What is wrong with Eliminating the Social Security 8% tax ceiling?

Lets say, we ONLY increase that 8% to infinite dollars, as opposed to what it is now.. which is what 150k?
Bill Gates pays a ridiculously tiny amount of Soc Sec tax.
I know the full amount is 15% where "half" is paid by the employer, and half by the employee.

lets say only the employees has to pay the un-ceiling'd amount, that way the employer doesn't feel it - business should like that bit, they don't have to pay increased Soc Sec tax.

How much money would that bring in?

lets look at a football player.

They make on average 1,000,000 dollars a year. (yes some may so much fucking more, but bear with me)
They PAY only $12,000 in Soc Sec taxes - that's 8% of 150k... that is only 1.2% of 1 million dollars, hardly fair.
NOW... lets say they have to pay their FULL share, a full 8% FICA tax that CAN NOT be hidden, or gotten back.
That would be 80,000 Dollars... a difference of 68,000 dollars.

That's ONE football player, making 1 million dollars.

how many hundreds of football players are there making at least that much?

lets say there are 100 football players whose total yearly salary averages 5 million dollars a year. (that's mega stars with MAJOR contracts and the lowly grunts included) This is 5 Million averaged,TAXABLE income - so much of their money has already been hidden etc.
100 * 5 million = 500 Million dollars gross.
8% of 500 million dollars is 40 MILLION dollars.
as opposed to 12k *100 = 1,200,000, 1.2 million dollars.

That is a difference of 38.8 MILLION DOLLARS, on 100 PEOPLE!

That's just 100 football players, an average. That doesn't include Hollywood, baseball players, basketball players, or the fucking evil assholes running industry... thats JUST 100 football players.

Now imho that is a very low, conservative estimate.

That 38 million dollars (we'll dump the .8 into Soc Sec) can insure 3167 people at 1,000 dollars a year.
100 people can insure 3167 people at a very high monthly rate, simply by paying their fair share of Social Security tax.

You can pretty much double that figure if you made the employer pay his full share too.

lets look at the fat asshole blow hard.
480 million over 10 years.
48 million a year
his fair share should be $3,840,000 he pays $12,000 dollars in FICA - in theory - a year.
That could insure 320 people a year at $1,000 dollars a month.

in reality the premiums will be M U C H lower to cover people because Medicare pas based on actual usage, not profit motives.

By ONLY using the increased social security money, you prevent new taxes.

In reality there never should have been a ceiling on Social Security. And this should be covered under social security. If the society is not protected, there is no security.

Perhaps there should be a donut hole. lets say between 150k and 300k there is no increase. but as soon as you make 300,001 dollars taxable a year, you pay your fair share of Soc Security again.

SO... that seems pretty straight forward to me.
You simply make the rich pay their fair share of social security. you give the employers the break of not having to increase Soc Sec payments on their side (self employed MUST still pay the 8% increase. if you are self employed and making that much you doubly deserve to pay your fair share for the opportunity to do so).

That would exponentially increase the amount of money for Social Security which could pay for medicare for everyone, forever, as well as a livable Retirement for everyone as well.

I can see why the GoP hates that idea however. It makes too much sense.

coming-in at retirement age doesn't need the dough!

For example someone making an income of 100K or more during retirement seriously doesn't need the money.

It goes back to the original intent of Social Security as a safety net, not a retirement plan.

There is also a sense that they earned their Soc Sec Check,but I agree in at least principal.

The more money you make in retirement, the less your Soc Sec check should be...but this amount must be gaged carefully as not to be too unfair to the middle class.

100k isn't what it used to be. and in 40 years it'll be even less. We can't make the same mistake that was made in the beginning.

but there should be a sliding scale.

I would also raise the amount seniors can make from part time jobs before deducting like they do now.
I have worked with my share of seniors when I was in Fast Food, and they mostly just wanted to get out of the house and feel productive. But they could not do too many hours otherwise their Soc Sec would be harshly cut!

