General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsRaise the Social Security payroll tax cap from $110K to...
...those making up to $300K.
SOLVED!
See, it's that simple and no one gets hurt.
---
Suich
(10,642 posts)but I rarely hear anyone suggest it.
Kaleva
(36,351 posts)but they get little support.
Jeff In Milwaukee
(13,992 posts)Eliminating the cap would (obviously) bring in staggeringly higher revenues to the Trust Fund. That would allow the actual rate to be much lower. That would put money in workers pockets and cost employers less in payroll taxes. It's a stimulus and a nifty incentive for businesses to hire more employees.
Kaleva
(36,351 posts)KarenS
(4,087 posts)jschurchin
(1,456 posts)customerserviceguy
(25,183 posts)that the cap is tied to the maximum benefit? You'd see rich-ass bankers and such paying a few extra dollars for a few years, then getting hundreds of dollars a month more in benefits for the rest of their lives. And they'll live a lot longer than the poor folks who sacrificed their health for their wages.
Here's a better idea: Raise the cap modestly, but eliminate it on the employer's share of FICA. If some megabank wants to pay some idiot ten million dollars a year to run the thing into the ground, they can afford to pay FICA tax on all ten mil.
Major Nikon
(36,827 posts)customerserviceguy
(25,183 posts)when I try to explain the concept. Many highly paid asshats do take home compensation packages for piss poor performance. And that's the other thing: Stop treating the stock options, etc. that they get as being exempt from employer FICA.
Any problem with that?
Major Nikon
(36,827 posts)I've always believed that all income should be treated the same.
customerserviceguy
(25,183 posts)for differential treatment by payroll taxes, but the artfully designed compensation packages are just wages and salary by another name.
Thanks for your support of the concept, I've brought it up here dozens of times over the past couple of years, and all it's met with is yawns. It would seem to me that the President might take it up and champion it. He's been otherwise unafraid to go after the well to do with tax increases.
exboyfil
(17,865 posts)Right now the folks making from $50K to $105K are carrying the system. Have incomes above the $105K approx. maximum withheld at a lower rate that reflects the lower percentage benefit of that income over $50K. The income will not enter into the calculations, but on the other hand it is taxed at a lower rate so it is just as fair as asking someone making $105K to pony up the full withholding amount.
It is only fair.
customerserviceguy
(25,183 posts)with a passing knowledge of the monstrosity known as pension tax law, but I have trouble following you there.
exboyfil
(17,865 posts)Income from about $50K to $105K uses 15%. The first two levels are 90% and 32%. True everone benefits from the first level. The second level is about a wash for payback. The third level (15%) supports the system. Our current S.S. law basically tells high income people that you only have a certain obligation to those who make less to $105K of your income. In other words the burden of subsidizing the system falls disproportionately on those making between $50 to $105K.
One argument is that you can't include $200M in income because it would skew the benefit formula. My argument is that you can either payroll tax fully like everyone else and hear the argument that you are paying but not getting benefits, or you set the withholding rate to make the subsidization on income level approximately what is faced on incomes from $50 to $105K. Lets say income over $105K is taxed at 4.2%/4.2% for example. That takes away the argument of not getting benefits.
Note the numbers are approximate and change yearly, but the general trend with using the adjustment table of income holds.
I also think we should lower withholding rates with this change to go to a pay as you go with eventual draw down of the trust fund. Rates adjusted asnnualy to maintain pay as you go with a suitable balance for contingencies. I have some other thoughts for if revenues are insufficient and the maximum we should ever expect anyone to withhold (7.5%/7.5%).
democrattotheend
(11,607 posts)I would much rather see the cap rise on the employee share. Do it on the employer share and it will have a negative effect on the already sucky job market.
customerserviceguy
(25,183 posts)It would have zero effect on jobs that pay under it, and that's where we need the most jobs. The big corporations that pay megabucks to some CEO wouldn't bat an eye at this, they'd just consider it part of the bloated compensation package that they will fork out in the vain hope that this particular dorkweed will somehow be their 'savior'.
It's low hanging fruit, why not pick it?
democrattotheend
(11,607 posts)customerserviceguy
(25,183 posts)You have to come up with a solution that doesn't raise the maximum benefit too much (by limiting the employee cap) yet raises the maximum amount of revenue, which raising the employer cap to the sky does.
I've tried to think this out a bit.
libdem4life
(13,877 posts)Loudly
(2,436 posts)gblady
(3,541 posts)100% of my wages are taxed...
why shouldn't everybodys?
and I agree.....problem solved!
democrattotheend
(11,607 posts)Eliminating the cap does exactly that, unless you proportionately raise benefits.
libdem4life
(13,877 posts)Honeycombe8
(37,648 posts)Kaleva
(36,351 posts)Honeycombe8
(37,648 posts)Pretzel_Warrior
(8,361 posts)sanatanadharma
(3,730 posts)...currently up to the cap (around) $110,000, one pays full rate (what is it 6%, assumed for argument)
At $110,000 one pays 6% on earnings
At $220,000 one thus pays 3% on earnings
At $440,000 one thus pays 1.5% on earnings
At $880,000 one thus pays 0.75% on earnings
Carry out the math and you see that Romney get the max benefit at a severely discounted rate.
Yes, I understand that he will pay more total tax, but hey, the rich get more aggregate benefit (by huge factor) from being members of our social contract.
Panasonic
(2,921 posts)and make everyone pay into it. Everyone gets their share.
louis c
(8,652 posts)why stop at $300K? Let's go to at least $1,000,000,
meow2u3
(24,773 posts)That will also raise more money for the Social Security trust fund--and the non-working Richie Riches who live off their dividends will also have to pay into the system.
But no, we can't have lazy billionaires paying taxes, can we?
Hoyt
(54,770 posts)trocar
(243 posts)That's what I've been thinking also.