General Discussion
In reply to the discussion: Why won't the GOP just come right out and say they want to cut SS, Medicare Medicaid? [View all]I was just going to post, eliminate the cap, except on small business and cut the rate to 2.45%.
The cap makes SS regressive.
You could remove the cap, cut the rate, help the 92% of americans that earn under the limit, and still get A LOT more revenue into the system.
Keep the cap at 7k on the employer side, mostly because small - midsized business would be hurt by extending the rate into perpetuity.
The limit is 33k per person.
So in my example above he will miss out on 1 month (12*3 = 36), but his wife will still get 18K.
As for it being taxable, only half of it is. (Remember - 1/2 of it was already taxed. FICA is after tax money)
In my example above, at roughly 20% effective tax rate, they would give back 5100.
But you know what? I still think lowering the rate and limiting the cap is the way to go.
Basically I am saying fund it the same way as medicare.
(Don't know if 2.45% is the right number, btw - I picked it because it is the medicare rate, which is 100% taxable, and is about at the same level of revenue as SS)