IMHO that number should also be raised to above poverty. I don't see the logic behind punishing seniors who need more income and go back to work (who are themselves paying into Soc Sec) because Soc Sec is already too low.

but Social Security reform is another thread entirely.

This thread is just about increasing income to the Soc Sec coffers to pay for universal Medical.

But I agree there should be no ceiling, either. If they don't want be sure that their fellow countrymen are well and cared for, they should seek another country, greedy, unpatriotic, flagwaving bastards.

fuck the means test.

It's not "charity", because it's compelled.

I am pretty sure that they did not. They already needs test it by subjecting it to tax at higher income levels. The intent of Social Security was that it was a universal progam with everyone participating and everyone reaping the benefits of the program. The payback for someone making $25K/yr or less is huge (participation rate at 90% for most of the income).

I agree that all income should be taxed for Social Security, but those higher earners should be able to reap the payback percentages the top group already gets (15% participation - perhaps done in acturial current year dollars by a reduction in their contribution level to keep from skewing the system too much later on down the line). Right now it is the two couple family with each making just over $100K that carry the system. Making income accessible to benefits is a disincentive to bury income - that is one of the beauties of Social Security.

Lots of promises were made when Social Security was first implemented, and most of those have been broke (two promises were a low cap on the earnings to be taxed and also the percentage of income to be taxed). For most of my working life I have been paying far more into the system than Pay as you go would indicate - building up the "Trust Fund" of U.S. Treasuries. Our irresponsible government decided to spend every dollar of this savings and take on huge deficits even beyond that amount. Not a problem with Social Security, but a problem with our government as a whole.

I think needs testing S.S. much more is counterproductive. I am a saver, and I will probably have access to somewhat higher income when I retire as I pull out my IRA/529 dollars. Social Security for myself and my wife will already be close to meeting our needs in retirement. My employer and I have been taxed at over 13% of my income for my entire working career. Depending on where you decide to draw the line on needs testing retiring at 55 and depleting my savings looks like an attractive option versus being penalized for being conservative all my life. My income from 55 to 67 will not do much to increase my S.S. payments in retirement since I will already have the maximum years worked, and any inflation increases to my salary will not have much impact at the 15% participation level. The Social Security and the U.S. Treasury will lose 12 years of taxable income from me though.

social security was never designed to only be distributed based on "need". i can agree there are excellent reasons to extend the ceiling, but the idea that just because somebody has higher income that they don't deserve their SS is bogus. it's THEIR money. social security was designed with that in mind.

There should be no cap though.

Do you honestly think any politician would vote for that?

never intended to be a welfare plan, where everyone paid but only some benefited. It was intentionally structured that way to gain support from the program.

People that pay into it their entire working lives should be able to get the benefits.

and you know, those people scream so much about how rough they have it, trying to live on their meager earnings ...

ohez noez we have to payz ta><ez!
you'd think you were killing their first born, despite them more than willing to kill ALL OUR children for their ends.

Fun fact. If you taxed 8% on a billion dollars (known to have been made by a few people a year) you would get $80,000,000 that 80 MILLION dollars towards Social Security and Medicare for all.

At 1000 a month that would insure the number of the beast... 6,666.66 people XD

:evilgrin:

so who disagrees that we should tax the mega rich fairly?
don't be a coward and just un-rec... I truly want to know your reasons.
I was at +1 =3 now im back to 0.

I rec'd you up to 2, and a second later you're back to 1. :rofl:

lets see how long THAT lasts LOL.
I've never had a topic make it into greatest before... I wonder if I'll spend a second or two before i'm de-rec'd back into the ground XD

Their wealthy leaders, including Rush, would have to actually pay extra for being the beneficiaries of the best our society has to offer.

Forced to pay higher taxes on their millions would immediately disincentivise them from earning millions. Suddenly they'd realize it's just not worth all the hard work and would instead become lazy, knowing it is easier and more profitable to sit back and collect welfare.

