I Can Solve The Social Security Solvency Issue In THREE WORDS!!!

[WeDidIt]

(1) Remove
(2) The
(3) Cap

Social Security would never again run a risk of being insolvent.

[billyoc]

1. Exactly right.

Remove the FICA cap and the system will be fine.

[Leo 9]

2. I was going to guess "Raise The Cap",

but "Remove The Cap" would be even better.

[WeDidIt]

3. Fight to remove

accept a huge raise in the cap, like to $10.000.000/annum, though.

:evilgrin:

[Phoebe Loosinhouse]

4. Correct. Easy. nt

[napi21]

5. I don't necessarily think the cap should be completely removed.

I can understand why someone earning $millions IN SALARY wouldn't want to pay SS tax on his total earnings. I do think that the answer is to RAISE the cap. If it was raised to something reasonable, like $135,000, and then linked to inflation so it would automatically increase based on the annual inflation rate, we'd never have to have this battle again!

[hfojvt]

7. it already is raising automatically

has been for a couple decades, at least

[nichomachus]

10. But that raises the question

of who should be making "$millions IN SALARY."

Really. How many people are worth millions of dollars per year -- when people who are responsible for people's lives make a tiny fraction of that?

Yeah -- if I were making $35 million a year, I probably wouldn't want to pay tax on it either. But, your post just accepts the implicit assumption that there are scads of people who are worth that much.

Anyway, most of these people find ways to get the money transferred from our pockets to theirs without it being called "salary."

[Egalitariat]

6. That would change SS from being "a contribution to my retirement" to being "another tax"

for anyone making over whatever the cap is. I know there's not a lot of empathy for those people here, but I bet there are a bunch of them and it would probably weaken (if not eliminate altogether) their support for the program.

But I agree with you that would provide a tremendous shot in the arm for the financial resources of the program.

[hfojvt]

9. there are a bunch of them, but not more than 5% of the population

I think it would change the benefit schedules too though.

[Mariana]

24. It already is just another tax.

It has been since the SS tax began collecting more revenue than was being paid out in benefits. The excess, every penny of it, was and is still being spent on other things. The minute that happened, SS tax ceased to be only "a contribution to my retirement" and became a source of general revenue as well.

For all these years SS tax has been used to keep income tax rates artificially low! Imagine how high the deficits would have been all that time if Congress hadn't been able to apply the SS surplus revenue against them.

The cap should be eliminated.

[Junkdrawer]

8. But high income earners KNOW that SS will never payout to Boomers....

They don't want any skin in that game.

[nichomachus]

13. Why won't it?

The only reason it won't is because the fascists will convince the boomers that it's inherently insolvent -- not that the money has been stolen by the corporatists.

Social Security and Medicare would be fine with a few minor tweaks and maybe a small infusion of cash -- certainly far less than what we've wasted on bank bailouts and two failed wars.

The "SS is doomed" propaganda is designed to mislead baby boomers into thinking that there won't be enough money because of all the people going onto SS and too few people to support the system.

The actuaries who set up and adjust the plan were well aware of population trends. They are not stupid. If anything, actuaries are boringly versed in that sort of thing. It wasn't like some cosmic oversight.

If SS and Medicare fail, it will be because of a deliberate attack by the corporatists. They have been going after this since the tried to overthrow the government in 1934.

I still think FDR failed us by not hanging Prescott Bush and a couple of dozen corporate CEOs.

[Junkdrawer]

17. Why won't it? Because the US Treasury would have to pay back the $Trillions....

the boomers paid in. And until the government is RUN by representatives of The People and not Corporate representatives, they will find a way to avoid that repayment.

The FED and Treasury has already given Wall Street $11.4 Trillion. That's in the neighborhood of what SS would need to make good on their obligations. Coincidence?

[ContinentalOp]

19. You have to be kidding.

It's already paying out to the boomers who are starting to retire. If you take away the boomers SS they will riot in the streets. It will be 1968 all over again. Of course I fully expect them to dismantle it for the rest of us once they've gotten what they need out of it.

[Junkdrawer]

20. Boomers have only begun to tap SS....

It will take 10 years for the full impact of the boomers to be felt on SS. But the campaign to kill SS has begun. Expect it to escalate in the next few years.

[Iggo]

26. Um...

...once they've gotten what they need out of it?

