Why is raising the SS tax cap off the table?

[edhopper]

It would take care of any problems SS has (which aren't part of the deficit) and let us move forward.
But the only conversation by the "Serious People", the President included, is how much pain to inflict on the olds and the poor.

This is just bullshit.

[dkf]

1. Because the Dems and their allies are insisting it doesn't need to be touched at all.

For some reason they think they can't discuss any changes that are needed. I personally do not understand why it's not all on the table.

[dawg]

3. Aw, for crying out loud.

You know we aren't saying that. Many of us, myself included, think that benefit cuts should be totally off the table. But no one is saying that about lifting the cap. You know that.

[edhopper]

6. "Serious People"

is shorthand for the pundits and politicians who make up the national conversation. Not us here on the forums.
Just as they won't be swayed away from austerity, they only talk about cutting SS for a solution. When did you here anyone outside of Krugman call for an increase in the cap?
It's always catfood for the olds and poor.

[Bluenorthwest]

7. Support that assertion.

Most Democrats are advocating lifting the cap, which Obama ran on, many are advocating expansion of the program, and they are doing so using facts and figures which are always suspiciously missing from posts such as yours, free of cites, free of facts, free of figures.
This President won my vote by advocating policy he dumped as soon as he won. Such as lifting or removing the cap, his proposal actually created a 'doughnut hole' leaving the portion of income between the current cap and 200k untouched and income above that subject to FICA. I supported that. As a person who pays on each side of the cap, depending on the year. Obama never brings that up anymore. It was just stuff he said to win.

[edhopper]

10. I have not seen this

could you name some Dems in office who are saying this?
I would be happy if I am wrong.

[dkf]

16. Seriously? Like I don't hear the slogans on TV all the time?

"There is nothing wrong with Social Security"

"Don't touch my social security"

"Social security is fine for decades".

If I had a dollar for each time I hear that...

[Bluenorthwest]

71. I have no idea what you hear on TV. That's why I asked you to support your assertion

You type up phrases in quotes that are not quotes. Just stuff you typed up. Your words.

I asked if you could support your assertion. You should have just typed 'NO, I can't, but I can make up more crap and put mendacious quotation marks around it'.

[hfojvt]

23. but, but. but

Obama's not a dictator

Republicans will never vote for raising the cap.

Plus, he promised to NOT increase taxes on people making less than $250,000 a year and raising the cap would be a big tax increase that would hurt the middle class.

Just like he said in the debates. http://www.democraticunderground.com/?com=view_post&forum=1002&pid=2618869

Err, well, SOMEbody said it.

Hillary 2016!!!!

Wait, where was I?

Clearly, since Obama is NOT a dictator, Obama cannot even propose that we raise the cap. Clearly Obama MUST make serious proposals that give Republicans 85% of what they want.

Because that's why we voted for him - to give Obama a mandate to get us 15% of what we want. Well, maybe he could start out fighting for 22% of what we want and then "compromise" on 15%. Some were calling that a huge victory back in January.

And if you aren't happy with 15%, then you are probably really just upset that the black guy won, you firebagging teahadist you.

[liberalmike27]

45. For 90% of Us

It wouldn't matter. If you earn less than $110,000 (roughly) a year, it won't change what you bring home at all. Above that, the normal amount will be withdrawn.

Something to think about: Since we've borrowed 2.7 Trillion, that lays in treasury bills, and starting now will slowly need converting into cash to pay out to recipients, perhaps the better question is, how do we raise money in the general fund? Because the money to pay that 2.7 Trillion back, should come from the general fund first, from regular income taxes, preferably from the rich since they've had tax cuts paid out partially from money collected FOR paying SS out to people.

Yea, somewhere down the line, we'll need to work higher SS taxes in, so we'll have money in 2034 or so, when that 2.7 Trillion runs out. But let's make sure we pay that back first, not increase taxes that might just be spent on wars and tax cuts for the rich, again, and not be available, ultimately to be forfeited at some future date when Republicans finally manage to destroy the institution. Because that is what the republicans want, which will amount to us all having had an extra 15% tax that IS NOT paid by those who earn over the cap, or for that matter, from Capital gains.

