Manchin Proposes Raising FICA Income Cap

[Yo_Mama_Been_Loggin]

On Jan. 19, the U.S. officially hit its debt ceiling, having spent all of the $31.4 trillion available for expenditures as allocated by the Treasury. In the days since, conversations have become heated about how the country will move forward to avoid a total spending freeze and a financial catastrophe.

-snip-

One politician has come forward with a partial fix, though not all of Congress may agree with him. Democratic Sen. Joe Manchin wants to change the way in which Social Security is funded, notably raising the cap on payroll taxes in order to make the highest earners contribute more to the program’s reserves.

As Manchin told CNN during a recent appearance on the network’s “State of the Union” program, he believes that providing more money for the program in this manner will ensure beneficiaries continue to get payments. This new revenue would also ease government overspending on this major line item, thus — at least partially — alleviating the debt ceiling crisis.

Per the Social Security Administration, every American worker and their employer offers 6.2% of their pay towards the program, up to $160,200 in 2023, while self-employed workers pay a more substantial 12.4% of their wages (since no employer co-pays). However, if you’re a millionaire, you will have met the $160,200 cap around February of every year, per The Hill. When considering the combined Federal Insurance Contribution Act (FICA), which combines Social Security payroll taxes and Medicare payroll taxes, regular employees pay 7.65% and self-employed persons pay 15.3%.

https://finance.yahoo.com/news/manchin-proposes-easiest-social-security-182706704.html

[Atticus]

1. Why should there be ANY cap? Seriously. nt

[NickB79]

8. Agreed

[usaf-vet]

51. Even at $160,000. Most if not all congress members will not pay FICA tax on a minimum of $30,000....

.... given the average pay is $190,000.

https://www.comparably.com/salaries/salaries-for-members-of-congress


They should at least pay FICA on every cent of their salary.

[TimeToGo]

57. Yep

It should, at minimum, be at the Congressional salary. (Minimum)

[usaf-vet]

67. Roger THAT!!

[moose65]

16. If I recall correctly....

There is an income cap for a good reason - they didn't want extremely rich folks collecting tens of thousands of dollars a month in Social Security.

The obvious solution to that is to have a maximum cap on the amount paid out by SS, and anyone who earned millions during their working lives would get that maximum amount.

I think Obama wanted to raise the cap so it covered 90% of earners. I just checked, and the line separating the top 10% of earners is around $175,000.

The top 5% is about $342,000. The top 1% is about $825,000.

I wonder - if the cap were eliminated, could the rate be lowered? That would amount to a huge tax cut for the lowest earners, because there is no exemption from SS - even the poorest of the poor pay it on every cent they earn.

[Atticus]

19. Isn't this about the cap on what amount of income is subject to withholding? In 2022, if

your income was $147,000 ( the "cap" ), 100% of your income was subject to FICA taxation. If your income was $14,700,000, that same amount, $147,000---1% of you income---would be taxed.

[Roland99]

31. Remove FICA income tax cap....

and setup a diminishing return on income once retired based upon someone's current wealth/assets

Someone could make $1mil/year for several years yet hit retirement age nearly broke

Either way, FICA tax is horribly regressive

[honest.abe]

43. Yes, this is way I would structure it if I was in charge.

It is the fairest simplest solution.

[elleng]

39. Thanks

[markodochartaigh]

59. I work part-time on MTurk answering surveys.

In a good month I might earn a couple of hundred dollars. It is something I can do from home, when my internet is working, and it pays a few bills and helps me stretch my pension. But since I'm considered a 1099 contractor I have to pay an additional 15.3% for Social Security and Medicare taxes. I probably pay twenty times the percentage on this income that multimillionaires do, at least the ones who pay taxes.

[ARPad95]

70. As a 1099 contractor, you're paying an additional 7.65% (6.2% SS & 1.45% Medicare) that would

normally be the employer's half of FICA for W-2 employees. The other 7.65% is what any employee would have withheld from their wages and reported on a W-2 by their employer.

[markodochartaigh]

72. Well, not any other employee. An employee making

over $165,000 wouldn't have any more withheld.

[ARPad95]

75. Right, but that cap only applies to 6.2% SS withholding. There's no cap on 1.45% Medicare

withholding.

[Rebl2]

30. I agree!

I think democrats have talked about doing this before and it goes nowhere unfortunately.

[thesquanderer]

45. I think the argument was that it would be unfair to cap the benefit without capping the contribution

[Freethinker65]

2. Yep. Raising the cap is a no brainer. What's in it for Manchin tho? Fossil fuel subsidy increases?

[W_HAMILTON]

9. Because it's highly unlikely to pass now.

So, he gets credit for advocating something that is unlikely to actually go into effect.

