The pay of employees who receive more than the Social Security wage base -- now $106,800 -- increased by 78%, or nearly $1 trillion, over the past decade, exceeding the 61% increase for other workers, according to the analysis. In the five years ending in 2007, earnings for American workers rose 24%, half the 48% gain for the top-paid. The result: The top-paid represent 33% of the total, up from 28% in 2002.
The growing portion of pay that exceeds the maximum amount subject to payroll taxes has contributed to the weakening of the Social Security trust fund. In May, the government said the Social Security fund would be exhausted in 2037, four years earlier than was predicted in 2008.
The data suggest that the payroll tax ceiling hasn't kept up with the growth in executive pay. ...
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.
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Sep 10, 2009
Isn't The Solution Obvious?
From the Wall Street Journal:
It's obvious. Either increase taxes on the rich,and or comfortable. Or this country and it's program may never recover.
ReplyDeleteThis just seems fair to me and I've advocated it for a long time.
ReplyDeleteBut is SS really supposed to be wealth transfer transfer program? Silly me, I thought it was an insurance program. Yes, it has redistributive qualities, but how far down that line should it go?
ReplyDeleteSS from it's beginning was designed to transfer wealth. Primarily from the working population to the retired population but also from the higher income folks to the lower income folks. That is why it is called a SOCIAL insurance program - it helps society as a whole by reducing poverty among the aged and disabled. While poverty among seniors is lower than it was say 35 years ago, over half of our seniors would fall below the poverty line without social security. The gap between the richest and the poorest Americans is growing. Now more than ever we need a way to move at least some wealth back toward the lower and middle classes.
ReplyDelete