[Bluenorthwest]

69. Some years I pay under the cap, others above. I support removing it entirely. Obama used to propose

a 'doughnut hole' style that would pause the FICA between the current cap 113K and resume it again at 250K which is also a great idea. He ran for office claiming that was his policy. He lied.
If first earned over the cap when I was 24. I started opposing that cap the day I learned about it.

[randome]

89. I'm not sure you can characterize it as a 'lie'.

He can't do anything so long as Republicans control the House.

[still_one]

26. For the same reason the public option was never on the table for the ACA. These representatives are

beholding to the corporations and wealthy, not the majority

[hfojvt]

27. and by Dems

I assume you don't mean Obama

I mean because now that he has been elected, Obama is clearly unable to say things like this http://www.democraticunderground.com/?com=view_post&forum=1002&pid=2618869

[whathehell]

2. Excellent question..

The only thing I can think of is that it might be perceived as a "tax"?

[rocktivity]

47. But with no salary cap

EVERYONE would pay a LOWER rate!


rocktivity

[whathehell]

48. Sounds good to me....n/t

[ballardgirl]

56. nice thought

but not true. It just means that the 6.2% OASDI would be deducted on earnings over the cap. This would add more to the SS pot, but would not change the deduction RATE for anyone.

From the SSA page: "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. This limit changes each year with changes in the national average wage index. We call this annual limit the contribution and benefit base. For earnings in 2013, this base is $113,700.

The OASDI tax rate for wages paid in 2013 is set by statute at 6.2 percent for employees and employers, each. Thus, an individual with wages equal to or larger than $113,700 would contribute $7,049.40 to the OASDI program in 2013, and his or her employer would contribute the same amount. The OASDI tax rate for self-employment income in 2013 is 12.4 percent."

[rocktivity]

63. The point is, we COULD lower the payroll tax rate without reducing revenues or benefits

Last edited Sun Apr 7, 2013, 01:23 PM - Edit history (3)

because everyone would be paying a fairer share.


rocktivity

[customerserviceguy]

78. Never going to happen

In fact, I wouldn't be surprised if a true Social Security fix would involve adding at least one percent to both the employee and employer shares of FICA taxes.

The baby boomers managed to handle some hefty increases on those taxes the last time the thing was about to hit the shoals, and the FICA tax rate hasn't been raised for decades.

[dawg]

4. As I said in another thread, because ...

if you make me pay that 6.2% on my income above $113,000, I might have to cancel the pool service. And I'm sorry. Granny's just going to have to eat some cat food. I don't skim leaves for nobody!



(And isn't it sad that I feel like I have to include that sarcasm thingy.)

[randr]

5. It is a drop in the bucket when

compared to the massive tax loop holes and exemptions enjoyed by the uber wealthy and large corporations. Add to the problem the tax exempted exportation of American jobs that are a real threat to the stability of the SSS and a realistic picture emerges of how the Republicans have maneuvered the situation.
Fix the SSS by bringing jobs back and boosting the economy with infrastructure projects. Stop the drain of tax revenues to foreign accounts. Give us our American Can Do Attitude back and the problems created by the supply sided morons of the past century will disappear.

[edhopper]

9. In terms of the deficit and taxes in general

it might be "a drop in the bucket" but since SS is not part of the debt, as a solution to shoring up the program, an increase in the cap will pretty much take care of things.

[still_one]

28. and that is another thing, why is the LIE being propagated that SS is part of the deficit. It is a

disgrace what the MSM has become, and an embarrassment what many Democrats in Congress have become

If Bernie Sanders says this wrong, it is wrong

[steve2470]

8. great thread, thanks nt

[rhett o rick]

11. Here's some reasons.

1. The President is being pragmatic at a time when children are going to bed hungry and we are losing our freedoms and liberties.

2. The President is conservative and really isnt a big fan of social programs.

3. The President loves us but cant fight the Elite 1% control.

4. The current standard of living in the USofA is too high for the New World Order.

5. ??

Other reasons?

[xtraxritical]

25. The President sold out.

[AnotherMcIntosh]

30. Maybe others did as well.

[rhett o rick]

66. Cant rule that out. Although to "sell out" means that he changed his

ideology for a price. That assumes his ideology was not conservative to begin with.

[Rain Mcloud]

39. Maybe He is considering life after the Presidency

and a kickass seven figure career in the profiteering industry just like the others in his staff have gone on to.
We do know that Jamie Dimon uses the Jeff Guckert door and has direct contact with the O-man whenever he wants to pop in.
Obama even gave Dimon a set of his official cufflinks or else Dimon nicked them from the desk drawer when his back was turned.
Did Dimon offer the future ex-President a seat at the executive table and the momento cufflinks,were they a reminder of the deal?
Since the Banksters own the media through many layers of faceless corporations,this will never be considered on the Sunday T.V. Pravda.
The Robber Barons and their toadie Unkle Karl would not like a light too close to the off shore rat hole,they must have the cover of darkness to thrive.

I simply detest the fact that people and yes this,includes progressives can be coaxed over to the third way with a little scratch so that they may have finer serviettes at the table while granma gets fisherman's feast for dinner and junk mail for Papel Nuncio!

[xtraxritical]

88. Ex Presidents do speaking engagements to get paid.

[Rain Mcloud]

90. Hmmmmmm.

Maybe closer to the truth than I thought.

[CrispyQ]

12. Didn't Prez O say he was in favor of raising the cap during his 2008 campaign?

Has he mentioned raising the cap since or was it just one of those campaign statements to lure the liberals in?

[rurallib]

18. during 2012 he said loud and clear that SS would not be touched

damn near every stop.

[winter is coming]

20. I guess he was planning on using drones. n/t

[Bluenorthwest]

72. Yes he did, in great detail. It is how he won my vote over Hillary in the end.

He proposed a doughnut hole for the cap, so it would halt where it now halts and resume again at 250K in income and above.

[Volaris]

13. Because that would make sense

and this is the US Congress. MOST of the time those 2 institutions (Congress and Sense) are incompatible, doubly so in its present incarnation (GOP House and Obstructionist Senate).

[Shrike47]

17. Boy are you right.

[Volaris]

29. Are you being sarcastic? Forgive me, it's morning and I work overnights, my brain is tired lol...

if so, tell me why you think so, it's ok differing opinions are always welcome=)

[winter is coming]

14. Because it could work. Just like single payer, any plausible option that

isn't "serious" enough is invisible.

[naaman fletcher]

15. Here's the real answer:

SS is a broadly popular program that has improved the lives of almost everyone in the country.

However, its appeal is not just in the results, but in it's sense of fairness: You pay in, and you get back when you are retired.

If you life the cap on earnings, then for a certain percentage of the population it becomes "you pay in, and you get back up to a point, and then after that it is welfare i.e. you are not getting back what you pay in for".

So, for supporters of SS, raising the earnings cap is seen as somewhat of a third rail. Nobody knows what will happen if you touch it. so, they would like to save it without taking the risk of touching it.

[Benton D Struckcheon]

19. This is true n/t

[cthulu2016]

22. the cap-raised folks would get huge benefits

The cap-raise idea is not that people would pay in big as charity. They would get big benefits for their big pay-in. But they would get those benefits later while paying in big today.

It's a cash-flow thing. Taking in big taxes today would help get through the baby-boom demographic bulge. Hence the policy idea.

[Benton D Struckcheon]

41. If that's the idea it might work. n/t

[liberalmike27]

55. Apparently there is a Maximum Amount

http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/5/~/maximum-social-security-retirement-benefit

While it does depend on salary throughout your life, there is a maximum.

[liberalmike27]

57. And an average

What is the average monthly Social Security benefit for a retired worker?

The average monthly Social Security benefit for a retired worker was about $1,230 at the beginning of 2012. This amount changes monthly based upon the total amount of all benefits paid and the total number of people receiving benefits

[eridani]

81. No--you just eliminate the flat benefit cutoff line and replace it

--with a line having a small upward slope.

[still_one]

31. well they did something similar when raygun was president. Tip O'Neil and ray gun helped preserve

SS by allowing it to be taxed if people made in excess a certain amount of money

Raising the CAP is no worse than that.

