The original political compromise to get Social Security passed was to fund it through a separate tax, in which the amount of taxed earnings is also the basis for calculating benefits. Each worker feels as if he pays roughly for his own benefits (whether that mathematically works out or not), which is part of why it’s so popular.
If you uncap the tax but leave the benefits capped, you defeat the point of this system—at that point it makes more sense to abolish Social Security tax altogether and just fund it from general revenue.
Personally I have very little trust of the government to sensibly manage and not squander the money and giving them more won’t fix that. I would much prefer instead to use the money for a self managed pension I actually own rather than hoping the government wont waste or misuse it and I’ll actually get a fair amount back. Thus I am against things that will send more money that way in general.
Particularly seeing the current administration I dont see why anyone expects the government to make sensible financial decisions or should be trusted with more cash. It only takes one bad administration for it all to be gone or reallocated to whatever they want.
There’s other arguments as well… namely that uncapping the tax would lead to uncapping the payments as well. I’m not making a stand whether pro or against here (I’m actually pro uncapping as I would assume most of reddit is).
What would really help it is uncapping the tax and capping the distributions. So create solvency truly the rich have
To be taxed at an uncapped rate then have a capped distribution – effectively a wealth transfer. That’s really what your
After. Uncapping tax then paying 48k a month to some billionaire who was taxed on all his income doesn’t really fix the system… taxing a billionaires income
To the first couple million then maxing his benefits at 5400 or so a month or whatever it is like a “normal” (this is still an insane benefit for most) person is the answer. Now whether that’s fair is in the eye of the beholder.
Medicare taxes are applied to all earnings. Social Security should be the same. Simple fair and secures the future for at minimum every living American for their lifetime.
Now taxing dividends rents and wealth. That’s where the real money is. Complicated so it’s easy for the rich to slide it past the masses.
It’s not as much as much as a quick and easy solution as one would think at first glance.
Social security tax is capped because benefits are capped. You get bigger social security checks if you were a higher earner through much of your working life because you technically contributed more. If you uncap it, then the rich will get bigger government benefits when they probably don’t need it, and social security still wouldn’t be solvent.
Even if you capped benefits but not the tax, it would only add a few more years before it becomes deficit spending again because as it turns, there aren’t actually that many people who earn over $176,000 a year. I can’t find the article but I think it was calculated to add $100,000,000,000 to the social security budget which isn’t anything to scoff at but Social Security’s yearly budget is well over a trillion dollars so that kinda illustrates it doesn’t make the dent one would expect.
So basically, it wouldn’t actually solve the problem unless the formula for offering benefits was redone, not just capped like they currently are. That’s a bit difficult politically since social security is designed to feel like pension, which is why you get more money, the more social security tax you paid. Changing it so the tax is uncapped and wealthier retirees don’t get as generous of checks would turn it into welfare (which it honestly already is but whatever) and we all know how some people in this country feel about that…
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Can you explain why you would want this?
The very wealthy do not want it because it will increase their FICA tax on themselves and their businesses FICA tax.
And the very wealthy control our politicians.
The original political compromise to get Social Security passed was to fund it through a separate tax, in which the amount of taxed earnings is also the basis for calculating benefits. Each worker feels as if he pays roughly for his own benefits (whether that mathematically works out or not), which is part of why it’s so popular.
If you uncap the tax but leave the benefits capped, you defeat the point of this system—at that point it makes more sense to abolish Social Security tax altogether and just fund it from general revenue.
Greed
Rich people don’t like to pay taxes
Personally I have very little trust of the government to sensibly manage and not squander the money and giving them more won’t fix that. I would much prefer instead to use the money for a self managed pension I actually own rather than hoping the government wont waste or misuse it and I’ll actually get a fair amount back. Thus I am against things that will send more money that way in general.
Particularly seeing the current administration I dont see why anyone expects the government to make sensible financial decisions or should be trusted with more cash. It only takes one bad administration for it all to be gone or reallocated to whatever they want.
The benefits (social security payments) are capped, the buy-in should be capped also.
There’s other arguments as well… namely that uncapping the tax would lead to uncapping the payments as well. I’m not making a stand whether pro or against here (I’m actually pro uncapping as I would assume most of reddit is).
What would really help it is uncapping the tax and capping the distributions. So create solvency truly the rich have
To be taxed at an uncapped rate then have a capped distribution – effectively a wealth transfer. That’s really what your
After. Uncapping tax then paying 48k a month to some billionaire who was taxed on all his income doesn’t really fix the system… taxing a billionaires income
To the first couple million then maxing his benefits at 5400 or so a month or whatever it is like a “normal” (this is still an insane benefit for most) person is the answer. Now whether that’s fair is in the eye of the beholder.
Medicare taxes are applied to all earnings. Social Security should be the same. Simple fair and secures the future for at minimum every living American for their lifetime.
Now taxing dividends rents and wealth. That’s where the real money is. Complicated so it’s easy for the rich to slide it past the masses.
Time to charge payroll taxes on the capital wealthy individuals
You have capital gains. Instead of just paying flat 15%
Pay payroll taxes like everyone else on the first 250k
Then 15% on the rest.
Make it fair.
The wealthy primarily get their wealth from capital gains which are not subject to social security.
I’m not an expert, but according to some economists
https://www.city-journal.org/article/raising-the-tax-cap-cannot-save-social-security
It’s not as much as much as a quick and easy solution as one would think at first glance.
Social security tax is capped because benefits are capped. You get bigger social security checks if you were a higher earner through much of your working life because you technically contributed more. If you uncap it, then the rich will get bigger government benefits when they probably don’t need it, and social security still wouldn’t be solvent.
Even if you capped benefits but not the tax, it would only add a few more years before it becomes deficit spending again because as it turns, there aren’t actually that many people who earn over $176,000 a year. I can’t find the article but I think it was calculated to add $100,000,000,000 to the social security budget which isn’t anything to scoff at but Social Security’s yearly budget is well over a trillion dollars so that kinda illustrates it doesn’t make the dent one would expect.
So basically, it wouldn’t actually solve the problem unless the formula for offering benefits was redone, not just capped like they currently are. That’s a bit difficult politically since social security is designed to feel like pension, which is why you get more money, the more social security tax you paid. Changing it so the tax is uncapped and wealthier retirees don’t get as generous of checks would turn it into welfare (which it honestly already is but whatever) and we all know how some people in this country feel about that…