Poll: Tap wealthy on Social Security(end the cap on payroll taxable wages)

[papau]

http://www.usatoday.com/news/washington/2005-02-08-poll-social-security_x.htm

Poll: Tap wealthy on Social Security(end the cap on payroll taxable wages)

By Susan Page, USA TODAY
WASHINGTON — Most Americans are willing to endorse painful steps to ensure Social Security's long-term solvency — steps that nick the rich, that is.

Two-thirds of those surveyed by USA TODAY/CNN/Gallup last weekend say it would be a "good idea" to limit retirement benefits for the wealthy and to subject all wages to payroll taxes. Now, annual earnings above $90,000 aren't taxed. (Related: Poll results)

But some ideas that President Bush said in his State of the Union address were on the table for consideration are rejected by solid majorities. By more than 2 to 1, Americans oppose reducing retirement benefits for those now under age 55. Nearly as many say it's a bad idea to raise the retirement age, and 57% are against reducing benefits for early retirees.

Six in 10 oppose raising Social Security taxes for everybody, a step Bush has ruled out.<snip>

[Occulus]

His SS "plan" isn't going to go through as he would like it

I *was* worried, but not so much about this anymore. Stiff opposition does wonders, no?

NOcial Security. Rinse. Repeat.

[Skittles]

2. the arrogance of these bastards is astounding

they played on the NO ONE OVER AGE 55 will feel it as though those over 55 don't care about their kids and grandchildren. Major f***ing MORONS.

[Rose Siding]

1. Are you listening Democrats?

There it is; an issue idea with support- a progressive policy written out for them by the people...fits in a soundbyte...knocks the stupid bush boondoggle on its ass.

[w4rma]

4. Sen. Kerry campaigned on and for this. (nt)

[tedzbear]

46. Oh he did???

You could have fooled me.

[adigal]

3. Support taxing above 90K

and rolling back the tax cuts for the wealthy. There is NO excuse for those tax cuts. None. And don't get sucked into proposing another plan right now.

Great thread on dailykos.com

http://www.dailykos.com/story/2005/2/8/234834/2241

[doodadem]

5. Tax the rich

I heard an interview with a Social Security expert a few days ago. He used Bill Gates as an example, and said Bill only take $950,000 annual salary (of course not counting stock, etc.) He only pays SS tax on the first $90K. If it was raised to tax $150K, you'd wipe out nearly half of any projected SS shortfall. If it was raised to $200K, you'd solve all problems for many years to come. Very simple.
Now.....$200K is a drop in the bucket to people earning that kind of money.
Secondly, he said when this was all revamped in the Reagan era, it was set up so that for 20 years, the main burden did fall on low and middle income. However, at that 20 year mark, the upper income were supposed to start paying their due (who thought up that plan?!) Nonetheless, it is now their agreed upon time to pay their fair share into the system. Bush is trying to worm out of that agreement, that his hero Reagan set up.

[cthrumatrix]

6. that makes tooo much sense...and no "winfall" to others...

[SammyWinstonJack]

21. Bwahahahahahahahaha!

"Tax the rich." Surely you jest? :crazy: Don't look for that too happen, given the current greed pigs ruling this Country.

[pokercat999]

37. I'm not rich (trust me it's all relative)

but lucky enough to earn more than the SS cap. I support taxing all income with no cap for SS, this was my position when I earned less than a third of what I do today and will still be my position if I'm lucky enough to increase my earnings in the future.

[zann725]

47. Raise the cap...tax the Rich EQUALLY.

n/t

[Briarius]

7. Can't wait to see the propaganda for this!

Looks like the American people have seen the BS in Bush's plan. Now if we can just get the idiots on the hill to see that, his plan will be doa.

[TahitiNut]

8. A top FIT bracket of 49% on wages above that given to POTUS is better.

First of all, the "problem" with Social Security is not one of tax rate or the payroll tax ceiling. The problem is the decimation of the working class -- fewer people working and working for less.