[stopbush]

40. That's an incredibly specious argument. Here's why:

1. You say, "you pay in, and you get back up to a point, and then after that it is welfare i.e. you are not getting back what you pay in for."

There are millions of Americans who pay into SS for their entire lives and never collect a cent because they DIE before they reach the age to qualify for SS benefits. Others pay in for decades only to die within a few years or months of having retired, never getting out what they "put in." Such people get NOTHING back for their decades of contributions. Nothing.

2. Gains in longevity have redounded entirely to the upper classes in American Society. The fact is that the rich will be the long-term recipients of SS benefits, not the Average Joe. Ergo, it makes sense for them to pay more into the system as they will be the long-term beneficiaries of the same. Otherwise, they become a drag on the system.

If you want to talk about fairness, you can't do it in a conservative argument-framed bubble.

[liberalmike27]

51. That is True

As with most "insurance" programs, some collect less than others. You might collect nothing, or you might be on disability, or you might be a kid whose father died, like me and the money might help you go to school for a bit. I know it was a life-saver when my dad died of a heart-attack at 39.

Stuff happens, and believe me, it's good to have the "insurance" around.

And yes, class differences do exist as far as life expectancy, but there are rich people who die young, and poor people who live a long time. Once again, it is a purposeful mistake republicans make, when they pretend it is an investment program.

In some countries they compensate for poor people dying younger, by adjusting the age one can collect downward for working class jobs. It makes sense. These idiots keep talking about raising the age, but at 57 I wake up in the morning and everything hurts. I can't imagine going out and doing hard labor all day, until I'm 67, or 69. That's for people who work in the Senate.

It'd be easy enough to put a cap on what is paid out, if there isn't one already, no matter what is collected. FDR assured us that we'd all have it, even the rich. He did that because he felt the rich would be less likely to mess with it, if they too got a check. There is a certain logic there, and if the rich can be means-tested off it, then it could be a problem down the line. It is clear that rich people, with large salaries will pay more. And that is how it should be. We just need to get capital gains folks to pay also, at least up to the cap.

[naaman fletcher]

54. I'm not arguing that point

You are arguing points that have nothing to do with what I said. I am for raising the tax, I am just pointing out why even many on the left are hesitant to do it.

[liberalmike27]

58. Certainly I Expanded it a Bit

But I also addressed at least the underlying premise, that SS was some sort of investment. My point is, insurance isn't an investment. It insures you against loss, against old age with nothing.

FDR did it for several reasons, the main one being there were a lot of homeless, uncared for people, who had worked for their entire lives, and ended homeless and destitute. Second, it removed people from the unemployment line, by retiring them. Both still apply.

Like I've said, raising the cap won't even affect anyone who earns less than $113,00. Someone said above "We don't know what will happen if we raise the amount for the withdrawal cap. I think we do, as the wealthiest top ten percent will just pay a bit more. People just over that amount, would pay a little more, and if you make well over it, you'll pay a lot more.

Some have suggested a doughnut hole, raising the cap to $200,000, then kicking in again at $500,000 a year. Personally I'd make sure those who earn their money by trading would pay it too.

[GoCubsGo]

21. Because it's a revenue increase.

And, the rethugs will obstruct it, like they're going to do with every other revenue increase the president propose--including the one to which his current SS cut proposals are linked.

[JaneyVee]

24. Its funny how the current cap is $113,000 yet the GOP thinks middle class is $250,000

Shouldn't those "middle class" folks be paying into SS?

[bvar22]

32. the GOP thinks middle class is $250,000

Not JUST the GOP.
Hillary thinks so too!

[lumberjack_jeff]

37. So what happened when Obama followed through on this promise?

Is it a virtue to promise what you don't plan to deliver?

[forestpath]

33. Because the rich would have to pay their fair share. And that wouldn't fit

Obama's definition of "balance."

[Festivito]

34. For me, it's because Republicans hold the House.

They want their pound of flesh, so to speak, or they will destroy the economy. With the economy destroyed SS will not receive the income it needs and SS will look bad in coming years making SS easier to destroy, then.

Obama is offering something that will hurt people in the future, but, in the future what Obama is proposing can be reversed. So, it would behove the takeover minded lords to send out concern trolls who will not allow this situation to be seen as a tradeoff of Republicans versus Democrats. They only shout that Obama is wrong.

