Discussion for article #233261
Some “job creator” should tell me why there should be a cap at all. I don’t see a reason for it.
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There is a cap on the tax because there is a cap on benefits. The idea of Social Security was that your benefits would be tied to your earnings, and so if you tax earnings that have no impact on benefits it was seen as unfair.
Changing it would turn the program from an earned benefit to a partial entitlement. I don’t have a problem with that, but this is the rationale.
Myself, I would like to see the cap on taxable income completely lifted while benefits increased instead of this doughnut hole like Sanders proposed. Increasing benefits would partially make up for the failed experiment of 401(k)s and the loss of pensions.
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“Without a cap, it’s possible that multi-millionaires and billionaires would accrue huge Social Security benefits by the time they retire. The cap also arguably helps politically by keeping Social Security as a social insurance program instead of welfare where the rich pay in to help the poor.”
This makes no sense to me. Benefits are not related to the actual amount that a person has paid in. Also, calling it a “welfare program” is just ridiculous! You can’t get SS unless you have worked and paid in for a number of years.
If we let the Luntzes of the GOP define things inaccurately we all lose. Again!
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I really don’t have an issue with a billionaire drawing millions/year in Social Security, provided they paid in many millions more based on their income while they worked. Also, benefits beyond a relatively low amount are taxed, so they would give some of that back, whereas a low income person would keep 100% of their benefits. Nothing wrong there. The other issue is that many forms of income-interest, dividends, capital gains-are not taxed at all for Social Security and the rich often have much, if not most of their income from those sources. If all income were taxed, the rate could be lowered, which would help both workers and small business. while making the program secure.
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It has been reported that the top 10% have rebounded 100% from the financial crisis, and are 100% richer.The bottom 90% are still recovering. For the love of your country, tax the rich.
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I’ve always suspected there are investments that provide good returns, and that they are in the portfolios of the rich and not in anyone’s 401K. Hey, if you’re a Wall Street type with a good investment opportunity, do you call the guy who lost his job, his home, and half his 401K; or do you call some rich person? It seems only fair the wealthy should pay more after they screwed the rest of us. But watch, in the end all the politicians will agree the middle class will take it in the shorts one more time – lose the job, the house, the 401K, half their Social Security, and pay thru the nose for Medicare because these people are too poor to pay a bribe, er, make a sizable contribution to anybody’s campaign, and too “rich” to “really need it”.
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There is a reason for the cap, and it has to do with benefits paid. I am not sure we want to pay large sums in social security to billionaires, but of course that could be dealt with by a benefit cap. A benefit cap that is too sever would lead multimillionaires to demand they get to keep more of their money. The problem isn’t the cap, it is where the cap has been set. The income subject to the tax needs to move back to 90% of the available income.
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Maybe it’s time for the middleclass to make some noise. Real strikes, real protest, real mobilizing, real shut downs, of mass transit, highways, bridges, real slowdowns, sit ins, at banks, wall street, at government buildings at Boehner’s office. Think of the civil rights movement, things would never have changed if black folks and yes some whites folks didn’t say enough is enough. It’s so crazy it just might work.
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A lesson in how the way things used to be still continues to shape “moderate” thought about how things need to be now.
The cap does exist for a good reason, policy experts told TPM.
The cap exists for what used to be good reasons back when the CEO to worker pay was a multiple twenty to thirty rather than two hundred to three hundred:
(data source https://docs.google.com/viewer?url=http://www.epi.org/files/2012/ib331-ceo-pay-top-1-percent.pdf&hl=en_US&embedded=true: )
Social Security benefits are paid in part based on how much people pay into the system.Without a cap, it’s possible that multi-millionaires and billionaires would accrue huge Social Security benefits by the time they retire.
Because there’s no possible way to adjust benefit rates at the same time you’re adjusting tax rates so as to make the upward curve more shallow at the higher income levels. It’s inconceivable!
The cap also arguably helps politically by keeping Social Security as a social insurance program instead of welfare where the rich pay in to help the poor.