[brush]

13. You're right, a PR move. Raising the cap has been proposed for years...

Last edited Wed Jan 25, 2023, 07:03 PM - Edit history (1)

It makes sense but is nothing. new that Manchin came up with. '

[Beastly Boy]

14. It didnt pass in '22 either

https://nationalinterest.org/blog/politics/senator-manchin-has-plan-fund-social-security-past-2033-200543

Apparently, it doesn't matter who controls Congress for it to not pass.

[W_HAMILTON]

17. It didn't pass because the only way it would pass is through reconciliation.

And we know what Manchin thinks about that -- hell, he's already on record in that article that he wants it to have support from both parties, which isn't going to happen.

What Democrats do you know that are against raising the Social Security wage cap?

[Beastly Boy]

26. Like I said, apparently, it doesn't matter who controls Congress for it to not pass.

Reconciliation or not. But the fact remains: Manchin proposed it when the Dems controlled the House, and he proposed it when the Reps control the house. There is no "now" in reasoning why he is proposing it now.

[W_HAMILTON]

27. Then it goes back to what I originally said:

"Because it's highly unlikely to pass now. So, he gets credit for advocating something that is unlikely to actually go into effect."

He's not for raising the cap -- he's for (often, and in this case, certain) unachievable bipartisanship above all else.

If he were for raising the cap, he could have done that in the last Congress, unless his partner-in-crime and now Independent Sinema would have refused to raise the cap through reconciliation as well.

[Beastly Boy]

32. I don't recall a time when the measure was any more likely to pass than it is now.

Anyone who ever proposed raising FICA cap is as guilty as Manchin, for both getting credit for the proposal and knowing it is unlikely to pass.

This issue is not Manchin specific.

[W_HAMILTON]

42. Do you know any other Democrats that were unwilling to raise the cap...

...via reconciliation?

If not, how can you blame these unnamed -- and maybe nonexistent? -- people instead of Manchin, who we know is against taking such measures to do so and instead insists on bipartisanship with a party who is almost always against these sort of tax increases?

I don't know how you can't see the difference in someone proposing something and willing to vote for it vs. someone that is proposing something and won't vote for it unless it comes about through an unachievable means...

[Beastly Boy]

60. You are proving my point.

With all the democrats willing to raise the cap, and all the democrats proposing to raise the cap, none raised the cap. The results are completely independent of intentions. This is self evident. We can speculate about intentions, Manchin's or anyone else's, until our faces turn blue, it will not affect the outcomes one bit.

Like I was saying, this issue is not Manchin-specific.

[W_HAMILTON]

64. Because Manchin was against the one method it could have been accomplished.

Once again, why blame other Democrats for his (in)action due to his insistence on this being a bipartisan approach?

[Beastly Boy]

65. Who is blaming other Democrats?

You raised the issue of other Democrats, I didn't. You speculate about Manchin somehow being unique among other Democrats, I don't.

All I am saying is that intentions, Manchin's or those of any other Democrat, however you want to speculate about them, played no role in outcomes. This is the absolute opposite of blaming anyone for anything.

There is no difference in outcomes. So you have no grounds to speculate that Manchin's intentions determine the outcome this time.

[Bettie]

55. Unfortunately, the reality is that no one controls

the Senate without at least 60 votes, because most legislation won't move without that.

But, right now, we can get judges seated. That's about it.

[calimary]

61. So let's at least do THAT!

Fill ALL those vacancies! Don’t risk letting that perk fall to the Republicans!

And Dems: STOP giving the GOP the benefit of the doubt!!! They’ve proved time and time again that they’re treacherous as hell and their word means about as much as what you used to get 15 minutes for in a parking meter.

Stop trusting them to do the right thing!!! They can always be counted on to do whatever they think is right for themselves and their side - and NOTHING more.

Because Republicans DON’T want to help you.

Republicans don’t want to help ANYBODY.

Republicans don’t EVER want to help anybody but themselves, and those who are sufficiently well-off not to need any help (tax cuts for the rich!!!). And when they lie to you and say they REALLY DO want to help the poor, what they’re REALLY saying is that they REALLY want to help all those poor rich people!

That’s all you need to know about Republicans.

That’s all you EVER need to know about Republicans.

[Bettie]

71. Agreed

everything you said is right.

[Beastly Boy]

63. The art of the possible.

That's Biden's motto. And I am in full agreement with it.

[not fooled]

20. And because conflating Social Security with the national debt works to his aim

which is to cut the program.