[librechik]

44. yep. we don't have the votes.

it's revenue and the Repubs have declared Obama already got enough of that.

[Festivito]

65. Not in the House.

Nor, for the House.

[cantbeserious]

35. Because The 1% Don't Want To Pay

eom

[lumberjack_jeff]

36. Yeah, it's odd that a cornerstone of his '08 campaign is something he never once suggested as prez.

[pangaia]

38. Greed. As 'they' say-- unfettered capitalism.

Or, if you prefer.. fascism.
Those 'with' do not want to give up even a tiny percentage of what they have or the chance of getting even more.
They do not want to help those 'without as much'.

Look at baseball.(just an example and I LOVE baseball..well minor league baseball).. All-star MLB players making 10 million and more a year will leave for a team that will pay 1 million more, or even $500,000 more. ! WTF is that?

Also, most minor league players do not make enough money to live on.. I think the lowest salary is something like $1300/month..for at most 3 months. true, guys who have been reach Triple-A can make a living wage.. but.. the point is most don't. or barely if they climb the ladder..

Each major league team has something like 180 minor league players under contract...give or take..If any major league team just allotted $1,800,000 more to their minor league affiliates, each minor league players could get $10,000 more.. But they won't.

Albert Pujols will get $13,000,000 in 2013 and $30,000,000 in 2021 ! What in the living hell does one do with that much money? Jeez, if he just gave up 1.8 million each year all those minor league players could afford to do their laundry. Nothing against Pujols, just an example.
If you want to see his entire deal, check this out.

http://espn.go.com/los-angeles/mlb/story/_/id/7428226/albert-pujols-deal-completed-los-angeles-angels-worth-240m-10-years

Is that obscene or what??
It is not quite that simple, but you get the picture.

The same is true with minor league umpires. (And Bud Selig hates umpires.)

Oh, but no salary cap.. that's socialism....tsk tsk...

Gotta go.. opening home game today.. $12.50 for a box seat right behind the 1st base dugout. I can afford several minor league games each year. I'm lucky....

[librechik]

42. because it's "revenue" and the Repubs won't allow it

and we'd need the House to do anything about it, so fuck us.

[homegirl]

43. Raise the Cap

Let's hope Obama is in this to win. In order to win the Democrats must control the House. So, 2014 is really the BIG election year! Open your wallets, volunteer your time, learn which districts can be turned from red to blue and support the Democratic candidates in those districts. Remember, when it comes to politics " Money talks, BS walks."

[Marr]

46. Because the political leadership (on both sides) is comprised of stooges for the 1%.

And they make their arguments in corporate media outlets.

Excluding simple and obvious facts from debate is something they do all the time. You get to choose between the corporate solution, or their corporate solution.

[on point]

49. The serious people can 'cut' social security as soon as they are willing to 'cut' paying off T-Bills

[Cleita]

50. Probably because it's a raise in taxes and our minority overlords, the Republicans,

just don't want to pay any taxes, ever.

[lumberjack_jeff]

52. Because only candidates promise these things. Very Serious People do not. n/t

[Hoyt]

53. Couple of reasons, benefits would go up too and it would amount to a 14% tax increase.

I don't think that would work right now, no matter how attractive it might be to those not impacted.

I think what would work is some lesser amount of tax over today's cap. I think eventually we will get something like that, especially if the economy ever improves (which I'm not convinced will happen).

[grantcart]

59. interesting point.

Obviously we would have to have a Democratic house to consider that tax.

[watoos]

60. It's not on the agenda

of the corporate-controlled media. The biggest lie out there is that the media is liberal. They control the narrative.

[primavera]

61. Are we even sure we need to?

Huffington Post ran a piece not long ago, based upon the findings of the National Association of Social Insurance, which found that Social Security was perfectly solvent and that all of this hype about Social Security going bankrupt was pure propaganda. I myself recall reading some years ago that Social Security actually had tons of money, the problem was rather that other government programs had been borrowing from those funds, the implication being that, if the monies borrowed from Social Security were paid back, there would be no problem at all. So my question is: are we certain that Social Security actually is in trouble financially and needs radical steps taken to restore it to solvency, or are we just being led about by the nose by a bunch of right-wing anti-government types?

