I'm not opposed to this in principle, but wealthy people run the country and hate taxes, so it's not going to happen. I'd settle for raising the cap (to cover 90% of wages again) and then a gradual increase in payroll taxes if and when necessary. I'm opposed to any cuts.
There is no crisis in Social Security. Even with no changes whatsoever, Social Security will be able to pay out more in real (inflation-adjusted) dollars than it does now, forever. So why should we make cuts now to avoid possible cuts in the future to people who will be getting more?
While this doesn't seem like a bad idea, the fact that those that are making over the amount capped at this time are also facing increased taxes from Obamacare and other Obama schemes to re-distribute the wealth. I would prefer paying more into Social Security (FICA) than into the Geenral Fund, but I really don't want to continue paying more than my fair share..
Mike B: Do you understand that the assets in the SS trust fund are also liabilities to the Treasury? Adding up these numbers is a wash, zero. So how do we continue to pay inflated adjusted dollars from the trust fund, which amounts to zero, on a cash basis? Do you suggest we pay inflated adjusted dollars on a non-cash basis? Don Levit
My family makes well in excess of the FICA tax limit. If you are proposing taxing my full income for FICA purposes, I hope you are also willing to provide me benefits that are proportional to that increase. In other words, when I go to collect, I better get retirement benefits that are MUCH higher than the current limit.
As noted above, to do otherwise would basically just be a redistribution of wealth on a massive scale. Taxing me an additional $15,000 per year without any additional benefit to me...I don't think so.
In 1983, Reagan used FICA overages to dramatically lower the then higest tax bracket of 70% down to 28%. Those reductions continued in large part. It's time for the rich to pay us back and accept a lifting of the FICA tax ceiling. And yes, payouts would have to be raised somewhat as well.
Resistance on raising taxes on the rich isn't the only reason this is unlikely to happen. A raise of the ceiling would be a step toward actually strengthening the system in its current form. Many in Washington would rather dismantle it, piece by peice. That way, they never have to repay the trust fund- the over $2.5T that is owed to workers and retirees.
Yes, I understand that the trust fund consists of bonds that are liabilities for the Treasury. They can be (and have been) redeemed, and the Treasury simply sells more bonds, resulting in no change to the national debt.
It isn't necessary to deplete the trust fund, however. The trust fund ratio (TFR) is supposed to be at least 100% (one year's total SS payout), and this payout increases with time. With gradual tax increases, the TFR can be made to gradually approach 100% (from over 300% now), but this will not mean that 2/3rds of the trust fund is redeemed, since the 100% is 100% of a bigger number.
I don't see why it is OK for SS to take in more than it pays out, meaning working people are overpaying, allowing tax cuts that mainly go to upper income people, but that it is a crisis when it goes the other way. I am not opposed to pay as you go (adjusting the tax level to what is needed to pay scheduled benefits), but we shouldn't start that when the TFR is at its peak (although I would prefer doing that to any benefit cuts).
The USA is a very wealthy country, and we can easily afford scheduled benefits.
Mike B: You are correct there is no change in the national debt. However, debt held by the public increases while intragovernmental debt lowers. Many economists consider debt held by the public to be more primary debt, for that is debt we owe to outside entities. Don Levit
Whether you like it or not, here's what's going to happen some day. The FICA cap will be abolished. But max benefits will be capped at no more than $3000 per month. I guarantee this.
The country is on the road to bankruptcy. Both the warfare state (who appointed the US the world's policeman?)) and the welfare state have to be dismantled if the republic is to survive. The safety net for the truly poor has to be maintained; benefits, however, have to be rigorously means tested with no middle class scams like voluntary impoverishment to qualify for Medicaid. Social insurance transfers (SS and Medicare) also have to be means tested. (No more SS disability benefits, for example, for cops getting 100k per yr pensions.)
I'm not opposed to this in principle, but wealthy people run the country and hate taxes, so it's not going to happen. I'd settle for raising the cap (to cover 90% of wages again) and then a gradual increase in payroll taxes if and when necessary. I'm opposed to any cuts.
