Feb 17, 2017

Income Inequality Takes Toll On Trust Funds

     Rachel West and Rebecca Vallas of the Center for American Progress write about the serious effects of income inequality on the Social Security trust funds. Because of the $127,200 cap on wages covered by the FICA tax, rising income inequality a greater and greater portion of income is escaping FICA. It's not like those with incomes over $127,200 a year are struggling. That's the group receiving the vast majority of income gains. If, instead of a flat cap, the FICA cap had been set since 1983 so that 90% of wages are covered, the Social Security trust funds would be $1.3 trillion higher now.

8 comments:

Anonymous said...

Think that's fun, wait until the rich people decide not to purchase Medicare due the continuing rising premiums for those with an income over 100,000.00 2 years prior to retirement. Maybe the one percent are getting sick and tired of supporting the 47%?? Get rid of this crap. I paid into Medicare for 50 years and now they want me to pay exorbitant premiums for something I have already subsidized for 50 years. BS...

Anonymous said...

12:57 you do understand that your "exorbitant premium" is (if you do not have an IRMA and if you don't know what IRMA is you don't have one) is about 25% of the total premium cost and that the government is paying the other 75% of the premium. You are on socialist government subsidized single payer insurance.

Anonymous said...

@12:57

I am reasonably certain that raising the cap will result in greater revenue, then any reduction due to the one percent choosing not to purchase supplemental medicare coverage. Unless you were implying you suggest the one percent not "purchase" medicare coverage (i.e. not pay social security taxes). That would also fail to prevent the one percent from paying their fair share as they would be charged with tax evasion.

Anonymous said...

Most regular citizens that aren't making in excess of 70k per year in retirement can get out of IRMAA as it is with a (life changing event). It's not outrageous and if you want to get out, no problem. Just remember, that when you need health insurance when you are diagnosed with stage 4 cancer that you'll only be able to enroll in the general enrollment period.

Anonymous said...

@ 12:57 - the Medicare taxes you paid while employed cover Part A which you now have for free, all "insured" individuals receive part A for free. People who did not pay Medicare taxes pay in excess of $450.00 for part A per month.

What you are paying for is Part B, everyone pays premiums for Part B. And as a previous post indicates, you are paying 25% of the cost of part B, not the entire cost. By the way, IRMAA was passed while George W. Bush was president - prior to that everyone paid the same for part B regardless of income so you can thank your conservative friends for the higher premiums

Anonymous said...

Even at the maximum IRMA at 4 times the standard Part B premium, for most people the cost is still a good deal for the coverage it provides. However this could change with a proliferation of boutique medicine that does not take Medicare. As for the Trust Fund projections shown in the study, this is something that has been known for quite some time. Nothing new except the dollar figure placed on it.

Anonymous said...

Do you know what else has taken a toll on SS Trust Funds? The US Government "borrowed" 2.7 Trillion Dollars, and so when can we expect to get that money back? It would certainly solve a lot of issues pertaining to inevitable cuts in the small payouts that people are getting.

Anonymous said...

Forcing disabled Injured Workers onto SSA & Medicare after 2 years of temporary disability didn't help either. Employers Insurers tell the SSA that they will give IW's benefits and then the IW's SSDI benefits are offset from the insurers said amount but the employers pay out on Workers compensation never happens and the SSA does nothing baout this eventhough they are told about it. it's outright fraud to keep the iabled workr form their SSA full benefits just as it is fraud to not pay out their workers compensation benefits that they lied about to the SSA..

Then too, many the IW will get SSI or dead spousal benefits not SSDI that they qualify for AND STILL HAVE TO PAY FOR MEDICARE out of their off set(s) of SSA benefits. There are more than several type of offsets that the SSA uses to lessen the disabled workers benefits, WC judges also are employeed by those who employ SSA judges. WC judges job is get the disabled worker onto the SSA& Medicare programs rather than enforcing the employer to pay all that the employer owes for the totally disabled injured worker. How many disabled injured workers are there? Quite a few and they are American workers who have been denied employment, training, medical care & enough money to live on for them and their families.

In this instance the employers will pay a little higher price in workers comp for the SSI but the employer's share of FICA does not go to the disabled worker.. So where exactly does that money go?

It is quite the racket put on the work injured disabled American who paid and are still paying into Medicare & the current working American worker paying to aide in subsidizing what the employer does not pay.
I would like to know how much money of the SSA money, the employers FICA money go to foreigners who come here who have never worked.