So we'd obviously become a nation of welfare queens, because why work hard at football to only take home 3/4s of a million instead of the entire million, when you can stay home for a few thousand a year?

:sarcasm: for the sarcasm-challenged ;)

sure they may have to give up the private plane, but the weekly trips to the Job and Family Services office is just like an exotic vacation.

implemented SS with no Republican support with a cap. You want to tax billionaires? Bring back the estate tax, treat capital gains like ordinary income, and increase the income tax.

The Medicare tax is 1.45% without a cap.

The Benifits for those who earn more than around $40k in earned income have to recognize 75% of their Social Security Benifits as taxable income.

It's a good thought, a good starting point but it would help if you looked for the right numbers.

Income over about $54K participate at 15% versus 85% for those making about $9K (the high earners susidize the low earners). On top of that we ask the high earners (who probably will have more income in retirement) to pay taxes on their Social Security (effectively needs testing it - something that was not intended at its beginning).

Thank goodness for the two income working couple each making about $105,000. They subsidize the program to the maximum (compare the amount of taxes they pay versus the one income $210,000 person with a stay at home spouse). Taxes for the two income family $13,020/yr for at least 35 years assuming a 2.5% interest free rate of return over 35 years this is $715,000 ($1.4M if employer's contribution is added), S.S. combined checks - $60,147. The same calculation for the $210K earner - $358,000 ($715K with employer's contribution), S.S. combined checks - $45,110. Compare to a $25K married wage earner - S.S. check of $19,767 and taxes paid with interest at 2.5% of $85K/$170K. No wonder privitization talk never went anywhere. The payback for a large segment of the population from S.S. is great.

We can set as high a tax rate as we want on high earners subject to the political will of our nation. The question becomes how much is too much. Right now a couple with two children can earn $42,000 without paying a dime of Federal income taxes.

I think the S.S. rate should be raised to infinity so long as those individuals get to participate at some rate (perhaps 5% instead of 15%). S.S. was supposed to be a plan in which all contributed and all benefitted.

income folks if they raise the cap to say $250k.

The reason only half was choses as the taxable amount was because the Employers contribution is a deductible expense for the business.

We should be fair across the board.

Lower incomes still report SS as income but since their deductions and exemptions provide a non taxable base, they pay less tax on that income.

Putting a ceiling on FICA was a horrible idea, and never should have been done to begin with. If people are wealthy then they SHOULD be paying more into social security for everyone.

person will receive more SS benefits upon eligibility than currently? Or is this extra contribution distributed among those who paid less.

They will contribute more, than through means testing, will receive nothing in return.

:shrug:

Do away with that ceiling, and you could CUT some of those payroll taxes and still come out ahead.

percentages are computed. The cureent cap is lower than your "...which is what 150k?..."

http://online.wsj.com/article/SB124813343694466841.html

<snip> The ceiling, which is indexed to the average growth in wages, is $106,800 in 2009, up from $102,000 in 2008 and $97,500 in 2007. (Employers and employees also each pay 1.45% on an individual's total income, with no salary ceiling, to fund Medicare.)
<more at link>

that seem to get over looked in the social security tax issue:

1) "means testing" - the original intent of FICA was never to be a welfare program but to apply to all citizens not just those from the lower income levels. If it had been the intent, it is extremely likely this would never have been passed.

2) lifting the cap - again, because this was never intended to be a welfare style program and that your retirement payments are based upon your earnings, if you contribute more, your benefit amount will be higher. ie a person making $100K is paid more at retirement than someone making $40K. So lifting the earnings cap would mean lifting the payment cap which would have almost zero net effect.

And the millionaire only pay on less than 1% of his income? Why should we not all pay the same rate?

as more income moves to the untaxed state it reduces the contribution levels and further endangers the S.S. system. A quote from the article

http://online.wsj.com/article/SB124813343694466841.html


Lifting the earnings ceiling could result in higher Social Security benefits payments to higher-income individuals, since benefits are based on a worker's highest 35 years of earnings. But the additional tax revenue would have decades to earn a return, thus offsetting the cost of the additional payments.

