income UP the income ladder that David Cay Johnston wants taxpayers to understand. While politicians have railed about welfare queens and giveaways to the poor, recent tax policy has resulted in something entirely different.

“The most important thing I want to get across to Americans,” he said, “is that if you are in the middle class and the upper middle class, if you are in the $30,000 to about a million dollars in income, the government is literally taking money out of your pocket and funneling it to the super rich.

“The surplus Social Security tax is just spent. Every non-politicized economist who’s thought this through recognizes that to redeem the Social Security trust fund treasury notes is going to require higher income taxes on the best-off Americans somewhere in the future. There’s just no two ways around it.”

"The surplus Social Security tax is just spent. Every non-politicized economist who's thought this through recognizes that to redeem the Social Security trust fund treasury notes is going to require higher income taxes on the best-off Americans somewhere in the future. There's just no two ways around it."

Isn't this what I have been saying?

He doesn't say that SS on its own disproportionately benefits the rich, because it doesn't. The tax system as a whole certainly favors the ultra-rich, but not SS. The payroll tax figures into the overall scheme because its over and above the income tax system.

Like I said earlier, many lower income Americans pay MORE in payroll tax than they do in income tax. Therefore discussions on tax fairness are disingenous when they only talk about income tax rates and DON'T talk about payroll taxes. The tax system overall is highly skewed to benefit the wealthy, but not SS when considered on its own.

SS was designed as a program that is based on earned income. Its benefits are based on earned income over one's life time. It has a slight degree of progressivity built in (which does NOT favor the wealthy). Within the confines of its design, it is NOT unfair. Certainly not as unfair as the income tax system which allows the ultra-rich to defer income and leave wealth untaxed.

I think the big problem is when we conflate SS/payroll taxes with income/other taxes. The payroll tax is dedicated to SS/OASDI. Its supposed to be off the books; its supposed to be completely separate from the general revenue budget.

SS is pretty fair and its NOT in crisis. Its the other part, general revenue, that's going to be in crisis if we don't plan for how we're going to be able to start paying back all those IOUs we owe to the Trust Fund when it comes time. The Bush** tax cuts are a disaster because they don't provide any way to pay back these IOUs.

page 123-124 hardcover

"That is, Social Security taxes were used to pay the ordinary bills of the government, making up for the taxes that were no longer being paid by the rich because of the 1981 income tax cuts....

Using Social Security taxes to subsidize tax cuts for the rich has taken a terrible toll on the finances of those who make up to the maximum wage subject to that levy. The 90% of Americans who make less that the maximum wage taxed for Social Security had $1.7 trillion in extra taxes taken out of their paychecks just to help the rich."

I could go on, but I just wanted to stick it in (and twist) !

In post #32 you said:


You stated the cap subsidizes SS benefits for the rich. That's incorrect. The relevant quote from Johnston in your last post is:



So we see Social Security taxes don't subsidize the SS benefits for the rich, they subsidize the income tax cuts for the wealthy.

I'm just trying to stop you from conflating the payroll tax with the income tax. The payroll tax hike of '83 generates a huge surplus. The income tax cuts are subsidized by dipping into the trust fund to finance deficit spending. That's not a problem as long as the Treasury eventually has the money to pay back what it borrowed from the trust fund. Therefore we have to start taxing (through income taxes or wealth taxes) the wealthy to make sure that SS can be paid back. THAT'S where we should focus our fight on tax fairness, NOT on SS. SS is fair.

Now please allow me to un-twist the dagger, slowly pull it out, wipe off the blood, and hand it back to you.
:P

as you say. But Bush, like Reagan, can't call them that so what ya gonna do ? Revenue Enhancements ! "Conflating" income taxes and SS taxes are Precisely What the book is about. The wealiest are not on "payrolls", hence the conflation due to hidden income or non-reported incomes. The poor are under the microscope, while the super rich are on the 'honor system. Thanks for making my point for me...

If you wish to persist in the republican's bizarre parallel universe where Social Security taxes aren't being subsidized for them, and the vast majority of taxpayers aren't making up for their tax cuts (someone has to if the budgets stay the same), then continue by all means.

The payroll taxes and income taxes already conflate due to the fact that the non-wealthiest have their incomes reported to the IRS ... the wealthiest have the luxury of hiding incomes...See what I mean Vern ? Now I'll twist some more, if you don't mind !

BTW, you were directing your arguments with me...those are David Cay Johnston's quotes, not mine. Go after him, if you wish. I'd love to hear that debate any time.

be happy to do away with the whole system, but they are willing to contribute up to certain amount.