However ...

High income OASDI beneficiaries already contribute to Social Security. Social Security benefits are subject to Federal Income tax. The FIT Revenues on Social Security income are credited to the Social Security Trust Fund as though they're taxed at the beneficiary's highest marginal tax rate.

When the Bushoilinis cut the top marginal FIT rate, they reduced the Trust Fund revenues.

[papau]

9. Great Chart!!! :-)

:-)

[TahitiNut]

26. Remember: Until 1971, the top FIT Marginal Rate was 70% or above

Until 1950, the OASDI payroll tax rate was 1%, and the maximum taxable earnings was $3,000. In 1950, the top marginal FIT rate was 84.4% on earned income over $200,000. In 1952, it was raised to 91.0% where it stayed during the entire Eisenhower (a Republican!) adminstration.

From the time Social Security was enacted, the top Federal Income Tax marginal rate did not fall below 50% until 1987, when the Greedy Oligarchs and Plutocrats (GOP) got the best Congress money could buy.

It never made any "sense" to add a tax on top of a progressive income tax of 50% or above.

If the OASDI wage ceiling is removed, I predict that the wealthy will arrange to pay no OASDI tax whatsoever.

[AP]

10. Here's how the "raise the cap" argument is deceptive:

There's a logic to not taxing people over 90k: they're less likely to need the services for which they're paying, right?

However, it's obvious that social security really doesnt' need to be something that only the people who use it need to pay for it. It's something EVERYONE benefits from. Even if you don't use it, it's a safety net that lets you take a chance. Or, if you're so rich that you're making money off other people's labor, social security is how you help the government take care of the people who work for you and buy your goods and services.

So, why don't we think of social security as something funded out of progressive income tax?

If we rasie the cap to, say 110k, well that sucks if you make 90-110k, because you might never use social security, but now you're paying for it, which sounds OK except that people who make over 110k are still bearing the lighter burden.

We need real progressive income tax rates over the FULL range of income people get in America (that keep getting progressive up into the millions and 10s of millions) and those progressive rates should pay for the social safety net as well as for bombs and federal courts and whatever else the feds spend money on.

[papau]

18. not deceptive unless one feels the progressive structure of SS is hidden

Indeed the poor get more bang for their dollar than do the rich - so one need not go to FIT funding.

Indeed SS is the ideal "flat tax" - once we get rid of the wage cap.

[booksenkatz]

19. There are all kinds of insurance I pay into which I will likely never use

Disability insurance. Long-term care insurance. Fire insurance. Flood insurance. Auto accident insurance. My odds of filing claims on these is quite low. But the odds are still there. And so I pay... hundreds of dollars a month for these types of insurance (in addition to the regular life, health, dental, vision etc. etc. premiums).

And so should everyone pay fully into FICA, period. No one can predict the future, not even for rich folks.

And for the ultra-selfish: let's say Richie Rich does stay rich well into his 90's. Shouldn't he care about whether or not there are hundreds of thousands of broke, homeless individuals camped out on the gates of his fine estate? Create a nation of desperate people, they do desperate things, and often do them to the rich. Richie Rich should consider that carefully.

[AP]

24. Good point.

We should just get rid of the FICA charade and fund SS out of progressive income tax-generated revenue in the general fund.

[TahitiNut]

29. The other "logic" was that, prior to 1987, ...

... they were already paying a marginal income tax rate of 50% and above. (See above.)

[Mystified]

11. This is great news

The message of "Remove the cap" is starting to get out there. The more it's talked about, the more people will hear about it and demand that the cap be lifted. I'd bet most Americans weren't aware the cap existed until the SS reform debate hit the mainstream.

[Nancy Waterman]

15. I would bet if they remove the cap

They could lower the tax of the whole thing to 10% from12%. That way, people on the bottom and their employers would have a tax cut!!

