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Obama says the fix for SocSec is "easy--" just eliminate the cap

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Jackpine Radical Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:20 AM
Original message
Obama says the fix for SocSec is "easy--" just eliminate the cap
on contributions.

On the face of it, this is a reasonable suggestion because SS is a regressive tax as it now stands. Lower-income people pay a higher percentage of their earnings into SS than do high-income people.

Another frequently touted solution is to means-test SS & only pay out to people with low incomes.

There is a very serious problem with the second solution, and something of a problem with the first one. The problem with the second idea, that of means-testing the payments, is that it converts SS into another anti-poverty program, and disinvests a lot of people from it. As long as everyone understands that they will benefit from Social Security, and the moreso as the amount they pay in increases, then the program is more likely to retain universal popularity. The minute it becomes a "welfare" proposal, people will become angry that their hard-earned dollars are going to support some "undeserving" elderly poor person, and many would happily go along with a plan to kill off or privatize the entire program. Republicans have many times in the past advocated means-testing SS for this very reason--they know it would be the first step in killing SS altogether.

The first idea, that of eliminating the cap, is a bit trickier. It does not immediately carry the same risks as means-testing the payments, but it too presents the problem of building resentments among the very rich, who will see themselves being taxed to support others less fortunate than they. Probably the best remedy would simply be to allow SS payments to grow in step with the amount paid in; that is, in order to make the idea of removing taxation caps more palatable, it might be wise to also adjust the payout caps. There need not be a strictly proportional ratio between paying in and eventually collecting, but I already live with the fact that a person who makes $100,00 annually will have a larger SS check than someone who makes $25,000, and I can also live with the idea that someone who makes a million a year will collect a little more than the person who makes $100,000. Frankly, I think that the wealthy person's realization that he's going to get a little more SS than the poorer person will help to keep him a little more bought in to the system.

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Gold Metal Flake Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:22 AM
Response to Original message
1. Could you link to Obama's statement?
I have not yet read of his advocating simply removing the cap.
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Jackpine Radical Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:26 AM
Response to Reply #1
2. I picked it up on another thread around here somewhere.
I don't think it's any sort of formal policy, just a sort of "Obama said..." type reference.
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Gold Metal Flake Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:28 AM
Response to Reply #2
3. Well, then, it's BS.
I have never heard him advocating removing the cap. It's the simplest way to eliminate any solvency issues with SS, and might allow us to go back to repeal the doubling of witholding instituted by Reagan.

I was hopeful there for a minute...
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originalpckelly Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:37 AM
Response to Reply #3
4. I think he did say something about it.
I just don't know where/when it was either. It's a really simple solution, and it would be popular because the poor/middle class pay more of it than the rich.
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NYC_SKP Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:37 AM
Response to Reply #3
5. You're kidding, right? Please say you're just kidding.
On more than one occasion Obama expressed his solution, during the debates for example.

Link: http://www.ontheissues.org/Archive/2008_Dems_Philly_Soc...


Barack Obama: Raise $97K cap on payroll tax exempting earnings under $250K
CLINTON: I'm certainly against one of Senator Obama's ideas, which is to lift the cap on the payroll tax, because that would impose additional taxes on people who are educators, police officers, firefighters and the like.

OBAMA: What I have proposed is that we raise the cap on the payroll tax, because right now millionaires and billionaires don't have to pay beyond $97,000 a year. Now most firefighters & teachers, they're not making over $100,000 a year. In fact, only 6% of the population does. And I've also said that I'd be willing to look at exempting people who are making slightly above that.

Q: But that's a tax on people under $250,000.

