A Sensible Solution to Social Security Funding

"Affluence creates poverty."  ~Marshall McLuhan
"Affluence creates poverty." ~Marshall McLuhan

After years of paying FICA taxes, and mandatory income tax on Social Security earnings, our seniors are once again under attack by Obama’s Financial Reformers. President Obama (by executive order) selected the individuals recommending a cut to Social Security, Medicare and Medicaid benefits. If the cut is made, it will inflate the existing 43.6 million at poverty level by millions more. This callous indifference exhibits how morally deficient our government representatives and president have become!

The group’s agenda is to raid Social Security and use the money to support our current military conflict, and to reduce the deficit that our self-serving leaders have created through bail outs. Yet, they are fighting to extend Bushe's tax cuts for the wealthy. The justification of this crime against the elderly, and future generations, will be blamed on "necessity” in conjunction with their infamous companion “fear”. Don’t fall for it!

EPI economist Monique Morrissey has recommended a fair tax approach which would reinforce our Social Security program. Her idea is to slowly raise the existing tax cap by 2% a year on those making $106,800.00 or more until the amount covers 90 percent of all income. This would eliminate a third of Social Security’s projected shortfall. Is there a payoff for the wealthy here---of course, they will receive higher benefit payments upon retirement.

Here’s an FYI; FICA tax is capped at $106,800.00. Once you’ve reached that cap, your contribution in Social Security taxes has been $6,622.00. Earnings beyond this amount will be excluded from further FICA tax. However, based on the capped wage, the monthly retirement draw will be approximately $2,300.00. I believe it’s time for an equitable adjustment in this area don’t you?

Morrissey determined that incomes among top wage earners have grown at a faster pace than wage earners below the cap. In fact, under the current cap 16% of earnings remain untaxed by Social Security. Naturally, it’s a bonus for the rich but a huge loss for Social Security. She also suggested that employers should be required to pay their fair share of FICA tax on each employee’s “full” salary. These two changes alone will balance and strengthen Social Security’s base.

In my opinion, there is only one reason our leaders would discount Morrissey’s solution and that is to protect themselves, their benefactors and other wealthy individuals who have never paid their fair share into the Social Security program. The tax structure in our country has always applied a hands-off approach concerning the rich while the middle class carries the tax burden.

Due to the outsourcing of jobs (encouraged by our president and congressional leaders) we are no longer a major industrial and manufacturing nation and our middle class is quickly vanishing. So, I think our government owes us one; I say, “Right on Ms. Morrissey, I like the idea of the rich paying their fair share of Social Security taxes. This sensible solution earns you two thumbs up and a five star rating from me!”

"If the misery of the poor be caused not by the laws of nature, but by our institutions, great is our sin.” ~Charles Darwin

Comments 5 comments

Larry Wall 5 years ago

All are good points. At age 60 I was laid off from the job I held for 22 years. That put be in the retirement "twilight zone." I cannot draw Social Security. I cannot get on Medicare. I am too qualified for some jobs. For others I am too old. For some I have the experience but not the credentials...

Social Security is basically the original 401k. I contribute 6.5 percent and the employer contributes 6.5 percent. As noted, Congress has allowed money to be siphoned from Social Security for other purposes. That is where Social Security differs from the 401k. That has to stop. The cap on earnings covered by Social Security has to be raised. People who retire and work should be required to pay Social Security taxes on their income, but not on their benefits, regardless of whether they retire at 62 or 66 or whatever age bracket covers you.

It all boils down to one of my basic themes and that is our Government has got to learn to live within its means. We need to reduce our borrowing as much as possible. We need to encourage Americans to invest in the country through better returns on Treasury notes and Savings Bonds. We need to stop the Pork Barrel spending and entitlements in Congress and finally, we need for the Congressional rules regarding how legislation is handled to be changed. Chairmen and party leaders have too much authority. The process of dual referrals, markup, sub committees, full committees, etc. is overly complicated and just creates a smokes screen, hiding from the public how the money is really spent. Major reform is needed. Finding the people with the ability and fire to be elected and initiate those reforms before falling victim to the Good Old Boy system will be the most difficult task. It is impossible to clean house in Congress because of staggered terms and there is little chance of establishing term limits. Experience may be good, but the experience that is running the Congress today does not measure up to the experienced lawmakers who served 20 or more years prior to the current crop of Legislators being elected. Change must start with the Congress. They make the laws. They adopt the budget. They spend the money. A strong Congress can accomplished a lot. A Congress divided by political factions and more concern with gaining seniority and better committee assignments will never solve the problem.


OpinionDuck profile image

OpinionDuck 5 years ago

nancy

Nice hub.

I would add that the employer pays the same as the employee, and that includes those that are self employed even when they are the only employee.

The real problem has been Congressional spending the SS tax contributions. The Congress is responsible for any deficit in the SS payouts versus contribution.

The SS is a Tax that FDR promised as a Retirement.

Those taxes would have to pay for the benefits, and Congress just spent the money.

Take away the Federal Employee Retirement System, and leave Federal Employees with only the options available in the Private Sector, non union jobs.

The problem with SS is that as long as you earn a wage you will be taxed. This includes when you are on SS benefits, and then if you earn to much they start to deduct from your benefit. Does that sound like a system that you want to continue?

Set a cutoff of some kind, grandfather these people into the existing SS, then setup a new system or just increase the 401Ks, and stop the SS Tax.

This should also be done on the State and local Level as well.

my opinion...

Thanks


Nancy's Niche profile image

Nancy's Niche 5 years ago from USA Author

Thanks Dolores for you comment and vote on this subject. The fact that our leaders continue talks on cutting benefits PROVES they cater to the wealthy and ignore the majority of voices against this cut. Time to remove them from office and demand term limits on serving in that capacity. Two terms, just like the president and include the Supreme Court justices in that recommendation too...


Dolores Monet profile image

Dolores Monet 5 years ago from East Coast, United States

Whoops, I meant top earners. Did not mean to disparage wait staff.


Dolores Monet profile image

Dolores Monet 5 years ago from East Coast, United States

Voted up. I am with you on this one, Nancy. It seems like all the cuts are cutting money for the aged, poor, and disabled while the tip earners get off scott free.

    0 of 8192 characters used
    Post Comment

    No HTML is allowed in comments, but URLs will be hyperlinked. Comments are not for promoting your articles or other sites.


    Click to Rate This Article
    working