[Mystified]

16. Probably so

I think it's starting to become obvious to the majority of Americans that it is unfair for people making over $87,900 to pay less percentage of their income to SS than those making under $88,000. Everyone making under $88k pays roughly 7.5% of their income to SS, while those making over that see their tax percentage grow ever smaller as their annual income rises.

[Liberty Belle]

12. USA Today Poll: Tap wealthy on Social Security (most Americans agree!)

Poll: Tap wealthy on Social Security

By Susan Page, USA TODAY

WASHINGTON — Most Americans are willing to endorse painful steps to ensure Social Security's long-term solvency — steps that nick the rich, that is.
Two-thirds of those surveyed by USA TODAY/CNN/Gallup last weekend say it would be a "good idea" to limit retirement benefits for the wealthy and to subject all wages to payroll taxes. Now, annual earnings above $90,000 aren't taxed. (Related: Poll results)...

http://www.usatoday.com/news/washington/2005-02-08-poll-social-security_x.htm

Here's a letter I just sent to the editor at USA Today:

I agree that the wealthy should help pay to solve the Social Security crisis. Readers agree that raising the payroll cap and having those paying $90,000 or up foot the bill would be acceptable. However, $90,000 is not a large sum in areas with high costs of living, notably southern California.

A better solution is to reinstate the inheritance tax on estates of $2 million and up. These fortunes were earned off the American economy and the sweat of American workers. Bush has also cut income taxes and changed capital gains tax laws, all benefitting the wealthy. Why should multi-millionaires' and billionaires avoid paying their fair share to society?

[mattclearing]

13. Talk about back-firing.

That's hilarious.

[cthrumatrix]

14. watch MSM igonre "these polls"..Tweety & GE will pass on the peoples

true feelings

[Wright Patman]

17. Tax-exempt foundations

have rendered estate taxes on the truly wealthy (worth hundreds of millions or billions) irrelevant anyhow.

I'd agree with you if you'd go along with taxing all the foundations, trusts and all other ways of avoiding or limiting estate taxation.

But that's not going to happen. Nothing "progressive" ever is, short of a revolution.

Elections are rigged, and even if they weren't, I live amongst people in Texas who are materially poor yet will continue to vote for "Christian" fascism as their "duty to God."

The U.S. is now an oligarchy. Even the conservative NYT columnist David Brooks admits this. We now have a fairly rigid class structure with a rapidly disappearing middle.

[meow2u3]

20. If we tax the rich on FICA, don't we also have to do this?

I heard on C-SPAN this morning that if we raise the FICA salary cap, we also have to raise the benefit cap. Can't we eliminate the salary cap, but also keep the benefits cap as it is, or as a compromise, raise the benefits cap by only a modest amount, like 5%?

[many a good man]

22. Thinking inside the box

Most politicos think if you raise the cap on the payroll tax then you'll have to raise the benefits as well. They think Americans will cry bloody murder because it would be so unfair to take someone's payroll tax and not give them commensurate benefits in return. Polls like this show they are wrong.

Right now payroll tax stops at $90K because benefits stop at the equivalent of $75K. That means right now everybody making more than $75K is going to get the same amount of retirement benefits.

In principle I think SS should stick to the original SS bargain, unless a broad consensus can be reached on reinventing it. I think tax fairness is better addressed in the income (and wealth) tax structure. But if people want to run with this idea then I'm all for it...

[ElaineinIN]

31. The estate tax is still kicking, a little bit anyway

It currently is in effect for all estates in excess of $1.5 million. The exemption goes to $2.0 million, then $3.5 million in 2009. The estate tax is repealed in 2010, but comes back in 2011 with an exemption of $675,000 (I think.. might be $650,00) because of the sunset on the tax legislation.

As for the tax exempt foundation issues.... foundations really are charities and can't pay money out to family membesr except as salary. THere are excessive salary cases, but the IRS is, in reality, cracking down on those bit by bit, although they still exist. The estate tax rules do currently address various types of non exempt trusts--there are lots of loopholes--most of which are actually there on purpose--but all in all, its actually a pretty well designed tax.