OBAMA: That's why I would look at potentially exempting those who are in between. This is an option that I would strongly consider, because the alternatives, like raising the retirement age, or cutting benefits, or raising the payroll tax on everybody, including people making less than $97,000 a year--those are not good policy options
Source: 2008 Philadelphia primary debate, on eve of PA primary Apr 16, 2008

:patriot:
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Gold Metal Flake Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:00 AM
Response to Reply #5
9. I'll ignore the snark in your thread title...
...and just point out that the "doughnut hole" solution is not mentioned in the OP. If Obama had recently advocating removing the cap without the doughnut hole then that would be some real news. If the plan is the same one advocated in the debates, then that is no news at all.
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 12:33 PM
Response to Reply #5
16. the cap for 2009 is $106,000. it was 102K in 08, 97K in '07. it goes up automatically with wages.
Edited on Wed Jan-21-09 01:08 PM by Hannah Bell
& inflation, to cover about 90% of the wage base.

http://www.ssa.gov/pressoffice/pr/2009cola-pr.htm
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NYC_SKP Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:41 AM
Response to Original message
6. Raising the cap is an excellent solution, and easy to implement.
And not so terribly unfair to the folks who would be paying more.

What's funny is that Hillary claimed that raising the cap for those above 97K income would be hitting the "middle class".

WTF---Her middle class maybe, but not America's.

Means-testing, on the other hand, would be pretty difficult to implement, though I'm not opposed to stricter oversight.

:patriot:
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MajorChode Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:31 AM
Response to Reply #6
14. Hillary was right
Those who make around the $100K mark are middle class. They may be upper middle class, but consider those who live in San Diego or NYC who make around that much definitely do not consider themselves "rich" especially when they are paying 1/2 a million for an old house that is quite small and other costs of living are considerably higher such as state and local income taxes.

Raising the cap hits blue states harder than red states. That is a fact. That's why the cap shouldn't just be raised. It should be eliminated along with other loopholes the rich enjoy. Then the benefits could be raised for those who truly need them and the withholding could be lowered for the lower and middle classes.
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Fireweed247 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 02:36 PM
Response to Reply #6
21. She thinks teachers make $100,000
:rofl: :rofl: :rofl:


Is it really this easy? I'm starting to agree with the thread about how it just might be easier than we think for Obama to fix our problems. All it takes is a guy with intelligence who doesn't work for the uber rich?!! :applause:
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Belial Donating Member (503 posts) Send PM | Profile | Ignore Wed Jan-21-09 08:29 PM
Response to Reply #21
37. Less people paying in..
When SS was enacted the number of people paying in to SS per people drawing was 10 to 1.. now its less than 3 to 1..
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October Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 08:38 PM
Response to Reply #21
39. Some areas pay their teachers more than pilots

$42K for a new hire and up to $95K for the top salary.


http://www1.phillyburbs.com/pb-dyn/news/111-05202008-15...

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October Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 08:33 PM
Response to Reply #6
38. People in the NYC area (part of her district) would be middle class at $100K
/nt
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slackmaster Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-22-09 06:57 PM
Response to Reply #6
52. It gets raised every year, indexed to some kind of wage index
Edited on Thu Jan-22-09 07:00 PM by slackmaster
I earned more than the cap in 2000 and 2001. It was a real shock to suddenly see my take-home pay go up near the end of the year. I didn't know about the cap until then. I did not feel like I was anywhere near being above middle class.

Boosting whatever factor they use to calculate the cap would be easy and not too painful for most people.

http://www.ssa.gov/OACT/COLA/cbb.html
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lumberjack_jeff Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:47 AM
Response to Original message
7. It IS easy. Do exactly as he promised during the primaries.
That is why I am so concerned that necessary tweak is being discussed by using words like "reform entitlement programs".

Just fix it. Solving this problem that we anticipate in 2014 would take about 10 minutes and we can get on to more pressing issues.
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DemBones DemBones Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:56 AM
Response to Reply #7
8. Obama was also quoted in an LBN thread a few days ago as saying he

would need to change the bargain made with the American people about Social Security. That scared the shit out of me. People's pension funds and portfolios have been bleeding for a year so SS retirement is more important than it was for most. Lift the damn cap, Obama!
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Gold Metal Flake Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:02 AM
Response to Reply #8
10. I think we now know precious little about Obama's Social Security plans.
Edited on Wed Jan-21-09 11:13 AM by Opposite Reaction
I think we need to start asking for a clear statement on the issue.


Edit: a K and a W.
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 08:45 PM
Response to Reply #7
41. 2017 is the most recent prediction of when tax revenues will fall short of expenses, & 2041
for depletion of the TF. See "Conclusion":

http://www.ssa.gov/OACT/TR/TR08/II_highlights.html#7646...