Duplicitous tool. Ahole.

[Freethinker65]

24. Except raising the cap would not cut the program.

[not fooled]

29. He knows there is no way this would pass

so he can get the concept out there and appear on the surface to be a good guy with no threat or downside for his true position. Duplicitous scum.

[pnwmom]

34. It's something the Dems could "give" in exchange for raising the debt limit

which most of us would want anyway.

And it would help to make the government budget more solvent, which is supposedly a Republican goal.

[moniss]

40. I think his statement

may be more of a political shot back at Mitch and company for running GQP ads against him in WV recently. Sort of a reminder to the GQP that he doesn't absolutely have to go along with their obstruction/attack on Biden and the Dems.

[ColinC]

3. Personally not the biggest fan of that guy.

[Walleye]

4. I hope his Republican friends let him get away with it. It's a good idea, amount is important

[GreenWave]

5. When the government attempts to do good things for the people

the pachyderms must stampede it to death.
Never give the people the slightest inkling of what good a government can do if not shackled by the rich.

[Justice matters.]

22. No surprise there:

[Phoenix61]

6. Wow! He's acting like a democrat. nt

[W_HAMILTON]

7. Why didn't he do this back when we had control of Congress and it actually had a chance of passing?

[Beastly Boy]

12. He did.

https://nationalinterest.org/blog/politics/senator-manchin-has-plan-fund-social-security-past-2033-200543

[W_HAMILTON]

15. So he was for it, just not for the only way it would could possibly pass (through reconciliation).

Oh well, he's the one that have this everlasting belief in the power of bipartisanship, so maybe we can task him with finding enough Republican Senators and Republican House members to vote for it and convince McCarthy to actually bring it up for a vote...

[Beastly Boy]

18. I am not commenting. Just correcting the record.

I leave it up to you to draw whatever conclusions you want.

[Justice matters.]

25. We don't negotiate with domestic terrorists.

[W_HAMILTON]

28. Manchin does. Or at least wants other Democrats to...

...because, for all the talk about his bipartisanship, it sure seems to be a one-way street when it comes to him and his Republican colleagues. When is the last time he personally brought a bunch of them over to pass a primarily Democratic-backed bill? I'm not sure, but I'm sure it's a helluva lot less than he has torpedoed/significantly reduced a bill that would have otherwise passed strictly along party lines but he refused to vote for it because it wasn't """bipartisan."""

[summer_in_TX]

35. That position is going to be harder and harder

to maintain the closer and closer we get to June unfortunately, if no resolution is found. The clamor to DO SOMETHING will increase and the rational folks are much more likely to respond to the pressure than the crazies.

[Justice matters.]

68. The domestic terrorists shutdown when Obama was in office

October 1 to 17, 2013
President: Barack Obama

Senate: Democrats (54-46), Majority Leader Harry Reid

House: Republicans (232-200), Speaker John Boehner

Why: Ted Cruz, basically. While House Republicans, led by Boehner, had pressured the White House into agreeing to lower levels of discretionary spending, and conservatives in the House led by Rep. Tom Graves (R-GA) demanded that any funding bill delay implementation of Obamacare by a year. It was set to roll out the following year, and conservatives, most vocally led by Cruz and Heritage Action, were desperate to stop it before it gained beneficiaries who could defend it politically. Enough House conservatives got on board with the plan to make it impossible to pass a continuing resolution, and the government shut down.

After 17 days, Boehner folded and passed a funding bill that did not defund Obamacare and that most of his caucus opposed. Roughly 850,000 workers, or about 40 percent of the federal workforce, were furloughed.

https://www.vox.com/policy-and-politics/2018/1/19/16905584/government-shutdown-history-clinton-obama-explained

boner folded because the polls showed the vast majority of the country blamed the domestic terrorists in the House.

Expect the same in June, especially if hair furhair is indicted by then.

[summer_in_TX]

69. That gives me hope.

I really like the sound of hair furhair being indicted. May it be so.

[doc03]

10. He is the best we can get from WV. I hear Gov. Justice may run for his seat, then we will

have another Rethug.

[Fiendish Thingy]

11. Eliminating the cap has been a good idea for a long time

But it shouldn’t be connected with the debt ceiling.

[Still Sensible]

21. One of the rare times I agree with this tool! n/t

[patphil]

23. Good idea, can't imagine the Republicans would go for it...too much like a tax on the rich.

And we know how much they hate that

[kelly1mm]

44. It also violates President Bidens 'no new taxes' pledge unless there is a 'donut hole' from 147k

to 400k.

