3 thoughts on “Forbes Post, “Social Security, The FICA Tax Cap, And Having Your Cake And Eating It Too”

  1. HI,

    A strongly agree that one big step toward solving the Social Security crisis is removing the top cap on FICA contributions. Another step, perhaps one even less popular with high earners, is to somehow tie Social Security benefits to financial need. I do not know where the cutoff should be, but it is obvious that there is no reason that someone with retirement income of over $1,000,000 needs to receive Social Security benefits.

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  2. as you note in the article the SS benefit formula is already “progressive”, so, in order to save SS (which the vast majority of people would agree is needed), a bit more progressive should work out just fine, especially considering the huge inequality numbers out there, the lower-than-ever-in-decades income tax rate, and the large number of ways the wealthy can add to their wealth in ways unavailable to those without that wealth (every time I glance at Forbes, or the WSJ, etc there are articles on just that topic)…(also, please read the article in the NYT from Sept 5, 2017 “When the Rich Said No to Getting Richer”)…so, yes, the easiest way to Save SS would be to eliminate the cap on FICA “taxes”…maybe it would be a temporary increase as the Baby Boomer bubble would be conveniently dying of over the next few decades…of course, all of this should have been “fixed” a couple of decades ago…also, more and more middle class people are paying taxes on their SS benefits since the formula for determining that hasn’t changed in a quarter of a century, so, in that regard many more middle class/lower middle class people are “paying into the system” more than just from the FICA taxes…

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  3. don’t rush to tax the rich to cover SS projected deficit. that deficit can be closed forever by just raising FICA one tenth percent in any year that projects ten years in advance an actual fall in the Trust Fund below one year’s reserve. This amounts to one dollar per week per year for a few years while incomes are expected to grow a real ten dollars per week per year every year.

    there is no SS crisis, except the Billion Dollar Big Lie that’s being told about it. you don’t want to tax the rich because a big reason for the success of SS for eighty years has been “we paid for it ourselves.” SS already provides a generous supplement to those whose lifetime earnings have been too low for their FICA savings to provide enough at the “normal” return rate. On the other hand those who just haven’t worked enough to qualify for sufficient benefits can get help from SSI an entirely different program that is “welfare.”

    most people (almost everyone) don’t know anything about how social security works except what they hear second hand from the “media” which is almost entirely misinformation.. and that includes Jane.

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