Some history:

"In the history of the trustees reports, an intermediate prediction that the trust
fund will be exhausted in 40 years is not unusual.

...the reports of 1942 and 1943 suggest that the trust fund would be exhausted in about
27 yearsby 1969 or 1970.

The 1954 report...41 yearsby 1995.

Reports in the late 1970s... 50 years...

...reports in the early 1980s... one year.

After the substantial amendments to Social Security in 1983, the program for several years was projected to be solvent through a 75-year horizon (2058-2061).

In all reports since 1992, the date of insolvency...has varied from 2031 (as predicted in 1995, 1996 and 1997) to 2044 (as predicted in 1993, 2003 and 2004)."
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lumberjack_jeff Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-22-09 06:58 AM
Response to Reply #41
47. Thanks for the correction. I pulled 2014 from memory.
I think that was the big crisis date which was projected during the last "reform" go-round.
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:16 AM
Response to Original message
11. Lift the cap already, or at least hike it substantially, and quit worrying
about pissing off "the rich." They're a small percentage. Let 'em bellyache a little. Or maybe find out that they don't mind it so much! Hey, what a concept!

What wasn't mentioned, of course, is that lifting the cap on employEE contributions is only one half of the equation. EmployERs also contribute. Would the cap also be lifted on employERs or only on employEEs? And what about the double tax that the self-employed pay?

Seems to me a compromise could be worked out.

1. Raise the cap to $250,000 for employEE contributions.
2. Raise the cap to $100,000 for employER contributions.
3. Cap SE tax the same way: full tax on first $100K, half tax on balance to $250,000. (Remember that SE applies to NET self-employment income, not gross; taxes on wages and salaries paid by an employer are applied to GROSS income.)



K*I*S*S*


Tansy Gold
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NYC_SKP Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:23 AM
Response to Original message
12. There's a shitstorm of medical costs for the elderly coming our way...
You know, the aging of America.

I'd be tickled if the cap is altogether removed and the funds directed toward health care for the elderly (or for us all).

As it stands, if I understand it, SS is actually a regressive tax, the more you make the less you pay as a percentage?

Let's flip it. Let the lower and middle class pay a lower rate.
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MajorChode Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:23 AM
Response to Original message
13. You can't do one without the other
If you eliminate the cap, then that means those who contribute more than the present maximum will be entitled to more benefits as well. Giving them more benefits diminishes the benefit of raising the cap in the first place. I suppose you could simply cap benefits, but guess what? You have described a "means test".

The thing about it is, SS already effectively has two "means test(s)". If you have over a certain amount of income, your SS benefits are taxed which reduces your benefit. That is one way SS is means tested. Another way is the more SS taxes you pay, the less benefit you receive for your money. That is the other way SS is means tested.

So the bottom line is SS is already means tested. Making it more so is really just a question of degree. So there really is no risk, as you say, because it's already being done. Furthermore any risk you allege assumes the rich have an undue influence over the country, which may reflect reality but is no less bullshit. The rich already get much more than a fair shake in this country. Expecting them to support the elderly who are poor to a greater degree is not asking all that much, especially when you consider that the lower and middle classes are already shouldering that burden almost exclusively right now.

Another thing that needs to be addressed with SS is that not ALL income is subject to SS. Income from investments is NOT subject to SS. Business owners figured that one out and greatly use it to their advantage. Let's say you own your own business. For your salary(wage) income, you must pay 6.2% FICA plus the employer's share of FICA which is also 6.2% for a total of 12.4% (up to the SS maximum income). At $100K that is over $12 thousand per year. But what if you incorporated your business? So now your business is a corporation. So now the "corporation" pays you $1K per month "salary" for which you pay 6.2% and the "corporation" pays 6.2% for a grand total of roughly $1,500. The "stock" you own in the "corporation" pays dividends of $88,000 of which you pay zero SS. You have now lowered your SS tax by almost $11,000 per year, and it's all perfectly legal. Doing away with this loophole would put a lot more money into the SS system and do away with an unfair advantage that many receive.


