The Opportunity to fix Social Security. It's a wasted moment to not simply

[themaguffin]

as part of this or something else in the near future - a simple remove in the cap on the tax.

It's ridiculous that a cap exists. That's regressive and leaves a massive amount of revenue on the table.

If they want want to "reform" social security then there you go.

[leveymg]

1. Tax the rich like everyone else? What do you want, Socialist Security?

And for the last time - no ponies.

[tcaudilllg]

26. Sure! Better than rule by the antipathetic rich.

In this age of technology, you can't start a business without a huge amount of start-up capital. (unless you can knit or draw)

[tcaudilllg]

27. Check that -- only knitting and crafts

[DURHAM D]

2. If the cap is removed are you happy to increase the maximum benefits?

[mopinko]

5. yeah, it's not ridiculous. it has a purpose.

and if you don't raise the max benefit, then it is no longer an insurance program.

[DURHAM D]

6. Yep -

I don't think the majority of posters realize that there is a second part to the cap removal.

[mopinko]

7. not just posters.

i used to scream at the radio every time i heard al franken say it.

[themaguffin]

12. that makes no sense - of course it would still be an insurance program

[mopinko]

13. tell me, does your car insurance company charge you

based on how much you can afford to pay? does mine charge me more if i can afford to pay more for the same coverage as my neighbor?

[themaguffin]

17. seriously you want to make an illogical comparison? The tax is

just that a tax. SS maybe an insurance, but it's funded by a tax, unlike your auto insurance which is a private company you selected and pay for based on other criteria.

[mopinko]

20. so, fica means?

Federal Insurance Contributions Act
a tax is something everyone (except for cheaters) pays to help anyone. fica is a payment that you make to your ss fund. it is your money, not the governments, even after you pay it. that is what makes it not a tax.

[slipslidingaway]

15. + 1000 n/t

[TacticalPeek]

3. And apply it to all income.

Do two things and the system is financially sound for 75+ years.

[TacticalPeek]

4. As a pleasant side effect, it would make the dark side rue the day they touched the rail.

:smoke:

[Dawgs]

8. ...and lower the retirement age.

Good luck with getting our democratic pussy politicians to say anything like that.

[bahrbearian]

9. If they are putting it on the table they should have the decency to tell us what is on the table.

[woo me with science]

10. They will pull this to the deadline,

all behind closed doors.

[PoliticAverse]

14. They have to pass the bill for you to know what's in it... n/t

[flpoljunkie]

11. As Pelosi said on entitlement reform, 'The devil's in the dirty details.'

[slipslidingaway]

16. As asked above, do you want to change the benefit side as well ...

http://www.ssa.gov/oact/cola/cbb.html

"Social Security's Old-Age, Survivors, and Disability Insurance (OASDI) program limits the amount of earnings subject to taxation for a given year. The same annual limit also applies when those earnings are used in a benefit computation..."

[themaguffin]

18. you don't need to, you need only change the top benefit amount to

apply to those who paid tax amounts of "X and up"

[slipslidingaway]

23. Then you open it up to being called a welfare program. n/t

[tcaudilllg]

28. Who cares?

The people don't.

[slipslidingaway]

29. You want to make sure the program is preserved. n/t

[TheKentuckian]

19. You don't have to. The increased revenues will far exceed the increased payouts.

the payouts can also be structured to be more progressive that would continue to increase payout but at a declining value.

My concern with raising the cap is raising the shenanigans of Congress and Administrations. None of the Republicans nor does a significant chunk of Democrats believe in running a surplus they will always blow it meaning we don't have a functioning Keynesian economic system and cannot maintain one. The lure of tax cuts and military adventures is too tempting.

[mopinko]

21. i have wondered many times about those numbers.

i would like to know, really. seems to me money in would be money out if things happen the way the program is supposed to work.

[Jim Lane]

25. It wouldn't be just "money in, money out" because of complexities in the formula.

There's some progressivity built into the way benefits are calculated. The result is that if you eliminate the cap, and continue to tie benefits to contributions, then retired CEO's do indeed draw huge Social Security checks each month, but the system still comes out ahead.

In 2001, a 2001 Social Security advisory board report addressed ways of dealing with the projected deficit. The report stated:

Making all earnings covered by Social Security subject to the payroll tax beginning in 2002, but retaining the current law limit for benefit computations (in effect removing the link between earnings and benefits at higher earnings levels), would eliminate the deficit. If benefits were to be paid on the additional earnings, 88 percent of the deficit would be eliminated. (See , page 23.)

The numbers would be different today, but the principle is the same. If some CEO's end up getting $100,000 per month in Social Security benefits, the link between earnings and benefits will be preserved, so it doesn't look like it's unfair to the rich (or, heaven forbid, class warfare) -- but it takes a substantial step toward improving the system's fiscal health.

That's why I favor abolishing the cap but letting benefits rise as well, even if a $100,000 check for this month's Social Security is more than a little disconcerting.

[slipslidingaway]

30. Thanks for the explanation and link. n/t

[bornskeptic]

31. Here's how Social Security benefits are calculated.

The retiree's highest 35 years of earnings are looked at, including zeros for missing years. Each annual total is adjusted for inflation to current dollars. The 35 amounts are added and averaged. This is the retiree's average wage. The annual benefit is then calculated as follows. The numbers here are estimates, but should be very close and will give the idea.

90% of the first $9000 +
32% of the amount from $9000 to $64000 +
15% of the amount from $64000 to $106,800.

As you can see, it's already quite progressive. One way to handle an increase in the cap would be to include the additional amount in the 15% bracket, or you could make it more progressive. The Bowles-Simpson proposal would raise the cap to about $180,000 in 2010 dollars and compute the benefit as

90% of the first $15,000 +
30% of the amount between $15,000 and $63,000 +
10% of the amount between $63,000 and $102,000 +
5% of the amount between $102,000 and $180,000.

[slipslidingaway]

22. Definitely agree with your concerns about any surplus and how it might be used ...

not sure how much excess there would be unless the maximum paid was also revised.

[blkmusclmachine]

24. It's a made-up crisis to bilk people out of their Social Security

DC Crooks. Every last one of them.