ReplyDeleteThere is no crisis in Social Security. Even with no changes whatsoever, Social Security will be able to pay out more in real (inflation-adjusted) dollars than it does now, forever. So why should we make cuts now to avoid possible cuts in the future to people who will be getting more?
While this doesn't seem like a bad idea, the fact that those that are making over the amount capped at this time are also facing increased taxes from Obamacare and other Obama schemes to re-distribute the wealth. I would prefer paying more into Social Security (FICA) than into the Geenral Fund, but I really don't want to continue paying more than my fair share..
ReplyDeleteMike B:
ReplyDeleteDo you understand that the assets in the SS trust fund are also liabilities to the Treasury?
Adding up these numbers is a wash, zero.
So how do we continue to pay inflated adjusted dollars from the trust fund, which amounts to zero, on a cash basis?
Do you suggest we pay inflated adjusted dollars on a non-cash basis?
Don Levit
Don is one of the paid shills Charles was talking about
ReplyDeleteMy family makes well in excess of the FICA tax limit. If you are proposing taxing my full income for FICA purposes, I hope you are also willing to provide me benefits that are proportional to that increase. In other words, when I go to collect, I better get retirement benefits that are MUCH higher than the current limit.
ReplyDeleteAs noted above, to do otherwise would basically just be a redistribution of wealth on a massive scale. Taxing me an additional $15,000 per year without any additional benefit to me...I don't think so.
In 1983, Reagan used FICA overages to dramatically lower the then higest tax bracket of 70% down to 28%. Those reductions continued in large part. It's time for the rich to pay us back and accept a lifting of the FICA tax ceiling. And yes, payouts would have to be raised somewhat as well.
ReplyDeleteResistance on raising taxes on the rich isn't the only reason this is unlikely to happen. A raise of the ceiling would be a step toward actually strengthening the system in its current form. Many in Washington would rather dismantle it, piece by peice.
That way, they never have to repay the trust fund- the over $2.5T that is owed to workers and retirees.
Don Levit-
ReplyDeleteYes, I understand that the trust fund consists of bonds that are liabilities for the Treasury. They can be (and have been) redeemed, and the Treasury simply sells more bonds, resulting in no change to the national debt.
It isn't necessary to deplete the trust fund, however. The trust fund ratio (TFR) is supposed to be at least 100% (one year's total SS payout), and this payout increases with time. With gradual tax increases, the TFR can be made to gradually approach 100% (from over 300% now), but this will not mean that 2/3rds of the trust fund is redeemed, since the 100% is 100% of a bigger number.
I don't see why it is OK for SS to take in more than it pays out, meaning working people are overpaying, allowing tax cuts that mainly go to upper income people, but that it is a crisis when it goes the other way. I am not opposed to pay as you go (adjusting the tax level to what is needed to pay scheduled benefits), but we shouldn't start that when the TFR is at its peak (although I would prefer doing that to any benefit cuts).
The USA is a very wealthy country, and we can easily afford scheduled benefits.
Income taxes, debt, and money printing are already being used to fund Social Security because there is no trust fund.
ReplyDeleteI'm not sure what this argument is about.
Mike B:
ReplyDeleteYou are correct there is no change in the national debt.
However, debt held by the public increases while intragovernmental debt lowers.
Many economists consider debt held by the public to be more primary debt, for that is debt we owe to outside entities.
Don Levit
Whether you like it or not, here's what's going to happen some day. The FICA cap will be abolished. But max benefits will be capped at no more than $3000 per month. I guarantee this.
ReplyDeleteAh yes, the ease of which to guarantee one's opinion when protected by anonymity..
ReplyDeleteObama was not born in Hawaii, I guarantee this...
The country is on the road to bankruptcy. Both the warfare state (who appointed the US the world's policeman?)) and the welfare state have to be dismantled if the republic is to survive. The safety net for the truly poor has to be maintained; benefits, however, have to be rigorously means tested with no middle class scams like voluntary impoverishment to qualify for Medicaid. Social insurance transfers (SS and Medicare) also have to be means tested. (No more SS disability benefits, for example, for cops getting 100k per yr pensions.)
ReplyDelete