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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 01:05 PM
Response to Reply #13
18. Benefits ARE capped. The maximum benefit is $2,323/mo, $27,876/yr.
Edited on Wed Jan-21-09 01:06 PM by Hannah Bell
That's what someone who paid in the max through most of their working life gets.

http://ssa-custhelp.ssa.gov/cgi-bin/ssa.cfg/php/enduser...
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MajorChode Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 02:11 PM
Response to Reply #18
19. Benefits are only capped because FICA tax is capped
From your link:

The maximum benefit depends on the age at which a worker chooses to retire. The amount for 2009 for a person retiring at full retirement age (66) is $2,323. This is based on earnings at the maximum taxable amount for every year after age 21.

If you change the FICA tax cap, you change the benefit cap unless you change the method by which the benefit is calculated.
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 03:46 PM
Response to Reply #19
25. i understand that, & now i see the point you wanted to make.
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leeroysphitz Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:36 AM
Response to Original message
15. If the very rich would pay us a living wage along with adequate pensions we might not need S.S.
But the greedy grow richer and richer profiting from our work for the entirety of our lives, never giving us even close to our fair share. I don't care if they bitch about it. I don't care if you call it a tax.

Lift the cap, make them pay up even if we have to use the federal government to MAKE them pay at GUN POINT. It's OUR wealth. We toiled to create it. Not for them but for our own families.

The rich complain and complain about having to pay their fair share as if the money we want taxed wasn't STOLEN from the people who made them rich in the first goddamned place.

Raise the cap. Start tomorrow.
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 12:56 PM
Response to Reply #15
17. that's the real issue. wages have been essentially flat for 30 years.
the cap goes up automatically to cover 90% of wages. in 2007 it was $97K. for 2009, it's $106,000. that's not the problem.

http://www.ssa.gov/pressoffice/pr/2007cola-pr.htm


The root of all our problems - the succession of bubble economies, the current crash, the phony social security debate - is that labor is getting an increasingly smaller portion of the national income pie, despite decades of increases in productivity & gdp.




The top 1 percent of households alone(incomes over $450,000 in 2008) will get about $1.2 trillion in tax cuts over the next ten years if Bush's tax cuts are extended. Rescinding those cuts BY ITSELF would be enough to pay back the ENTIRE Social Security Trust Fund borrowings over the next 20 years.

http://www.cbpp.org/2-4-08tax.htm


Raising the SS cap arbitrarily is short-sighted, & will not solve the problem, because the "problem," as typically described in the media (there won't be enough money for SS in the future, etc.) isn't the real problem. It's a fake problem put out by those who wish to further squeeze labor.
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MajorChode Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 02:30 PM
Response to Reply #17
20. Here is why your reasoning fails
If you want to compare compensation relative to national income, the $3000 SS wage base in 1937 would be $450,734.49 today. So by this comparison, the wage base cap is far under what it should be because SS was funded at a far higher rate relative to the GDP in 1937.

The "problem" is not the solvency of SS, the problem is the fact that the middle class is shouldering too much of the burden of taking care of the elderly who are poor. The way SS is funded needs to be fundamentally changed, and this is not short-sightedness. The opposite is true.
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 04:41 PM
Response to Reply #20
27. You adjusted $3000 for inflation, which misses the point.
National income = ALL income, not just wage income.

Example:

Factory produces $100 in goods, split 80/20 between 8 workers & 1 owner.

Workers each get $10 & spends $1 supporting dependents. Owner gets $20 & puts $10 into productivity improvements.

Next year the same workers produce $150 in goods: workers get the same $10 each, owner gets $70, split is now 53/47, with the owner taking nearly 1/2.

Owner uses extra $ to bid with other owners for land, resources, services, & assets. The bidding wars from newly concentrated capital increases market prices for assets, & market concentration = higher costs for workers.

Now the $1 they spend on dependents - though it's the same fraction of their income - starts to pinch. For even though prices for some mass-produced goods are lower, prices for assets like land & monopolistic/oligopolistic services & goods are significantly higher.

The root problem is the distribution of national income & assets.

The answer is policies to reverse the trend to concentration.