I agree with the original post of looking at the tax cuts and what happened to the trust fund, I heard a figure of 1.7 trillion trust fund that is just a piece of paper. We cannot just demand that the trust fund be made whole because the government does not have the money.

It probably should be a combination of taking back the tax cuts, they were put on a credit card while the war was planned, and maybe raising the cap. SS is just one piece of the problem and the other problems should be addressed at the same time.

I think the tax cuts need to be discussed especially with the money being spent on the invasion.

This site shows almost 1.6 trillion in trust funds through 2004, not sure if it is a final 2004 figure.

http://www.ssa.gov/OACT/ProgData/investheld.html

would end the regressive nature of the social security tax. There is no reason why someone making 90,000 should pay the same fica as someone making 5 million.

Its based on income earned over one's lifetime and its actually slightly progressive. Everybody gets back benefits based on how much they put in. Payroll tax stops at $90K because there is a cap on benefits. Because of this cap, if you pay payroll tax on income above 90K you won't ever get the money back.

SS was not designed to redistribute wealth. It was designed as a simple insurance program that pays an annuity upon your retirement. If you want to make an argument that it should redistribute wealth to make up for the lack of progressivity in the rest of the tax code, then you're opening up a great big can of worms. Its a fight we can't possibly win under the present circumstances.

I think its much easier to just save SS in its present form and fight for tax fairness in other areas first. Especially when SS is NOT in crisis.

methinks you make my points much more eloquently than I do. :)

Thank you for posting!

we can give a tax cut to low wage earners and tax all income the same as wages and strengthen the system at the same time.

They're not regressive.

"But the payroll tax is a flat tax, paid disproportionately by low and middle income workers. The income tax is a progressive tax and is paid disproportionately by high earners."
http://www.csmonitor.com/2005/0127/p09s01-coop.htm

And, mind you, that's only the federal income tax...overall, taxes in toto are regressive when you add 'em all up , state, local, federal--again, see "Perfectly Legal". Basically, the US has a 'flat tax' structure of about 20-25% for everybody, so even the second sentence is really incorrect. Given the state of journalism today, we're lucky to have gotten the word out about "Perfectly Legal". It's a wonder it got into print !

I can see no reason why people making over, what is it now, $90K should stop paying into the system.

It seems like a no-brainer to me.

for lower income people, and shouldn be higher for high-income people.

And, really, I don't understand why it isn't rolled into progressive income tax?

being part of the general fund and implemented in a manner similar to a Universal Healthcare program. I'm just not sure how successful such an argument would be in the current political climate...but it might just scare the sh*t out of the elite. :)

My basic question is: Why would we want the government's failure to honor the debt owed SS to be framed as a "problem" with the program itself?

(I assumed I could respond to you since you asked me a direct question)

peace

Seems like a duh solution.

"...This is where the second twist comes in. Because the surplus payroll taxes were handed over to the federal government (in return for Treasury bonds), this meant ordinary income taxes could be kept low. After all, the federal government has a fixed need for money, and if it gets excess money from payroll taxes it can afford to keep income taxes lower than they'd otherwise be.

But the payroll tax is a flat tax, paid disproportionately by low and middle income workers. The income tax is a progressive tax and is paid disproportionately by high earners.

So this was the implicit bargain in the reforms recommended by Greenspan and signed into law by Reagan: From 1983 to 2018, low- and middle-income earners would pay excess payroll taxes. This allowed income taxes to be kept low, and primarily benefited high earners.

Then, beginning in 2018, instead of raising payroll taxes to pay for baby-boomer retirement benefits, Social Security would begin selling its bonds back to the government.

To pay for those bonds, income taxes would be raised - high earners would begin paying higher income taxes.

In other words, the fact that income taxes will eventually need to be increased in order to cover Social Security benefits was part of the Greenspan/Reagan plan from the start.

That's the real meaning of the trust fund: It's an implicit promise that high earners will keep their part of the bargain and begin paying their share of Social Security's costs when the baby boomers retire.

So to suggest, as Senator Allard and others sometimes do, that the trust fund is just a bunch of meaningless IOUs that will never be paid back is more than just a breach of faith between generations. It's a breach of faith among taxpayers.

For more than two decades, low- and middle-income Americans have kept their part of the bargain, paying more in payroll taxes than Social Security needs and helping to keep income taxes low. In return, beginning in 2018, high earners are expected to start paying a bit more in income taxes in order to help keep payroll taxes low.

That's the bargain that was struck in 1983. It's one we should keep"


http://www.csmonitor.com/2005/0127/p09s01-coop.htm


Can't say it enough.

We're rolling in money!



:party: