There's Nothing Wrong with Social Security that Taxing the Rich Fairly Wouldn't Fix

[Joanne98]

By Dave Lindorff

New York Timescolumnist and economist Paul Krugman, in his column today, is right to expose the attacks on Social Security as being the work of right-wing ideologues eager to destroy a government program that works, backed by cowardly Democrats who want to show their fiscal "responsibility" by getting tough with future pensioners.

But he doesn't go the extra step to point out that this program, founded 75 years ago as a cornerstone of Franklin Roosevelt's New Deal, could be much more fair and even generous to elderly and disabled retirees, and also placed on a much sounder economic footing, by a few simple reforms that would not cost most people a penny, or require hard working folks to work one day longer before retiring.

Thereisa problem facing Social Security, which Krugman doesn't mention. The Nobel economist is correct that the system has built up a huge multi-trillion-dollar surplus over the years. And he is correct in noting that this surplus--the Trust Fund--is big enough to fund the system probably indefinitely, even during the huge bulge in retirement that is starting now that the Baby Boomer generation is hitting retirement age. What he fails to mention is that the Trust Fund has all been stolen (okay, technically borrowed) by the federal government to fund its own annual deficits, and given the national attitude towards taxes, it will never be repaid. That's why the right is able to create a panic by falsely claiming thatSocial Security is going to go "bankrupt" when current workers' Social Security taxes can no longer pay for the benefits of current retirees.

But there is a simple solution to even this deception, which is to eliminate the cap on income which is subject to the Social Security tax.

http://www.opednews.com/articles/There-s-Nothing-Wrong-with-by-Dave-Lindorff-100816-709.html

[old mark]

1. EXACTLY! Can you send a copy of this to the White House? nt

[yurbud]

29. everyone can:

http://www.whitehouse.gov/contact

[izquierdista]

2. Go even further

I'd make it a truly progressive tax (for a progressive program) -- I'd exempt FICA tax for the first 12 weeks of earnings at minimum wage. (Twelve weeks at 40 hours = 480 hours @7.25/hour or about $3500) I'd even count it toward their work history, even though that quarter might be taxed at zero. If you think about it, there are a lot of students and part-time workers out there that could use what's currently withheld from their first $3500 of earnings.

[BeFree]

3. Very good, Joanne

It has been stolen. There's no money there in the bank.

Lets see:::

Someone who gets 1,000 a month, can be said to have 5 workers who pay 200 a month in SS taxes, supporting them.

And one person paying 1,000 a month does support one person.

So one person, really rich, paying a million a month, can support 100 poor little old ladies who would die if it wasn't for Social Security?

[glowing]

4. Exactly, and they wouldn't have to think about being charitable.. Its already a given.

[BeFree]

7. But

As it is right now, the really rich person supports just one little old lady a month.

They could easily support 100.

A billionaire supports just one little old lady, and so does someone who makes just 100 K a year.

There is no equality there.

There is no justice for all to be found in that math.

[glowing]

26. I think that the 108,000.00 line should be lifted.. Pay for the entire portion of earned income.

There would be more than plenty to go around. Tax the wealthy a little more and we could have medicare for all and a sane system of delivering health care to everyone.

[RUMMYisFROSTED]

8. Note: a 1000 little old ladies, not a 100 nt

[BeFree]

19. Thanks... it is early for doing math.

Imagine that, 1,000 people taken care of for the cost of one little old jet.

What is more important? 1,000 people or one jet?

[Warren Stupidity]

5. There is nothing wrong with social security at all. MANUFACTURED CRISIS.

Fully funded for at lest the next 25 years. WHAT CRISIS?

[glitch]

6. The crisis is the people who looted the fund don't want to repay it.

SS is only not in crisis if they are actually made to pay back what they 'borrowed'.

The terms of their default are being negotiated in the media right now. Here's our better idea: pay back what was borrowed by letting the Bush tax cuts (for the top 2%) lapse. And stop spending trillions in 'borrowed' money on aggressive wars and massive occupations.
Bring the TROOPS AND THE MONEY home.
'Problem' solved.

[Skink]

11. The looted money was stolen in the form of tax cuts.

they made that deal in 83 thinking they would never have to p;ay it back.

[Warren Stupidity]

14. oh poor them

too bad the constitution requires them to pay back t-bills.

[glitch]

15. Wouldn't be the first unconstitutional scam they've gotten away with.

It's just a piece of paper anyway. :eyes:

[mopinko]

9. fica taxes are not taxes. they are insurance premiums. the cap

was put there because the payments are capped. if you want rich people to cough up more money, are you going to continue the program as an insurance pool? are you going to let bill gates get a $10,000 check every month when he is 65? if the answer to that is no, then you have just turned the program from insurance that we all pay for and all own into a welfare.
it is not insurance any more when there is one equation for one set of beneficiaries and another one for the rest. people take pride in social security. don't turn it into a hand out. it is not necessary.
an increase in the cap, as happens every year is fine. it helps keep up with long term inflation. eliminating it turns it into bill gates bails out the cute little seniors.

[BeFree]

10. bill gates bails out the cute little seniors.

What's wrong with that?

How many 'cute little seniors' were crushed on the way to bill gates becoming a billionaire?

[Skink]

12. what I don't get is why is Gates would be entitled to a bigger payout...

than someone who works ten years longer but worked at a place that paid half what they payed a generation before.

[mopinko]

16. everybody gets paid based on what they put in.

period.

[eridani]

30. That isn't true. Lower income peoples' basic benefit calculation

--gives them more income proportional to what they put in.

[Sam1]

13. Most likely very few - on the other hand quite a few were crushed

on the way of the banksters and hedge fund managers becoming billionaires. Bill and his company actually created something of value. The banksters created a huge bubble which collapsed. The only thing that was not phony was the huge bonuses that they paid each other.

[unblock]

21. bill and his company AGGREGATED many things of value and TOOK the money for themselves

they created very little. much value was created by many other companies. bill and his gang's talent was figuring out how to make sure that the money from all these advances wound up in their pockets.

as a result of his way of doing things, windows grew as a virtual monopoly, with much of the applications market going to microsoft as well, simply because they owned dos.

creativity and advances were stiffled because of their approach, and people were deprived of choices as well, and people were paying more than they needed to as well because of their monopolistic influence.


were it not for microsoft, we would still have had operating systems, applications and many choices and low prices. microsoft's contribution AT BEST was organizing it an putting it all in one package. at best they organized the emerging technologies. at worst they destroyed what could have been.

[mopinko]

17. all the cute little seniors i know want to stand on their cute little feet.

and don't want to fill out forms and shuffle around agencies to see if they can sweep a few bread crumbs into their baskets. they want their own earning safely invested.

[BeFree]

18. too late

They, for the most part, voted for republicans like nixon and reagan and then bushies and sat on their asses while SS was stolen.

We must have pity on the dumb asses and make sure they don't die of something stupid, like we are doing.

[Warren Stupidity]

20. Bill does not get one dime more than everyone else who paid at the top.

That is part of the genius of the system. The cap is basically at or near the line that constitutes upper middle class. Billionaires get no more and no less than the average suburban peasant.

[unblock]

23. are you saying cap vs. no cap matters, but cap level doesn't? so set it a $10,000,000

ok, let's keep the cap but raise it to $10,000,000. as long as there's a cap it's still insurance not a bail out, right?

or is there something magical about the current cap level, which apparently doesn't bring in enough funding?

[fasttense]

25. A cap on pay-in merely puts the burden of the "premiums" on the poor and middle class.

There has always been a pay-out cap on Social Security. There is a maximum limit on how much you can draw out of Social Security but no limit on how much you must pay in. (And yet all insurance works like this, This really bothered the Robber Barons so they fronted their man Raygun to change it.)

When you buy term insurance, you don't get more money back the more you put in. If I die today, my spouse will get the same amount of money today as he would if I die 10 years from now, yet I will have put in much more money, 10 years from now. You get a standardized rate back. The insurance corporation can cover me from the moment I start paying in because other people are paying in and can cover it.

I have household insurance. If I get robbed today, they will cover up to half a million dollars in loss. Yet if I get robbed 5 years from now, I will have put in more money for the same return. That's because other people are paying in too.

Most people when they start working don't put a lot into Social Security because they don't make a lot. It is usually only after years and years of working, that most people make larger amounts of money. Yet, if they were disabled, widowed or orphaned they were still covered by Social Security no matter how many years they were putting into Social Security. The cap on pay-out is required to keep Gates from draining it all out, and leaving nothing for those who need to draw out sooner while paying less in.

If Gates gets to pull out $100,000 a year, what happens to folks who are disabled early in life? Too bad, tough luck, oh well? Does Gates really need that money more than the orphan?

Yet my insurance company will payout to fix my car from the moment I start paying premiums, not five years after I start paying premiums. The only reason insurance can cover us, is because of the other people paying into the pool.

[ProgressiveProfessor]

22. Those who call for "simple solutions" to complex problems are simpletons

This one is no different. Social Security withholding is based on W2 income. Most of the really rich have little to no W2 income.

[BeFree]

24. Right

And most of the rich pay little income taxes at all.

They are special.

[ProgressiveProfessor]

27. A lot of this goes back to what does "rich" mean

Assets, income, asset based income...

The truly rich IMO are those living mostly off of asset based income, not W-2 income, and they do pay taxes via that income stream, though due to the incessant tinkering with the tax laws, its less than many would expect.

As for tax avoidance, as long as we maintain such a bloated tax code, it is to be expected. Every bit of social engineering in the tax code is an available exploit for someone to use to legally avoid taxes. While I am not advocating for a Forbes like regressive approach, something clearly has to be done.

[BeFree]

28. Right

And even more it goes back to what poor means.

Basically the system is that if you are poor and can't work, Social Security takes minimal care of you. Thank God.

And if you're rich, the system really takes care of you. Defends you, keeps trade open, has a court system set up to air your grievances, etc.

The rich people have set up the system to take care of the rich. And a few of them have set up a part of the system to take care of some poor. Y'know, them welfare queens.

Guess that makes the rich welfare Kings?