It really should happen. Money that used to go toward pension plans just goes to outrageous executive compensation. With most Americans completely dependent on Social Security in retirement
There is no push back on the Medicare tax, which has no income limit. It is 1/10 the Social Security tax so maybe it is not a good example, but we should raise the cap or eliminate it.
Well, Musk really makes these numbers meaningless in the aggregate but overall the point is valid. If all earnings over $250,000 were subject to tax at the same rate, really if the cap was eliminated entirely, roughly two thirds of the suppose shortfall disappears.
I just wonder if those companies, out of an abundance of good will, will just quietly accept paying the employer side and take the hit on quarterly profits, or will they just pass the cost down to the consumer.
Raising/eliminating the FICA tax max would not in and of itself subject these CEOs' earnings to Social Security taxes. These super-earners often receive stocks and stock options as their primary source of compensation, which I don't think count as "wages" regardless of the cap. If you want the super rich to pay their "fair share," you'd also want to expand the types of compensation that are subject to FICA.
@10:02: No, that’s not a very real thing. It’s a myth pushed by the super-rich and their GOP allies. In reality, the prices consumers pay are largely a function of supply and demand. The effects of taxes on producers generally have negligible impacts on the prices consumers pay, absent a monopoly situation or other market failure resulting in a lack of competition or substitute goods.
SSA should coordinate with IRS and assess FICA on all non-wage earnings for everyone and the adjust benefit amounts accordingly so that the greedy top 5% don't scream it is a welfare program, which it is not.
Basic theory of capitalism is that prices are set based on willingness to pay, not costs. If companies think they could charge more, they would. It is possible an increase in costs can increase to the extent certain products/services are no longer profitable and therefore they are cut, but no unless passing on costs to the consumer is not a thing. Although often companies will argue they have to increase prices due to costs, and naive consumers accept that. I'll put it this way, if a product you like goes up in price, are you more likely to switch to some other product? No? Okay, then the company would have raised those prices regardless. Yes? Okay, then the company won't. As someone who previously worked in retail, this actually is most of what department managers do. "sales" when a price increase was not tolerated, and slow unadvertised price increases when they estimate consumers will tolerate it. It's never do to some newly discovered cost.
Would taxing total compensation mean we would have to pay tax on a 401k match from employer? Or employer provided health insurance? Isnt that all considered compensation as opposed to wages, which are two totally different things.
It's counterintuitive to say increased costs never result in rising prices. There may be other factors but the cost of the product and production of the product certainly have quite a bit to do with the final cost. The goal is to make a profit.
10 comments:
It really should happen. Money that used to go toward pension plans just goes to outrageous executive compensation. With most Americans completely dependent on Social Security in retirement
There is no push back on the Medicare tax, which has no income limit. It is 1/10 the Social Security tax so maybe it is not a good example, but we should raise the cap or eliminate it.
Well, Musk really makes these numbers meaningless in the aggregate but overall the point is valid. If all earnings over $250,000 were subject to tax at the same rate, really if the cap was eliminated entirely, roughly two thirds of the suppose shortfall disappears.
I just wonder if those companies, out of an abundance of good will, will just quietly accept paying the employer side and take the hit on quarterly profits, or will they just pass the cost down to the consumer.
That is a very real thing. Not popular, but real.
Raising/eliminating the FICA tax max would not in and of itself subject these CEOs' earnings to Social Security taxes. These super-earners often receive stocks and stock options as their primary source of compensation, which I don't think count as "wages" regardless of the cap. If you want the super rich to pay their "fair share," you'd also want to expand the types of compensation that are subject to FICA.
@10:02: No, that’s not a very real thing. It’s a myth pushed by the super-rich and their GOP allies. In reality, the prices consumers pay are largely a function of supply and demand. The effects of taxes on producers generally have negligible impacts on the prices consumers pay, absent a monopoly situation or other market failure resulting in a lack of competition or substitute goods.
SSA should coordinate with IRS and assess FICA on all non-wage earnings for everyone and the adjust benefit amounts accordingly so that the greedy top 5% don't scream it is a welfare program, which it is not.
@10:02
Basic theory of capitalism is that prices are set based on willingness to pay, not costs. If companies think they could charge more, they would. It is possible an increase in costs can increase to the extent certain products/services are no longer profitable and therefore they are cut, but no unless passing on costs to the consumer is not a thing. Although often companies will argue they have to increase prices due to costs, and naive consumers accept that. I'll put it this way, if a product you like goes up in price, are you more likely to switch to some other product? No? Okay, then the company would have raised those prices regardless. Yes? Okay, then the company won't. As someone who previously worked in retail, this actually is most of what department managers do. "sales" when a price increase was not tolerated, and slow unadvertised price increases when they estimate consumers will tolerate it. It's never do to some newly discovered cost.
Would taxing total compensation mean we would have to pay tax on a 401k match from employer? Or employer provided health insurance? Isnt that all considered compensation as opposed to wages, which are two totally different things.
It's counterintuitive to say increased costs never result in rising prices. There may be other factors but the cost of the product and production of the product certainly have quite a bit to do with the final cost. The goal is to make a profit.
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