[Benton D Struckcheon]

79. Everything depends on the assumptions you use

The main one is productivity related wage increases. Lowball this and you have a problem. Use assumptions with a reasonable average for productivity and it doesn't have a problem.
I ran the figures years ago, and it would take me a while to recompile all the data to do it again, but it was pretty clear what was going on as I remember. Productivity rose in the latter Clinton years and has stayed above the assumptions SS uses most of the time since then. If you assume it continues along this path SS is actually just fine.

[treestar]

62. It is not applying to the poor

Olds with lost of money from pensions are not going to suffer that much.

Raising the tax cap would make sense. But then trying to put a package together that the Rs will vote for may not be politically possible.

[JDPriestly]

64. Because the whole point of the Obama/Boehner plan is to

shift costs now paid out to seniors of the general fund like food stamps, Medicare supplements for the poor and housing assistance TO THE SOCIAL SECURITY SIDE OF THE LEDGER, PAY THEM OUT OF THE SOCIAL SECURITY TRUST FUND.

I finally figured that out when someone told me yesterday that the good side of Obama's plan is that it would raise the monthly payments to those under the poverty level and lift all of them above the poverty level. That's great, and it would, contrary to my prior belief, eliminate a lot of paper work. But it would DEPLETE THE SOCIAL SECURITY FUND FASTER because it would TAKE A LOT OF MONEY OUT OF THE SOCIAL SECURITY FUND that is now paid out of the general fund (which is where food stamps etc. come from now).

I am all in favor of raising the monthly stipend for those who did not pay much in and are now below the poverty level. That seniors are below the poverty level in this country, that some of them are homeless, that seniors lose their homes because one married partner gets Alzheimers or cancer and needs expensive care, is criminal.

Getting rid of dire poverty among seniors would save paperwork and do away with the need for a whole bureaucracy that we now have. Plus it would give poor seniors a lot more dignity. Think of those women who don't work all their lives and then rely on a meager Social Security benefit based on their husband's contributions when they die. I know some of them. They worry all the time. And worry and stress may be part of what is contributing to our dementia/Alzheimers epidemic.

But, this plan will deplete the Social Security money in the Trust Fund fast, really fast, so they have to reduce the benefits over time for other recipients. Problem is, nobody is getting much from Social Security.

Apparently they figure how much your benefits will be by applying a formula that, based on what you contributed over your life, looks at the years in which you put in the most, estimates what your salary was during those years based on what you put it and then calculates a percentage of that estimated salary and -- that's what you will receive in Social Security benefits.

I don't know whether they adjust for periods of inflation.

Anyway, I could be wrong. I have tried to research Social Security, but have not had much luck getting to primary sources yet.

But what I have read here from knowledgeable DUers tells me that the plan is to shift costs from the general fund to Social Security for covering the needs of indigent seniors. If they also shift money from the general fund to cover the change, great. But if they shift the money from within the Social Security Fund from the middle class seniors, reducing the benefits of the middle class recipients to make things right for the very poor, they will just end up making more seniors poor (maybe a little above the poverty line, but very poor nonetheless).

The seniors who are doing really well now have pension plans other than Social Security. Most baby boomers do not have pension plans. And a lot of other seniors don't have them either. The pension plans were pretty much replaced with Wall Street accounts that don't pay much in a month, in fact next to nothing over a month or year.

The Wall Street crash and the bad economy affect seniors very negatively although not as negatively as those who can't find work. But I know seniors and people not yet old enough to be eligible for Social Security, people in their late 50s and early 60s, who have to beg from their children. It is very painful for them.

Cuts to Social Security will make it impossible for a lot of middle class seniors to stay in their homes, pay property taxes and utilities and keep up a house and still eat and pay for medications. It will make it impossible for a lot of other middle class seniors to pay rent. A lot of seniors who owned or were buying their houses have lost the equity they had before the crash. In some areas that equity has returned. In many it has not. That means that seniors who are forced to sell their houses will be in bad shape.

