Social Security: Regressive Tax?

[lancer78]

I was laid off from my job today that I had for 8 years. When I asked my boss (small business that grosses 18K a month) why, he stated that the company could no longer afford to pay the social security tax of 6.2%. He stated that while it isn't much, the $450 a month was equivalent of our office's monthly power and telephone bills.

I think social security should be based on a progressive system where the rate scales up with those who can pay more. What do you all think?

[lapfog_1]

1. the business was paying you close to $87,000 a year

and it only grosses $216K a year?

but it was the $450/month that was the deciding factor for the business owner?

Just trying to understand the numbers.

[unblock]

2. rule #1, never trust the person laying you off to tell the truth about your dismissal.

it's seems improbably that your employer could confidently determine that your continued employment is not profitable under current law, but would be profitable were there no 6.2% social security tax. that's a rather narrow window. especially when there are less numerical benefits to having additional employees, such as coverage and cross-training, etc.

but to answer your question, i think most of us here would settle for that 6.2% simply applying to all income and not stopping at just over $100k.

in an ideal world, yes, it could be fully funded by a progressive income tax (our current income tax system is so problematic it's hardly even progressive anymore), but the argument that social security benefits only go to people who paid into the system goes a long way.

this could be accomplished, but it should be done in such a way that everyone continues to pay in something, just that it should start out at a very small number.