The Social Security Fix Nobody Wants to Talk About | A small tax increase would make the essential national retirement program secure for decades, our columnist says, but lawmakers would have to act
The Social Security Fix Nobody Wants to Talk About | A small tax increase would make the essential national retirement program secure for decades, our columnist says, but lawmakers would have to act
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Ah yes, just increase the tax on working people. So simple. Don’t look too closely at the yearly cap that prevents rich people who will never need it from contributing meaningfully. Let’s be careful to not consider a simple progressive tax that would easily correct the issue by putting an unnoticeable tax increase on the very people who are responsible for making sure normal Americans can’t fund their own retirements in the first place.
The article explicitly talks about lifting that cap:
Raising the cap that way — taxing affluent people more and everyone else less — would reduce the 3.5-point tax increase needed to fully fund Social Security to as little as 2.45 points, the Social Security system estimated.
Still, raising the tax nearly 2.5% on working people is bullshit. Hey guys, we know inflation is hitting hard and most of you haven't had a meaningful raise...ever but how about if we lower your current and all future earning potential by 1/40th?
Wouldn't it be more like a 1.25% increase for most people since that part of the payroll tax is split half and half between employers and employees? I might be reading it wrong but sounds like they're proposing raising the entire 12.8% or whatever it is payroll tax that much. So it'd go from like 6.4% to like 7.7%.
This is the way
This is the correct answer. They need to remove the cap before doing anything else.
Wouldn't removing the cap just delay the issue? You get more out of SS the more you put in. The cap exists because there is a maximum amount you can get out of SS. If they remove the input cap, then that implies they'd remove the output cap too. In which case, the immediate result is a lot more money flowing into SS, but over time, a whole lot more money will start flowing out, too.
Nah you just make it needs based. Rich ppl don't get a check from ss
Eh. One may be rich today and poor tomorrow.
I think Social Security income is taxed above a certain limit as well.
Needs based support is definitely a good thing, but that's not what SS is. That's closer to welfare and would require a much deeper look into people's financial situation than a retirement program like SS.
I could make $500k/yr while working then experience some disaster/disability that takes it all away. Conversely, I could be homeless then suddenly come into massive wealth later in my life. Or, I could live a lavish life because my parents/SO are extremely wealthy, yet I am dirt poor on paper. SS is not designed for these situations, and attempting to modify it to fit them is probably a worse idea than bolstering other entitlement programs that are designed to fill in the gaps.