9 thoughts on “Forbes post, “So, Hey, Why Not Just Remove The Social Security Earnings Cap?”

  1. Well if you don’t want to raise the cap how about making the govt pay back the 3 trillion it has borrowed from social security?


  2. In addition to removing the SS earnings cap why not exclude those individuals who earn over 100k a year from receiving any social Security insurance?


  3. invest in large marijuana grows and reschedule the drug and the tax revenues should be enough to continue social security as well as fund school systems nation wide. Maybe buy MMJ from mexico and let that country become financially independant and flourish.


  4. This is a proposal to make social security solvent. Your argument against the proposal is that if we come up with the money to make social security solvent, we might want to spend the money on different things instead?

    When you go to the grocery store, do you stand in an aisle for 15 minutes, blank-faced, before you realize that you could be spending that time at a doctor, or watching a movie, or writing asinine propaganda to support the interests of the wealthy, before you leave without making a single purchase?


  5. We’ve lost our main wage earners. Now we widows have to support our families on one salary, making sure we don’t go over 17k or we are penalized. They want welfare people to work; we work and are penalized by having to give back what we worked for an need to raise a family, on top of our husbands being dead.


  6. I think a lot of people miss the fact that the majority of Americans will always be taxed at 100%. I am not going to even talk about Trumps tax reform and SALT deductions right now, because that’s fair. There are a lot of people who choose to live in cities, and make a lot higher salary, which just happens to give them a tax cut because they make over the cap. Honestly, it should be removed, or either stop collecting social security and give everyone a 401k account of their own. Also, a lot of people will realize the scam SS is, as you pay federal tax dollars on social security like it is yours. As my democratic Aunt found out when her ex passed away, not one dime went to their son who was in college. NADA, it is a social pool of money, and you are taxed on it not only as you earn it, but also as you collect it now, thanks Reagan, and Clinton!


  7. Your primary argument seems to be that removing the cap would compel the very rich to subsidize lower income wage earners. Middle class income earners are already clearly subsidizing low income earners; it is just cleverly hidden.

    Low income retirees get a benefit equal to 90% of their average indexed monthly pre-retirement income. Above indexed earnings of $896/month, that rate drops steadily up to total indexed earnings of $5399, where the retirement benefit drops to just 42% of the pre-retirement earnings. After $5399 to the maximum (currently $10,725/mo), the percentage drops from the 42% level down to just 28% of their pre-retirement income.

    Those at or near the maximum Social Security cap are clearly progressively subsidizing those toward the lower end, The percentage of payroll tax paid is level at 6.2% across all income levels…up to the cap, where it goes to zero. As a result, in the Social Security arena the higher the income the higher the subsidy is, until you reach the income cap of $128,700. The subsidy is subtle and cleverly hidden, but it is clearly there.

    However, from the cap on the percentage of income paid to subsidize lower-income workers’ retirement drops from 6.2% toward 0%, depending on how high the income goes. For example, an individual making $1,000,000/year would only pay 0.8% (6.2% of the first $128,700, or a piddling $7.980 [to them] ) of their income into SSA…but still becomes eligible for exactly the same benefit at retirement as the stiff who was consistently at the cap and dutifully paid 6.2% for 30 years.
    SSA is essentially a flat income tax solely dedicated to paying out retirement and disability benefits. That is not a bad thing; old and disabled people need income. Other countries recognize this and provide it in some way. How they pay for these benefits is irrelevant. SSA is the imperfect system we have in the US. However that taxation algorithm allows no deductions of any kind on incomes up to $128,700, and a 100% exemption on all income above that amount.

    If you cannot see how blatantly inequitable this system is you are blind.


  8. Hi Jane. Interesting discussion. I have always wondered why unearned income, most notably meney made in the stock market is not subject to FICA. Some folks get most of their income that way. And on a related topic, i wonder why money made in stocks should be taxed at a lower rate than earned income. Now I have heard the rationale being that people “taking risks” by investing in the market should be rewarded and incentivized by paying a low tax rate. But i would contend that starting one’s own business involves taking a risk, just as much. If i start a restaurant or a clothing store or a software company, i run the real risk of going out of business and losing everything yet, i am paying a higher tax than the hedge fund manager or the big stockholder.And even if i work for a company, in today’s economy. there is a real risk that i can be laid off or my company will go under. Thanks for listening!


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