Social Security Administration actuaries estimate removing the earnings ceiling could eliminate the trust fund's deficit altogether for the next 75 years, or nearly eliminate it if credit toward benefits was provided for the additional taxable earnings.

Employers oppose changes that would increase their share of payroll tax. In addition, eliminating the ceiling would prevent employers from using a controversial but common technique, based on payroll taxes, to award additional benefits to executives who participate in rank-and-file pension and 401(k) plans.

and when the millionaire retires, you get back a # based on WHAT YOU PUT IN.

SS is not a welfare program . it wasn't deisgned that way. it is designed to pay you back WHAT YOU PUT IN based on various formula (death rate, etc.)

It's not an investment program either.

and the payouts are based on (among other factors) primarily WHAT YOU PUT IN. i had a 5 yr window where i didn't pay SS (because i wasnt' required to. my employer was exempt). iwill naturally get less SS monthly payments than i would have if i did put in those extra dollars during those years

my point is simple. we don't means test SS, and the amount paid out is related to what is paid in.

except for those poor saps who die early and get notning. in this respect, SS actually has a disparate negative impact on africanamericans (amongst others)

Oh wait...

Social Security is NOT a 401k fund. Doesn't resemble one in any way.

So why are we INCREASING this tax?

What it will help is to allow the federal government to continue to hide deficits with surplus SS revenue for another 7 or 8 years, and to put off for the same amount of time the day when SS 'surplus' has to start being used to pay retiree benefits.


Increase income taxes on the wealthy. Treat capital gains like earned income. Tax estate transfers. Fund government operations from its own revenue stream and stop funding it with retiree pension funds. Reduce our bloated military budget by 50%.

But all you have to do is see what happened to people who lost out on savings in the stock market and their 401ks. Before ssn and people were falling through the cracks. People were dying and living poorly. Only the young people think that way. But what would happen if there wasn't any ss or medicare. I doubt most families can support their elderly parents. Those are facts. Now am a year away from ss am happy that I have a retirement coming in. It may not be much but it will help me. Everyone should have a safety net. I say stop your bitching because before you know it you'll be collecting it yourself.

I've maxed out on FICA for the year. My paycheck two weeks ago was about $32 more than the usual amount I get. When I looked at my pay stub to figure out why, I knew I'd be very happy with the checks I'd be getting for the rest of the year.

That first changed amount still had most of my usual FICA deduction in it before hitting the yearly ceiling. I logged into my bank account this morning to verify what I suspected I'd be getting from that point on, and yes, today's direct deposit was nearly $280 more than usual. This means I can count on an extra $280 every two weeks for the rest of this year.

It's hard to turn down that kind of extra money, which is, I suppose, one reason a lot of people turn Republican as their incomes go up.

One proposal I've heard, to keep upper middle class voters happier, is the so-called "doughnut hole" where FICA deductions still max out as you reach around $150K in income, but then the deduction kicks back in again when income reaches $250K and higher.

I can't help but like the sound of that, but I'd be able to accept having no cap and no doughnut hole. And even if I do end up personally paying out more in FICA deductions, I wouldn't mind seeing my eventual SS payouts capped even my contributions aren't capped, so that SS turns into more of a welfare system than a contributory system as far as wealthier tax payers are concerned.

It's hard to explain in a sound bite, so most people don't know about it.

half way through the year or earlier.

It's some variation of the "we had to destroy the village to save it argument"; Social Security must remain regressive, we are told, else the rich will become very cross with us and become even more greedy with their contributions to society.

The argument makes no sense to me.

I'm aware of the feeling people have that "they paid in" and all that. I do not give a fraction of a shit.

There's ZERO defensible reason Bill Gates needs a government check. ZERO, period. End of debate.

but you'll never hear any politician say that out loud. I happen to think income redistribution is a good thing. Social Security works because productivity keeps rising.