[TahitiNut]

39. Social Security is NOT broken!

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x3077984

[shawn703]

23. Sucks for me

Since I'm self-employed and already have to pay both halves of my Social Security tax by myself. I will definitely feel the impact of the cap being lifted. I do have a low 6 figure income, but with my wife not working, the cost of living where I am, and the amount of debt I have, I think my father who earns half my income is better off financially than I am.

I know, cue the violins... I agree with a progressive tax system though - I'll just have to take one for the team.

[NJGeek]

25. I'm in same boat, don't want to take one for the team

Sorry, but I am not only self-employed but I also have employees. This means I pay their half, and some of them make more than 90k. I live in Northern NJ where avg. home prices are 600k+. This would really kill me and my business. I would rather see an elimination of the Bush tax cuts than this, because this hits you twice.

[MadisonProgressive]

27. How about

if businesses continue to pay matching up to 90K, and individuals pay SS tax on 100% of their income?

[shawn703]

30. Personally, that would work better for me

But I know a lot of people here wouldn't like it that way.

[Colorado Blue]

41. I'm sure compromises could be worked out that make

things easier for self-employed people or people with small businesses. But the basic idea is sound, I think.

As far as those tax cuts for the rich - grrrrr.....

[papau]

35. Perhaps this leads to Natl Health that relieves a business of Health cost

:-)

Your business may well come out ahead!

[seventythree]

43. come on

no one cares about the upper income democrat -- except when they want a contribution!!!! It's talk like on this thread which makes me wonder why the hell I am one -- guess I care more about civil rights than my wallet, but as a doctor republican said to me recently (a vegetarian and one who houses and gets surgery for third world women) -- the less the government takes, the more I have to give to my causes and that is why I vote republican.

[TahitiNut]

28. Would you rather pay Income Tax at 1960 rates?

The top marginal FIT rate in 1960 was 91% on all income above $200,000. Guess what? People still managed to buy cars, houses, and college educations for their kids.

[shawn703]

32. Absolutely

And comparing the value of $200,000 in 1960 to dollars in 2003 (the only calculator on the Internet I could find at http://www.eh.net/hmit/compare/) gives me:

In 2003, $200,000.00 from 1960 is worth:
$1,243,299.44 using the Consumer Price Index
$1,004,182.51 using the GDP deflator
$1,522,514.78 using the unskilled wage
$2,595,451.97 using the GDP per capita
$4,173,214.29 using the relative share of GDP

And going backwards:

In 1960, $200,000.00 from 2003 is worth:
$32,172.46 using the Consumer Price Index
$39,833.40 using the GDP deflator
$26,272.32 using the unskilled wage
$15,411.57 using the GDP per capita
$9,584.94 using the relative share of GDP

And if I put in my income of $112,000 to compare with 1960:

$18,016.58 using the Consumer Price Index
$22,306.70 using the GDP deflator
$14,712.50 using the unskilled wage
$8,630.48 using the GDP per capita
$5,367.57 using the relative share of GDP

So if I take the highest of those numbers - $22,306.70 - and assumed that would be my income in 1960, I don't think the 91% rate would have affected me. Go ahead and tax income over $1,000,000 a year at 91%, you're right - people would still survive.

[TahitiNut]

33. Here's the Tax Table for 1954-1963 (Married Filing Jointly)

[mulethree]

40. Yes it blows - you pay the highest taxes

Problem is that you're paying a higher total tax load than almost anyone else.

If you make about $150,000 then you've paid the full FICA on half of it, pay medicare 3% on all of it, and pay income tax on basically all your income - and at 28% rate. You end up paying around 36% in federal taxes - though mortgage interest, 401/IRA and state/local tax deductions can cut that down. Thats just the federal taxes.

