The Fix For Social Security’s Finances Would Affect Just 5.6 Percent Of Workers

[xchrom]

http://thinkprogress.org/economy/2014/04/30/3432696/social-security-tax-cap-2/



One way to fix Social Security’s long-term financing is to stop exempting high-earning workers from Social Security taxes on the majority of their income. Thanks to new research from the Center for Economic and Policy Research (CEPR), we now know just who would be affected by the elimination of that exemption: less than 6 percent of all workers.

Current tax laws exempt every dollar a person earns above $117,000 from payroll taxes to finance Social Security. That cap means that the 900 richest people in the country stopped paying into the program after the first two days of 2014. Those most able to chip into the country’s retirement security system won’t do so again until the calendar flips to 2015. As CEPR notes, the cap means that “workers who make $117,000 or less per year pay a higher Social Security payroll tax rate than those who make more.”

Eliminating the cap would almost entirely close Social Security’s funding gap for the next 75 years. Roughly just one in every 18 workers would see their tax burden increase, according to CEPR’s figures. One in 36 working women and one in 50 black and latino workers would pay more under that proposal, compared to about one in 12 men, one in 14 white people, and one white man out of every 10.

An alternative proposal to outright eliminate the cap is to continue exempting income between $117,000 and $250,000 from the tax, but apply Social Security taxes to all income above a quarter-million dollars per year. Such an approach slashes the proportion of the workforce affected even further: just 1.4 percent of workers would pay more, with just one in 33 white men and one in 250 black people seeing their tax burdens rise. The mixed approach would close the long-term funding gap in Social Security by about 80 percent.

[Adrahil]

1. I'd be affected by lifting the cap...

And I support doing it.

[FreakinDJ]

4. Ditto

Safer then the Casino Stock Market we dump our 401K into

[IronLionZion]

7. I hope to be some day

and I support lifting the cap.

[Warren Stupidity]

2. It ain't broke.

All proposals to fix ss are dubious. It is not broken.

[exboyfil]

3. Even with the most optimistic of projections

we are seeing out year inability to pay benefits once the trust fund is depleted.

Currently the way Social Security is structured those individuals who earn most of their salary need the middle to top end of the third benefit multiplier bracket are carrying a disproportionate share of the S.S. system. On fairness alone the cap should be lifted for S.S. Also consideration should be made regarding "passive" investment income - that should be subject to S.S. as well.

[Warren Stupidity]

5. 2031.

I suggest a tax increase if and when the window is 5 years, not more than 15.

[exboyfil]

6. How about an alternative proposal

I agree with you on the dubiousness of further increasing the Trust Fund, but what about taxing the income now and sliding the percentage withholding down for everyone. The withholdings would slide up in the future to keep S.S. fully funded up to current maximum withholding. After that we could discuss other alternatives. This way the fix is already in place and we give lower income tax payers a little break right now.

[IronLionZion]

8. Medicare needs more funding

and has no wage cap.