Yeah, that worked great before income distribution was controlled by high top marginal rates and we didn’t have Third World levels of income inequality. When Social Security was a possibly small but still meaningful part of a retired CEO’s retirement pay, it made sense. Now that you have a ruling class for whom Social Security is a loose change under the seat cushions, well, Surprise! Turns out you get a ruling class that’s been systematically attacking Social Security as an unsustainable welfare giveaway to the undeserving peons for for thirty fucking years now!
For thirty years, there’s been relentless, and sometimes successful, pressure to generate fake crises in Social Security solvency as a means of slashing benefits, raising retirement ages and changing the benefit scheme depending on when you were born, by deficit hawk goldbug billionaires and their tools. The idea that capping taxes guarantees buy-in from the rich went out with rotary dial landline phones and 45 rpm records.
Either accept the argument of the plutocrats that it’s a social welfare scheme and fucking run it like one by making the funding mechanism less regressive or give the plutocrats a real stake in it again by making the funding mechanism progressive and allow the benefits for the top earners to get high enough that it will be more than a rounding error to their retirement income such that they actually care about it a little bit again.
But for fuck’s sake, either way, you need to retire all the people in your goddamned think tank who think its still the fucking seventies.
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I have no problem with asking the rich to pay more to preserve social security but I also think all Americans should pay something more even if it’s just symbolic. I favor this option because I believe it is important to renew the sense of Social Security as a shared national enterprise as Roosevelt originally envisioned it. There are just very few common projects that bind the American polity together these days, especially with the abolition of the draft and the flight of the financial elite from public schools.
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Pop the cap!
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I think you are exactly right-- raise the cap over time so it is like the Medicare tax, which applies to all earned income. But, at the same time, raise the benefits so everyone paying the additional tax gets additional benefits. I think this is particularly important, today, with the withering of defined benefit pension plans in the private sector. I would also add a new provision to Social Security that would allow - but not require - individuals and their employers to purchase additional retirement benefits with after tax dollars. I think these measures would guarantee very broad based support and put the Republicans on the defensive now and in 2016.
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You do not understand how SS works. NOBODY gets benefits if they haven;t paid into the system for AT LEAST ten years. There is no free ride here.
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Said it before, I’ll say it again:
Tax every penny of compensation. Whatever direct income, tax it at the standard rate. Flights on the corporate jet? Tax it. Apartments in NY, penthouse hotel room in Shanghai, daily delivery of fresh flowers? Tax it. Deferred compensation into an IRA, a la Romney? The company pays a 100% match into Social Security.
Means test benefits. 1000x the minimum benefits paid to wage earners in income, not assets, you get the same minimum benefits. Tips for your caddy, dontcha know.
And as for the article, is Social Security supposed to run out of money in 2033 or 2060 or whatever, or is it supposed to reach the point where payments require drawing down the trust fund? Big difference in my mind.
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With all respect, I don’t think raising the Social Security payroll tax cap really qualifies as “taxing the rich.” That is a kind of class warfare description of what is really a matter of tax fairness that causes those at the higher end of Social Security payouts to chip in more over their work lives. It is not another librul socialist wealth re-distribution scheme. It is common sense.
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That is dangerously close to insider trading, something of which the SEC takes a very dim view.
“…We do not support increasing taxes on the American people…”
Of course you do, Republicans.
You have happily, eagerly, levied new taxes on Americans who simply want to power their houses with free energy from the sun. You’ve happily taxed people who simply want to be responsible toward the environment by taxing hybrid cars.
Republicans love taxes, especially the ones their corporate donors sneak into the cost of their products – known as “the sale price” – that taxpayers don’t even know are redirected to the campaigns (read that: living expenses) of Republican legislators.
The entire purpose of the Republican Party is to bilk the middle class.
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To a certain degree, that’s the general problem with lowering any taxes; you reduce the interest of the Moneyed and Powerful in how government runs. The more skin they are forced to have in the game, the more concerned they are with how effectively its being spent.
I’m definitely on board with taxing all forms of income.
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