People who earn more, don't pay more SSA taxes. They typically get more of their income from investments and less from wages - so they don't pay the 3% medicare tax on most of their income. They get higher tax rates, but an increasing share of their income is capital gains and dividends - taxed at 15% max - they pay the higher income tax rate on a smaller and smaller proportion of their income as their incomes go up.

At 007K ( top of 10% bracket ) you have an overall rate of 22.9%
At 028K ( top of 15% bracket ) you have an overall rate of 27.8%
At 068K ( top of 25% bracket ) you have an overall rate of 35.8% <<
At 146K ( top of 28% bracket ) you have an overall rate of 36.0% <<
At 319K ( top of 33% bracket ) you have an overall rate of 31.8%
At 695K (linear - 35% bracket) you have an overall rate of 28.7%
At 1516K(linear - 35% bracket) you have an overall rate of 25.4%
At 3304K(linear - 35% bracket) you have an overall rate of 24.3%
At 7204K(linear - 35% bracket) you have an overall rate of 22.9%
At 15mm (linear - 35% bracket) you have an overall rate of 20.2%

These being AGI's assuming standard deductions. They are also based on averages - you probably don't collect 74% of your income from wages AND 11% from pensions and SSA - at the same during your life. This also includes the whole cost (12.3% and 3%) of FICA - not just the employee's share.

The point I'm trying to make is that wealthy can complain about their tax rates, but pay a 15% tax on the majority of their income - Dividends and Gains. They effectively don't pay payroll taxes, medicare taxes and increasingly - income taxes. And pay a much lower total tax rate than

People propose raising the FICA income cap saying the rich should pay more into SSA, but that would push the $146K guy's taxes from 36% to 42% while only making a teeny dent on those making millions a year. The answer might be a FICA of say 4% on earnings beyond 87K, but to apply to ALL income, not just wages.

[amandabeech]

42. I would favor extending the Medicare tax to income from

all investments as well, with a smallish amount of investment income exclusion for seniors.

[indepat]

34. Yes, the most affluent could be asked to share in resolving a societial

problem, but this is not now nor will ever be in the Repugs' game plan for everything they do tax-wise is to add regressivity to the tax scheme. Let the poor eat cake.

[against all enemies]

36. Looking at the poll results, Americans have no idea how good SS

is funded for the next 50 years. A little truth about the fund would help Americans make up their minds as to how minor the fixes in SS have to be. Of course a little truth on Iraq's WMDs would have helped Americans make a decision too. No truth from Bush, EVER.

[TahitiNut]

38. Correct. Social Security is NOT broken!

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x3077984

[mulethree]

44. It's 8% 'broken'

In 1983 they tried to fix it for 75 years. The current projections
- 2052 - would mean they actually fixed it for 69 years; though the
projections will keep changing.

(75-69 = 6)/75 = 8% thats 21.5/20 vision at 22 years into the
future - damn respectable.

It would be a lot closer if the trust fund investments weren't
buying 4% and 5% bonds - 1983 rates were 10% and I think they expected them to go down to 6% & 7% but not 4%.

I think before we try to fix it out to 75 years again, that we ought to get a serious disclosure of the economic projections they use to project the variables. The SSA figures are downright gloomy and even the CBO numbers are well below any historical growths.

Paint the picture - growth, revenues, deficits for 75 or even 50 years, and the 8% problem in SSA pales compared to the budget deficit, debt servicing, medical inflation, energy cost effects.
- Why does Chimpy expect 100 Billion a year in trust fund redemptions to be such a huge problem in 2020?
- How does he expect people to get returns more than 3% over inflation when current yields of 1% or 0% over inflation are part of the problem?
- Where do they expect interest rates to be in 10 and 20 years?
- Don't they take into consideration the future cost of rolling over bonds before they decide to run a deficit?

[applegrove]

45. Don't you get it? You cannot tap the wealthy because tax reform

Don't you get it? You cannot tap the wealthy because tax reform will do away with all income taxes & inheritance taxes. How can you "tap" the rich when YOU DON'T KNOW WHO THEY ARE?