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Tue Jan 8, 2013, 03:14 PM

A Simple Solution to Permanent Social Security Solvency

The cap is currently at $110,00. That means that once somebody reaches that level of income, they stop making contributions to the system.

Raise the cap to whatever it will take to make Social Security's projected solvency guaranteed for 25 years into the future. Have automatic increases in the cap any time the projection goes below 25 years.

This would always guarantee the Social Security system will be solvent from generation to generation.

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Arrow 43 replies Author Time Post
Reply A Simple Solution to Permanent Social Security Solvency (Original post)
louis c Jan 2013 OP
Tumbulu Jan 2013 #1
global1 Jan 2013 #2
My Good Babushka Jan 2013 #3
Auntie Bush Jan 2013 #4
madrchsod Jan 2013 #5
LiberalFighter Jan 2013 #14
reteachinwi Jan 2013 #30
leftstreet Jan 2013 #31
BainsBane Jan 2013 #6
Vincardog Jan 2013 #7
louis c Jan 2013 #8
LiberalFighter Jan 2013 #17
AtheistCrusader Jan 2013 #9
Indydem Jan 2013 #10
pangaia Jan 2013 #16
louis c Jan 2013 #24
Indydem Jan 2013 #25
exboyfil Jan 2013 #28
louis c Jan 2013 #39
FogerRox Jan 2013 #43
Vincardog Jan 2013 #33
Sirveri Jan 2013 #35
Gman Jan 2013 #11
Sirveri Jan 2013 #36
Gman Jan 2013 #38
golfguru Jan 2013 #12
SalviaBlue Jan 2013 #13
HiPointDem Jan 2013 #15
SalviaBlue Jan 2013 #19
madrchsod Jan 2013 #18
golfguru Jan 2013 #20
magellan Jan 2013 #21
Selatius Jan 2013 #23
Sirveri Jan 2013 #37
golfguru Jan 2013 #40
Oilwellian Jan 2013 #41
golfguru Jan 2013 #42
exboyfil Jan 2013 #29
Vincardog Jan 2013 #34
PoliticalPizza Jan 2013 #22
liberal N proud Jan 2013 #26
MrYikes Jan 2013 #27
duffyduff Jan 2013 #32

Response to louis c (Original post)

Tue Jan 8, 2013, 03:20 PM

1. Yes, many of us have been saying this for years...

this is one of those no brainers....so I cannot figure out who is against it- except the obvious obstructionists!

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Response to louis c (Original post)

Tue Jan 8, 2013, 03:25 PM

2. I've Posted This Thread Each Time A Discussion Comes Up Here On DU About "Raising The Cap"....


Check out this link: http://www.democraticunderground.com/?com=view_post&forum=1002&pid=2117173

I think the American People could get behind a campaign to "Raise The Cap".

Check out the following link: http://election.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1818709

I still think a tv commercial - or a 'you tube' clip that can go viral - with pics of all sorts of people 'raising or lifting' their caps - would be a very poignant way of the American People voicing their support for 'raising or lifting the cap' to solidify "Social Security".

I think such a campaign is worth a try versus having the other side attacking SS and weakening it in any way. The idea is to have both typical American People photographed lifting, tipping or raising their caps:

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Response to louis c (Original post)

Tue Jan 8, 2013, 03:28 PM

3. Absolutely!

I've often been told that $250,000 - $400,000 is middle class, so I think they should kick in, too.

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Response to louis c (Original post)

Tue Jan 8, 2013, 03:31 PM

4. Thanks for posting that perfectly sensible solution

which I too have been wondering why we don't just do this simple solution. I bet though that the righties in the congress wouldn't vote for that. We have GOT to get RID of those FOOLS if we want any progress or want to help the middle and lower class.

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Response to louis c (Original post)

Tue Jan 8, 2013, 03:58 PM

5. put more people to work

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Response to madrchsod (Reply #5)

Tue Jan 8, 2013, 06:17 PM

14. Require all companies that have employees outside the USA to pay

their portion of the Social Security and Medicare taxes. Base it on the average of employees hourly rate x 2080 hours x number of employees working outside the USA not paying payroll taxes.

So maybe $1600 to $2400 per employee not working in the USA that provides labor for a product or service intended for USA use.

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Response to madrchsod (Reply #5)

Wed Jan 9, 2013, 11:17 AM

30. At a living wage

 

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Response to reteachinwi (Reply #30)

Wed Jan 9, 2013, 11:23 AM

31. +1

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Response to louis c (Original post)

Tue Jan 8, 2013, 04:03 PM

6. and require people who live off investment income to pay into SS

like the self employed have to.

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Response to louis c (Original post)

Tue Jan 8, 2013, 04:11 PM

7. Eliminate the cap all together, and make capital gains pay SS too. Tax all income as regular $

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Response to Vincardog (Reply #7)

Tue Jan 8, 2013, 04:32 PM

8. Do Both

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Response to Vincardog (Reply #7)

Tue Jan 8, 2013, 06:24 PM

17. I would suggest the SS & Medicare tax on capital gains and dividends

be when it is over 50% of the poverty level. When they reach 65 they would be exempt from Medicare taxes. When they start receiving SS benefits then they would be exempt from that tax.

