Solution: No wage cap is equiv to 14.82 tax instead of 12.4 tax for OASDI

[papau]

No wage cap is equiv to 14.82 tax instead of 12.4 tax for OASDI

http://www.ssa.gov/OACT/TR/TR04/II_cyoper.html#wp89438

From the detailed SSA reports we find that OASDI's wage capped (at $90,000 in 2005) 12.4% (6.2 to employee and 6.2% to employer) produced about $543B in 2001.

And HI's no wage cap 2.9% produced about $151B for 2001.

Therefore removing the wage cap would have increased the tax take for OASDI by 20%.

The Trustee's report says that the tax shortfall over 75 years averages 1.92% (this is actually much too high as it is inflated by not reflecting the excess assets and their interest that would occur should the tax increase be passed now when Soc Security is over funded that Bush uses the Soc Sec surplus monies to finance his tax cuts for the rich). In any case a 20% increase on the 12.4% amounts to 2.48% additional to the tax rate (greater than 1.92%) - meaning the overall tax rate would have to come down because we would be so over funded.

[damntexdem]

1. You made a mistake:

using logic -- the Bushista's plans do not rely on logic.

[REACTIVATED IN CT]

2. Wage Caps

Tue problem with this simple, logical solution is that it would cost Businesses ( *'s base) money since they have to match what is deducted from the employee's paychecks. Same problem with raising the tax rate.

Another factor that diminshes the amounts that get contributed are the Section 125 Cafeteria Plans. Anyone see any info on how much the SS does not receive each year due to those Plans?