Won't that mean they're dead?

[GodlessBiker]

11. Damn. I thought you were going to say, "Eat the rich." Removing the cap is good.

[Orsino]

12. Heck. RAISE the cap.

We could let the upper-incomers keep some of their money out of the taxation pool and still cure the solvency "crisis." We wouldn't even have to tax income above the cap at the same rate.

These are all compromises that would allow the privileged set to retain their status.

[galloglas]

14. My vote for "Confiscate Plutocrat's Assets !!"

n/t

[noiretextatique]

15. the cap makes no sense

i am taxed at 100% of my earnings, but a person who makes more than me gets a break?!? it never made any sense.

[Egalitariat]

22. Right now, everybody has a shot to get back what they pay in

If you raise the cap, that won't be true anymore unless you raise the benefits as well. And if you raise the benefits, you will have done nothing to strengthen Social Security.

[Jim Lane]

28. Your guess is common sense but turns out to be inaccurate

Social Security benefits don't increase in direct linear fashion with the payments the worker made before retiring. If the cap is eliminated, and if benefits are calculated according to the current formula, then rich retirees will indeed get huge benefit checks. The net result, however, will be a substantial boost to Social Security finances.

A 2001 Social Security advisory board report stated:

Making all earnings covered by Social Security subject to the payroll tax beginning in 2002, but retaining the current law limit for benefit computations (in effect removing the link between earnings and benefits at higher earnings levels), would eliminate the deficit. If benefits were to be paid on the additional earnings, 88 percent of the deficit would be eliminated. (from , page 23)

If the cap is eliminated, the choice about how to calculate benefits isn't an easy one. Allowing no benefits based on the additional payments by the worker would save the most money but would move Social Security strongly in the direction of a means-tested welfare program. Allowing the benefits would mean that some CEO's and other workers who were grossly overpaid would receive, each month, a Social Security check that exceeded current workers' average annual income. From the point of view of solvency, however, the point of the board's calculation is that collecting more in taxes and paying more in benefits is not a wash or anything close to it.

[Egalitariat]

30. Very interesting. Thanks for bringing that to my attention****

nm

[grasswire]

16. I can solve it in TWO words: means test

Who can solve it in one word?

[TahitiNut]

18. Bad idea.

Insurance premiums reflect the income insured. It's FAR better to increase the payroll wages of the bottom 90%. The SOLE 'issue' with Social Security solvency arises due to the decimated payroll wages of the bottom 90% ... wages that have actually DECLINED in real terms over the last 25 years. Increase the minimum wage. Make the income tax more progressive.

(See my journal for posts on this topic.)

[indepat]

21. Social security benefits are three-tiered (90%, 33%, and 15%) and those whose contributions

are at the higher end of the cap are already getting royally screwed (soaked) on contributions at the upper-end of the cap because future benefits will never be commensurate with the payroll taxes paid: so in no way is a corrupt, venal, corpulent, and self-serving Congress ever going the soak the mega incomes with a fourth-tier 'cause this burden is to be solely borne by incomes in ranges below the cap ((although excess contributions (payroll taxes) are always being currently spent on other governmental programs rather than being kept in a secure lock-box strictly for the purpose of paying future promised benefits.)) See, that was not so hard. :P

[sellitman]

23. Bush wouldn't remove the Cap either.

[Mariana]

25. I agree. And we need to stop pretending that SS is something it's not.

SS is not a retirement plan or an insurance policy. It's funded by a TAX, not by "contributions" or "premiums". There is no "contract" and no one has a right to receive benefits, no matter how long they've paid the tax.

The Supreme Court so ruled in 1960. You can read about it on the SSA's own website:

http://www.ssa.gov/history/nestor.html

SS is an income redistribution program. That is all it is. It collects money from people who earned it and gives that money to people who didn't earn it. In fact, it collects more than it needs, and the government uses the excess as general revenue!

We should eliminate the cap. There's no reason the poor and middle class should be shouldering this burden by paying a higher percentage of their incomes in SS tax than people with high incomes do.

Edited to correct an error.

[avaistheone1]

27. Thumbs up. Remove the cap.

:thumbsup:

[kaygore]

29. I agree & I did when I used to cap out within a fews months every year

Meanwhile, the guy in the mailroom with three kids and a wife never capped out!