If you want to make a different argument, based on inflation, you can do so, but:

1. Don't use 1937 for your base, use the year ongoing monthly benefits began: 1940.

2. Strip out all SS benefits added after 1940, e.g. SS disability, & their cost, or adjust for them.

3. Adjust for the approximately 1% extra in SS taxes assessed yearly since 1983 over & above the % needed to pay beneficiaries & maintain a legal TF reserve.

4. Adjust for the higher proportion of the population engaged in wage labor today & the lower production of home goods that provided a portion of survival needs (e.g. family farms & gardens, home-sewn clothing, common when I was young, etc.)

5. Adjust for the loss of wage income for the bottom 50% of the distribution.
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MajorChode Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 06:55 PM
Response to Reply #27
31. No, I didn't adjust $3000 for inflation
Your point was that wages are "flat" based on percentage of GDP, which may be true, but that also points out that SS is now being funded by less of the share of the pie than it ever has been. I adjusted $3000 as a function of the GDP which is exactly the argument you raised about wages as a function of GDP. So any "point" I missed was essentially yours.

And I DON'T want to make any argument based on inflation, because it would be meaningless. You can't compare the agrarian economy of 1937 with today's economy. The point was SS is still funded the exact same way it was in 1937 despite the fact that the economy has changed completely.



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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 07:54 PM
Response to Reply #31
35. If that's what you did, you still miss the boat.
Edited on Wed Jan-21-09 08:15 PM by Hannah Bell
The SS cap covers about 90% of wages. It's adjusted periodically to maintain that coverage.

Example:

Total US wages = $200. Population of workers = 10.

SS collections thus capped at $180, 90% of $200.

Nine people make $10/year. They pay 6.2% (12.4%) on all their wages = .62 cents each.

One guy makes $110/year. He pays, at the same rate, on $90 of his wages. $20 isn't subject to SS tax. So he pays $5.58, an effective rate of 5.0. Raise the cap, he pays $6.82.

The SS system gains $1.24, an 11% increase in collections.

Instead of the original $5.58 + $5.58 (11.16), there's now $12.40.

Will you now increase the payout to this guy when he retires, since he's contributing more than half of the pay-in?





Compare that picture to the effect of reducing the percentage share of labor income:


1937 GDP = 91.9 billion (1937 $)

90% of 1937 wage coverage = $3000


2007 GDP = 13.84 trillion (2007 $)

2007 90% of 2007 wage coverage = $97,000


2007 v. 1937: 90% of wages = 3250% increase

2007 v. 1937: GDP = 15,060% increase


Difference between GDP & wage percent increase: 11,810 percentage points.


In other words:

Labor income increased 33 times.
GDP increased 150 times.

The increase isn't all going to that one high paid WORKER. It's going to the ownership class.

The top rates for their INCOME taxes have been reduced from 70% to 35%, cap gains from 39% to 20%, from Carter to the present: & that's what the stink about the SS crisis is designed to obscure.

The TF borrowings can be repaid in under 20 years, simply by rescinding Bush's cuts on the top 1% of income.

Somehow, though, no one ever brings this up.

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MajorChode Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 08:43 PM
Response to Reply #35
40. The key word here is "wages"
Edited on Wed Jan-21-09 08:43 PM by MajorChode
The SS cap covers about 90% of wages. It's adjusted periodically to maintain that coverage.

Your own points spell out why SS funding needs to be changed. When SS first started, labor made up a much bigger share of the GDP. Now non-labor income has increased exponentially yet SS funding is still derived exclusively from labor. Why you think SS should still be funded exclusively by labor is anyone's guess.

Top marginal income tax rates are meaningless. When the top rate was 70%, there were so many loopholes the rich never paid anywhere near that amount in their effective rate. The top cap gains tax is now 15% because it was further reduced by Bush. What is more relevant is the bottom rate. When SS first started, those who paid SS also paid only 4% of their income to non-FICA federal taxes. Now it can be as high as 28%.

Prior to WWII, even if you paid the max into FICA your overall federal tax(FICA + income tax) was no more than 5.4%. Today if you pay the max into FICA, your top marginal tax rate is at least 28% + 6.2% FICA. Big difference. Huge difference.
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 09:26 PM
Response to Reply #40
42. Yet a bigger proportion of the population is working for wages than ever before,
isn't that funny?