So, this chained CPI plan is a sleight of hand to trick seniors who don't understand what is going on in my opinion.

And if my post, my analysis, is incorrect, if I am confused, it proves all the mores just how tricky, what a sleight of hand this is. Because if I can't understand it, very, very few seniors will be able to.

Don't cut Social Security. No chained CPI. Don't cut Medicare benefits to doctors or patients.

[carolinayellowdog]

67. Serious People make more than $133k n/t

[Cal Carpenter]

68. Because we are at that part in the evolution of capitalism

where it is harder and harder to throw crumbs at the worker bees.

The flow must go ever-upward, or the whole 'never-ending progress & growth' thing stops working and the charade is over. The math doesn't add up anymore.

This is AUSTERITY. And for any step forward we manage to make at this point (eg even if we could pull off an increase in the SS cap) there will be 3 or 4 more steps backward.

[SoCalDem]

70. Because rich people don't like that idea of "losing" money.

They see it as unfair taxation..

People making less than the cap are taxed (FICA) on 100% of their earnings..but they are "the little people" and do not matter..

[neverforget]

73. Because the 1% call the shots in Washington, DC.

We just get to live in their world.

[Flying Squirrel]

74. Because then they couldn't claim it's insolvent and keep trying to "save" it. eom

[Rosco T.]

75. The bullshit is your comment...

"the President included, is how much pain to inflict on the olds and the poor."

yeah, that's bullshit allright.

[edhopper]

84. Really?

Then explain how inflicting pain on the olds and the poor helps the deficit?
Why is the President making this part of the bargain?
Not bullshit at all if you were paying attention.

[Armstead]

87. Bullshit? That's just the simple fact.

he will propose something that will reduce the amnount that the old and poor will receive.

That's just a fact. If you don't think it matters, fine. But don't deny the truth.

[Skittles]

76. because that would hit wealthier people

they want OUR money, not the that of the rich

[customerserviceguy]

77. Got any figures on just how much that would raise?

One DU'er here actually did point me to a study of what percentage of wage earners would be affected, but it didn't include any guestimates about what those people earned over the current cap, so that I could figure how much money would be raised by eliminating the cap.

Also, we have to consider what raising the cap to any amount above where it is would do to the maximum Social Security benefit. It's not all "free money" that we're getting from the well-off with a raise in the cap, there will be some additional outlays in future Social Security benefits for those contributing more in FICA taxes.

[eridani]

80. About 5% of wage earners earn more than $150K

Instead of a flat line benefit cutoff, you substitute a line with a small upward slope.

[customerserviceguy]

83. Any figures on how much more they earn?

Again, I'm looking for a comparison of $X is how much this will raise every year for the next Y years, and we can compare that to the savings from chained CPI. I sure haven't heard any answers from those who only chant "raise the cap".

I don't think there's that much extra FICA tax to be raised that way, especially when you figure that the maximum benefit will rise, too. I don't want to see CEO's pay extra tax for a few years, then retire on their stock options, and collect tens of thousands a month in Social Security benefits. Yes, 85% of those benefits would be taxable, but even applying the top tax rate, they'd still get to keep two-thirds of that money.

[Recursion]

82. The basic argument is this

If we raise the levy cap, one of two things can happen.

1. We simultaneously raise the benefits cap. This basically accomplishes nothing, because we're increasing revenues and outlays by the same amount.

2. We don't raise the benefits cap. This helps the revenue side of things, but turns SS into a welfare program, which becomes harder to defend.

That's the basic argument. That said, I think #2 is not as relevant as it once was, because SS doesn't seem to be the third rail it once was.

[Armstead]

86. Neither of those is relevant

Raising the cap does not require benefits to be raised.

It does NOT turn it into welfare. ALL it means is that it is more like other taxes, where those who make more put a little more into it.

Actually the current tax is regressive. I get hammered by SS taxes because I don't make much money. But for someone who makes a lot of money, paying up to a certain amount is a drop in the bucket.

Raising the cap would make it slightly less regressive, while raising additional revenue. That's all.

[edhopper]

85. Some info on this

http://voices.washingtonpost.com/ezra-klein/2010/06/research_desk_responds_could_r.html

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