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Response to louis c (Original post)

Tue Jan 8, 2013, 05:18 PM

9. For 25 years, you don't have to do anything at all.

But more to the point, why have a cap at all?

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Response to louis c (Original post)

Tue Jan 8, 2013, 05:35 PM

10. Sure, but only if you raise the benefit cap.

You can't raise the contribution cap and keep a benefit cap.

If you do, you have turned the most successful Democratic program in history into welfare.

But, if you raise the benefit cap, the solvency is jeopardized.

THAT is why politicians who actually know what is going on don't want to raise the cap.

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Response to Indydem (Reply #10)

Tue Jan 8, 2013, 06:19 PM

16. Right. I think I may have seen you post this

in another thread.
But, there must be a 'middle way..raise the cap, raise benefit cap BUT only so much.. so SS becomes progressive similar to the way taxes USED to be. Some formula would certainly work if the fascists can be outvoted and stopped..

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Response to Indydem (Reply #10)

Wed Jan 9, 2013, 06:26 AM

24. No, I don't want to raise the benefit cap

If it is raised, it should be at a rate far below the contribution cap in order to provide solvency.

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Response to louis c (Reply #24)

Wed Jan 9, 2013, 08:42 AM

25. That is a terrible idea

You have converted an insurance program where people pay in relative to what they receive, into a wealth transference program (welfare). That idea will lead to a loss of respect and faith in the program, and its eventual disassembly.

It may be great in your head and on paper, but in reality it's stupid and shortsighted.

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Response to Indydem (Reply #25)

Wed Jan 9, 2013, 09:17 AM

28. Hate to break it to you but higher earners (those between about $55K-$110K ) already

subsidize social security by the reduced formula for their benefit calculations. That is why I propose no increase in benefits, but a lower withholding amount for income above the current $110K or so cap. In general I would make this lower withholding amount reflect the actual subsidized amount that those earning over $55K pay. I agree strongly that you can't opt out of your obligations to support lower earners when you reach a magic $110K threshhold. Any media campaign to remove the cap should explain how the benefits are actually calculated.


http://www.ssa.gov/pubs/10070.html#a0=0

Three levels of benefit calculation

90% - $ 0 to $9,204/yr.
32% - $9,204/yr. to $55,512/yr.
15% - $55,512/yr. to $110,100/yr.

Formula approximately adjusts for inflation. Another subsidization comes in with the tax on Social Security benefits for those earning income in retirement. In general that tax will fall disproportiately on those making over $55K during their working career.

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Response to Indydem (Reply #25)

Thu Jan 10, 2013, 07:07 AM

39. If it is a redistribution of wealth, then it is a good idea

Maybe the "haves" should contribute a little more to the "have nots", especially when they're all working their whole lives.

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Response to louis c (Reply #24)

Thu Jan 31, 2013, 04:43 PM

43. There is no benefit cap

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Response to Indydem (Reply #10)

Wed Jan 9, 2013, 08:37 PM

33. Ok as long as the benefit is the same for everyone. Same $ amount for every recipient

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Response to Indydem (Reply #10)

Wed Jan 9, 2013, 09:05 PM

35. The benefit payout structure is already tiered.

Above a certain point you only get 10% back on your payments. Under about 9k you get 90% of the money you pay into the system. There is a third tier, but I think it's at 35% and I don't remember the end points.

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Response to louis c (Original post)

Tue Jan 8, 2013, 05:45 PM

11. Take it up to $400K

solve the problem for decades.

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Response to Gman (Reply #11)

Wed Jan 9, 2013, 09:06 PM

36. Then tie tax rate and tier growth to top quintile income growth.

Then it is solved basically forever.

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Response to Sirveri (Reply #36)

Wed Jan 9, 2013, 11:20 PM

38. Perfect

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Response to louis c (Original post)

Tue Jan 8, 2013, 06:02 PM

12. Would you then increase monthly SS checks commensurately?

The way I understand it, social security is neither welfare nor tax. Workers contribute and then receive commensurate benefits.

So if a person is contributing 4 times than current threshold, how much higher her monthly retirement checks should be compared to some other person who contributed the current maximum?

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Response to golfguru (Reply #12)

Tue Jan 8, 2013, 06:06 PM

13. So, my mother in law who never worked

should not get SS?

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Response to SalviaBlue (Reply #13)

Tue Jan 8, 2013, 06:18 PM

15. if your mil gets SS, it's because her husband *did* work.

 

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Response to HiPointDem (Reply #15)

Tue Jan 8, 2013, 10:31 PM

19. I know.

If you use the logic of the post I responded to, then it would follow that my MIL would get 0.