See the graph under "Labor Force Participation Rate"

http://en.wikipedia.org/wiki/Labor_force


Let's recap:

1. A higher % of the US working-age population is working for wages than ever before in US history.

2. This propotionally larger share of the population receives a smaller share of national income than it did in 1937. Or in 1940, or 1950.

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MajorChode Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-22-09 06:46 PM
Response to Reply #42
51. You can't look at the demographics that way
The workforce was considerably different in the 30's, 40's, and 50's.

In 1950, only about 1/3rd of working aged women worked outside the home. Now about 70% do. So the labor pool soared. It only makes sense that wages suffered. It's simple supply and demand. That's why you have to be very careful at casually examining such data without taking into consideration how other things changed dramatically. In the 30's the economy was an apple and today it is an orange. Looking at a chart that shows participation rate and correlating that to wages and share of the economy has to be taken with a grain of salt.

What is more significant is figuring out how taxes have changed over the last 75 years. In 1937, the typical working adult paid very little of his income to taxes. Now taxes of all types can easily consume over 50% of a working person's income, but for someone who is super rich, that number can be easily less than 15%. It doesn't take a rocket scientist to figure out where the money is going and why working people can't get ahead while the rich have no problem getting richer.
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-22-09 10:17 PM
Response to Reply #51
54. Of course it was different. That's the point. A higher % of the population works than ever before,
Edited on Thu Jan-22-09 10:21 PM by Hannah Bell
but we're no better off. Supposedly we can't even afford to provide retirees with a dignified old age. Supposedly one worker could support 9 people in 1960 (look up the dependency ratios) but can't support half that today, even though he's three times more productive.


"In 1950, only about 1/3rd of working aged women worked outside the home. Now about 70% do. So the labor pool soared. It only makes sense that wages suffered."

Oh, yes, it "only makes sense".

But someone's getting 80 hours worth of work today for the 1950s price, though the workers have to pay 2009 prices for housing, education, healthcare, etc., plus get someone to take care of their kids, plus have less time for family life, home chores, etc.

You don't want to look at that, though. You say: "working people can't get ahead while the rich have no problem getting richer."

Your answer? Ignore wages, ignore taxes on capital: increase taxes on labor, specifically SS taxes, even though it would mean 10% of workers would be funding 60% or more of SS. That is a losing proposition for many reasons, & it will mean the death of Social Security.
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Ganja Ninja Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 02:40 PM
Response to Original message
22. "it too presents the problem of building resentments among the very rich"
I don't have a problem with that.
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MajorChode Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 02:58 PM
Response to Reply #22
24. They certainly don't
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 04:42 PM
Response to Reply #22
29. "the very rich" don't, for the most part, pay FICA. & i'd be fine with that,
if they wouldn't steal it, as well.
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Romulox Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 02:44 PM
Response to Original message
23. The wealthy surely have a better PR department than the poor.
We should also eliminate progressive income taxes and make WIC available to the Warren Buffet crowd.

Wouldn't want to risk the resentment of the very rich! :eyes:
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The Magistrate Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 03:51 PM
Response to Original message
26. Eliminate The F.I.C.A. Cap, Retaining Benefit Cap, Sir, Is My Favorite 'Tweak' Here
And has been for years.

Diversion of a proportion of capital gains taxes into the program would be a good measure as well...
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 04:45 PM
Response to Reply #26
30. yes, do that & 10 years down the road we can have a clintonesque "welfare reform".
preceded by five years of arguments over who has to pay "too much" to support who's "lazy ass."

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MajorChode Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 07:01 PM
Response to Reply #30
32. So you think those arguments have merit?
Yep, those "lazy" old people shouldn't have to be supported by those who benefited from their labor, right?

It's simply more irrational fear that the fat junkie's arguments are going to hold any more water 10 years from now than they did 10 years ago.
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 07:03 PM
Response to Reply #32
33. um, welfare reform was enacted.
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MajorChode Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 07:12 PM
Response to Reply #33
34. So what is your point?
You think that we can't reform welfare funding today because 10 years from now the fat junkie might convince people that the rich are getting a raw deal again? If you fear the political power of the wealthy so much, why not just say to hell with it and let the conservatives take over today?
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 08:26 PM
Response to Reply #34
36. um, they HAVE taken over. Welfare "reform" was a Democratic gift.
And this is how they do it, little by little, with "reforms" to deal with "crises," both of which are not what they appear to be on the surface.

