Poll: Tax the well-to-do more for Social Security
There's a lot of support to raise the cap on how much income can be taxed for Social Security. What do you think?
This post comes from Brandon Ballenger at partner site Money Talks News.
Among Americans age 50 or older, 61 percent support raising the cap on income subject to Social Security tax, an Associated Press survey finds.
"Among Democrats, support was at 73 percent; among Republicans, it was 45 percent," the AP says. The survey included more than 1,000 people.
The cap is currently $113,700, and will increase to $117,000 for 2014, according to the Social Security Administration.
Individuals who make more money than that don't pay Social Security taxes on the excess.
If the cap were raised, higher earners would contribute more to the program -- but it wouldn't change what we five-figure earners contribute because it's not changing the tax rate.
The survey documented other opinions about Social Security, including:
- 62 percent of respondents oppose changes to the way benefits are calculated if the change would result in lower increases, as a proposal to switch to using a "chained" consumer price index would do. Just 21 percent support it.
- "58 percent oppose gradually raising the age when retirees qualify for full benefits, while 29 percent support it."
- About one-third believe the age for full retirement benefits should be lower than 65, while 10 percent say it should be higher than 67.
- 41 percent support reducing benefits for high-income seniors, while 44 percent oppose the idea.
It seems likely that some kind of change is coming. AP says:
Changes to Social Security are on the horizon because the trust funds that support the massive retirement and disability program are projected to run dry in 2033. At that point, Social Security would only collect enough taxes to pay about three-fourths of benefits. If Congress doesn't act, benefits automatically would be cut by about 25 percent.
What do you think is the fairest solution to increase funding for Social Security?
More on Money Talks News:
Tax 100% of earned income. Why should lower wage workers pay never ending SS?
Am fortunate enough to exceed the limit.
Yes. But make the fund "untouchable" by those in charge.
If you have paid into Social Security, you are entitled to payment when you retire. You are not entitled to a raise every year or so for any reason. That is not how pensions or insurance works. Social Security is meant to keep you out of poverty, not pay for every convenience life has to offer.
It didn’t happen all at once, but the dream that was the United States of America, the Great Republic, has died. Other countries hostile to the idea of true freedom didn’t cause it; it wasn’t caused by a radical religious organization. The downfall of the United States was all from within its own borders, by its own people. The people, for whom others have died, have allowed the country to die a slow death. The me too, me first attitude that started many years ago, along with the idea that all are entitled to the fruits of others hard work, has allowed this country to bleed to death. When the British raised the tax on tea, our forefathers should have just shut up and paid the tax. Almost 240 years later, what has changed? Thousands have died for absolutely nothing.
"The cap is currently $113,700, and will increase to $117,000 for 2014, .
Individuals who make more money than that don't pay Social Security taxes on the excess."
Yes.........But they also are capped out on how much of a SS benefit they'll receive. If you raise the cap on the salary, then the amount paid out should also go up.......... Oh wait, we'll just implement 'means testing' and pay out less.........that's the 'New Amercian Way" Penalize respsonsible behavior and reward non-contributors
What do you think is the fairest solution to increase funding for Social Security?
Stop taxing people and companies and let everybody save for retirement according to their own means. My "golden" years would be way more enjoyable if I didn't have to support folks who simply won't save for their own behalf.
This and all the other Socialism schemes reward people for not taking care of themselves. It's un-teaching people to fend for themselves. This program will end in ever increasing class warfare as those who become addicted to free government handouts/services demand more and more of the working.
What a surprise...a majority of Americans favor raising taxes on that great group "everyone but me". Let me sit down for a minute while I recover from the shock. In January 2005, President Bush attempted to get Congress to listen to a modest change in the Social Security program. If you wanted to stay in the system as it is, you could. If you wanted to begin to transition your 2% of your contributions to a private 401k-style plan, you could do that. Actuaries I talked to told me that the math actually worked long-term. BUT NOOOOOOOOO.......!!! (as John Belushi might say.) The collectivist cabal in Congress screamed and howled so loudly you would have thought Bush was screwing one of the Kardashians. The result- Nancy Pelosi as Speaker of the House in 2006.
Fast forward to Fall 2013. The system is nine years closer to being broke. As everyone knows, the government knows best, and they are so much more attentive to everyone's needs than ever before. So......the answer? Take more and more money from more and more people forever and ever, and promise to give it back to us. The unwashed masses think this is a great idea, because the money is going to come from someone else, and be given to me. The most productive among us will have more incentive to hide more of their income, which will ensure that no more money gets into the system. The system will still be on a collision course with catastrophe, because more and more people will retire every day and demand their due.
And the best part is....Democrats will continue to get elected, and be able to make promises they can't keep, because clearly all of these financial shortfalls will be the fault of Republicans, the Tea Party, George Bush, greedy wealthy people, Rush Limbaugh, and so on. Yep; this is a great world we are building for ourselves.
Social Security is a self funded pyramid scheme, which only works as long as there are more people paying in than there are receiving benefits, and as long as benefits are not far more than payments made plus a fair growth rate (most recipients receive far more).
The SS trust fund had a lot of money which needed to be invested. It was invested in government securities. That’s okay as long as the government can afford its obligations (it can’t). In 2030 (may not be the actual date) SS will pay out more than they take in. That is not necessarily bad for SS because they have all that money invested in the government. One problem. The government can’t make good on the investments. The government is so mis-managed that in order to pay SS what it owes them it needs to raise taxes. That is why they say SS affects the deficit.
I think that many are overestimating the actual amount they have paid into SSA. I've been paying into SSA since 1965, actual real work (40hr./week) didn't start until 1969 my first year fulltime job, USAF, my inflation adjusted yearly income since 1969 (including 5 years of part time work when I returned to school and almost 24 months of not working at all) is $63,000.00/year and for my highest 35 years (the number used to calculate my SSA benefit) is inflation adjusted at $72,000.00/yr. My contributions to SSA since 1965 has been just about $96,000.00 and employer match is about $102,000.00. Now I've averaged $72K/ year and I see so many claiming that they have contributed hundreds and hundreds of thousands to SSA. That is actually hard to grasp as I have reached the maximum contribution level for 18 years of the last 45.
In the last 17 years I have accumulated over $500,000.00 in my 401K plans. Which means that I would need to withdraw almost 5%/yr. from those monies to match my SSA income. Which has been the better investment?
1. Remove (not just raise) the earned income cap;
2. Raise, over the next 10 years, the full-benefit retirement age to 70; and
3. Reject use of the chained CPI to calculate the annual COLA.
Nothing else is required to maintain today's level of benefits into the future.
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