"The way I understand it, social security is neither welfare nor tax. Workers contribute and then receive commensurate benefits.

So if a person is contributing 4 times than current threshold, how much higher her monthly retirement checks should be compared to some other person who contributed the current maximum?"

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Response to SalviaBlue (Reply #13)

Tue Jan 8, 2013, 07:09 PM

18. both my grandmothers never worked and they received ss and medicare

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Response to SalviaBlue (Reply #13)

Wed Jan 9, 2013, 02:57 AM

20. Your mother-in-law is probably in the same boat as my mother

My mother never had a job in US either, and she received Supplemental Social Security. However
if your father contributed then your mother deserves benefits as a widow.

But that was not my point. I was asking what should be done with those who contribute 4 times the current maximum. Should they earn their benefit check commensurate with their contribution or should we just confiscate their excess contributions?

Again to emphasize, my point is not about MINIMUM benefits, my question pertains to maximum benefits for those who would contribute above current maximum.

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Response to golfguru (Reply #20)

Wed Jan 9, 2013, 03:18 AM

21. Why shouldn't it be calculated the same way it is for everyone else?

The more you put in, the more you get out. It's always been this way afaik, and I'm sure the same discussions occurred in the past when the cap was raised a lot in one go.

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Response to magellan (Reply #21)

Wed Jan 9, 2013, 05:45 AM

23. Because FDR didn't want SS cutting $10,000 checks every month to millionaires in retirement.

The spectacle of Social Security coddling the wealthy in retirement likely would've provoked a negative reaction to the program altogether, especially in the years of the Great Depression. Thus, a benefits cap and a contributions cap were born. The program was built as a level of security against the ravages of old age and disability. Anything beyond that would be unnecessary.

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Response to Selatius (Reply #23)

Wed Jan 9, 2013, 09:11 PM

37. The program payouts are progressively tiered, you only get 10% back above a certain point.

If we didn't touch the tiers, but just upped the cap by 300k you'd see folks getting checks for 30k a year from SS. This is why if we raise the cap we need to do it slowly and look into making more than three tiers, possibly even a 5% or a 1% tier above 250k.

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Response to Selatius (Reply #23)

Sat Jan 12, 2013, 07:53 PM

40. SS benefit checks are already progressive, but not quite flat

I contributed twice per year compared to my mother-in-law, but my benefit checks are only 40% larger than hers.

I think if someone contributed 4 times the current maximum, their benefit checks should be in the same proportion as mine compared to my mother-in-law. So may be two times the current maximum if they contribute 4 times the current maximum. Otherwise the SS program becomes a welfare program paid by the rich for the not-so-rich. SS should not become a welfare program.

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Response to golfguru (Reply #40)

Sat Jan 12, 2013, 09:19 PM

41. I doubt it seriously

Are you really trying to convince us that a large majority of Americans would pity the rich paying a slightly larger percentage of their income toward SS? The large majority pay SS on 100% of their income. Goldman Sachs CEO, Lloyd Blankfein, paid off his obligation to SS last year after receiving his first paycheck. So let's say he has to pay SS taxes out of his first 3 paychecks each year. Do you really think the large majority of American people would start viewing SS as a welfare program if we do that? What do you think we are? Idiots?

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Response to Oilwellian (Reply #41)

Sun Jan 13, 2013, 03:28 AM

42. Pity is your word, not mine

As opposed to you, I am not jealous of the rich. Fairness is my word. As I said, SS benefit checks are already progressive. No need to go the welfare route and confiscate money from those who contributed their fair share. If Blankfein dude contributed then he deserves return on his contributions.

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Response to golfguru (Reply #12)

Wed Jan 9, 2013, 09:21 AM

29. Not exactly

See my other post. The contributions for higher earners use a multiple that is 6 times less than lower earners to calculate benefits. Also many of those higher earners will see further reductions in S.S. benefits because of the tax on benefits.

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Response to golfguru (Reply #12)

Wed Jan 9, 2013, 08:41 PM

34. the benefit is the same for everyone. Same $ amount for every recipient. The rich don't need

more. That is what got us into the problem.

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Response to louis c (Original post)

Wed Jan 9, 2013, 03:38 AM

22. Yes, but...

Great idea, but they'd rather always take from the real middle class!

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Response to louis c (Original post)

Wed Jan 9, 2013, 08:55 AM

26. If I made $200K, I would not mind paying SS on all $200

I also doubt that I would worry at that point if I ever drew SS.

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Response to louis c (Original post)

Wed Jan 9, 2013, 08:57 AM

27. If I remember correctly

ss monthly benefit maximum is either $2300 or $2600.

We need to eliminate the cap. Further, in every regard, we need to attack the income disparity. We must always keep that in our focus.

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Response to louis c (Original post)

Wed Jan 9, 2013, 11:48 AM

32. It's not "insolvent" and can never be "insolvent"

It's a federal program, and therefore it can never go "broke."

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