1. Social Security has been in surplus for more than 26 years, & will continue to be for years to come.

2. The forecast used to predict future deficits is based on highly debateable assumptions, & has mostly been wrong about conditions in the next YEAR, let alone the next 75 years.

3. The entire 2.3 trillion currently in the Trust Fund can easily be repaid over 20 years simply by rescinding Bush's tax cut to the top 1%, which, if not rescinded, gives them 1.2 trillion extra in walking-around money every 10 years.
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MajorChode Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 09:32 PM
Response to Reply #36
43. Now the GOP is going the way of the Whigs and still you want to hand the reins to them
The part you are missing is it's not a matter of whether SS can continue to write checks. It's a matter of who pays for those checks.

SS taxes are severely handicapping the lower and middle classes while the rich don't pay anything and benefits are still woefully inadequate. Perhaps you think that situation is acceptable, but I don't.
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 09:57 PM
Response to Reply #43
45. Yes, it's a matter of who pays. Rescinding Bush's income tax cuts to the top 1%
Edited on Wed Jan-21-09 10:10 PM by Hannah Bell
pays off the 2.3 trillion borrowed from the Trust Fund.

Out of income taxes on the richest fraction of the population, including capital income.

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MajorChode Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-22-09 04:19 AM
Response to Reply #45
46. That's a step in the right direction but it doesn't go far enough
'Paying off the trust fund' as you suggest, is really meaningless if the FICA tax is not lowered. The only way to significantly lower the FICA tax is to start demanding that ALL income go to fund the SS program. FICA is one of the most regressive taxes we have.
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-22-09 01:51 PM
Response to Reply #46
48. not in its payout. if all income is taxed for ss, there's no need for a
Edited on Thu Jan-22-09 01:52 PM by Hannah Bell
separate ss tax; fold it into universal welfare/guaranteed income for all & fund it from the general budget.
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MajorChode Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-22-09 06:06 PM
Response to Reply #48
50. I would strongly advocate that
This is essentially what happens anyway, but most people have the illusion that their FICA "payments" are going into some sort of magical account that will be available for them someday. FICA is a tax based on income, pure and simple. As such it should be progressively levied on ALL income.
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Hannah Bell Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-22-09 09:41 PM
Response to Reply #50
53. no, it's not what currently happens, no matter how often you say so.
but if that's what you *want* to happen, it's called universal guaranteed income. feel free to advocate for that, instead of for turning SS into welfare.
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sammym3 Donating Member (24 posts) Send PM | Profile | Ignore Wed Jan-21-09 09:35 PM
Response to Reply #26
44. I really like your idea about diverting capital gains taxes.
What a trade off!! Also, how about my rich uncle being able to assign his SS to his poor niece with five children? Or to his bed-ridden daughter or handicapped granddaughter? Allowing this payment to off-set other Fed. assistance if greater?
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mmonk Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 04:42 PM
Response to Original message
28. Raising the cap is what I've been arguing for here.
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mainer Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-22-09 02:09 PM
Response to Original message
49. Agree. And SS benefits should be taxed above a certain income.
I agree that everyone should feel invested in SS -- so the benefits should not be means-tested. And raising the cap until, say, the first $200,000 of income -- makes perfect sense.

SS benefits should also be considered fully taxable income. Some recipients have investment income that makes their total retirement income pretty large. Why shouldn't SS benefits be included in that income total? They'd still get their benefits -- but if they're wealthy, they'd also get taxed.
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Hekate Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Jan-23-09 02:59 AM
Response to Original message
55. NO to means testing. That makes it "welfare" and too many object to their taxes being used that way
... in this benighted country. FDR knew that. This way everyone pays in, and everyone gets something back. It makes them willing to be taxed for this purpose.

I'd like to see the cap lifted, or just raised, though.

Hekate


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