[honest.abe]

52. I think Joe needs to rethink that "pledge".

The donut hole makes no sense to me.

[republianmushroom]

33. a start

[hadEnuf]

36. Social Security has nothing to do with the national debt.

Any attempt to "fix" the national debt using Social Security is completely false and total absolute bullshit.

It is an attempt to meddle with and cut Social Security. Period, End of story

[markodochartaigh]

73. Social Security has nothing to do with the national debt.

This should be the first sentence out of the mouth of every Democrat when discussing the topic. With the caveat, of course, that if the Republicans do get rid of Social Security and Medicare the national debt will skyrocket because the economy will crash.

[hadEnuf]

78. Hands off Social Security. Period, end of story, non-negotiable.

It has always been the 3rd rail of politics for a reason and it should be.

ANY politician proposing cuts to SS needs to be f'ing fried.

[Buckeyeblue]

77. Exactly right. As is typical of the Maggots, they create false problems

And try to solve them but hurting working class people.

The way to lower our deficit (which I don't believe is a problem), is to support the Biden economy, which has as close to 100% employment as we can get.

Congress should pass the debt ceiling measure (even though I think constitutionally it's not necessary) and let the economy continue to do its thing.

[Lonestarblue]

37. I realize it's Yahoo, but part of this article is sloppy, and incorrect, reporting.

“This new revenue would also ease government overspending on this major line item.” Social Security pays its own way through the FICA system. The money raised is not the government’s money to use wherever they want. It belongs to the people who pay into the system, and to say that the government overspends on the program is just wrong. The Social Security Trust Fund is solvent.

Social Security should be taken off budget because its money should never be considered the same as income taxes that Congress can allocate as they want. SS should be looked at similarly to 401k programs to which workers and employers contribute. Having Congress slash benefits would be like a corporation saying it is taking 10% of employees’ investments in their 401k to use for business expenses, and there’s nothing employees can do but lose their money.

[Bob_in_VA]

38. Maybe it's an age thing

I'm in my 70's so I remember things that happened 30 years ago that some of the younger readers here are maybe too young to remember. In 1997-8, I believe it was, the Congressional Budget Office issued a report that, if the Clinton budget policy was followed, the National Debt would be effectively ZERO by 2009. A zero national debt means, among other things, no debt ceiling. So this whole kabuki dance could have been avoided. Interesting side note: the so-called "fiscal conservatives" on the Right were dead set against this.

Unfortunately, we got Shrub and "Darth" Cheney a couple of years later with their "Oh, we have to give the wealthy major tax cuts to ameliorate the recession!!" A move that effectively put paid to any possibility that we would retire the national debt in my lifetime.

[TeamProg]

41. Get rid of it altogether.. and cap the benefits. n/t

[honest.abe]

46. Clearly raising the cap is the simplest fairest solution.

I hope there can be enough pressure on the Rs to get it done.

[Bristlecone]

47. How would adding money to SS reduce the national Debt?

I don’t get it.

[honest.abe]

50. There really isnt any connection except the Rthugs are using the debt ceiling as a bargaining chip..

to chop SS benefits.

[oldsoftie]

48. There shouldn't even BE a cap. Does it at least go up by inflation rate every yr?

[honest.abe]

49. It does go up every year.

But the cap makes no sense.

[DENVERPOPS]

53. The joke is

that the "Highest Earners" don't actually pay into social security, because SSI is only deducted for "Earned Income Wages" and the rich's income comes mostly if not entirely from "Capital Gains Income"..........

(In addition, that is why the Republicans have continued to cut the tax rates on "Capital Gains Income", to get the taxes these people were paying, down below the normal rate of Federal/State income taxes.....)

There is, or at least used to be, a loophole that allowed people making a pretty good income, all subject to FICA, to avoid a large segment of their income to not be subjected to FICA. They would take a "base salary" of say 50K and declare the rest a "dividend"? or some other term??, and would avoid FICA deductions on that amount..............not sure the Gov't has changed that, but many took advantage of that loophole for a decade or more.....(Maybe still do, if they haven't changed the rules)

Of course, Munchkin would suggest this being a DINO supreme...........It would nail the upper middle class, and not touch the Rich/Wealthy........

[honest.abe]

56. Well I am I suppose upper middle class and I totally support this.

Forget the uber wealthy, we will never get their money.

[TheCowsCameHome]

54. Do it. Yesterday.

n/t

[onecaliberal]

58. Remove the cap without restriction. Make them pay on ALL income just like us surfs.

[Rocknation]

62. Which would allow EVERYONE'S rate to plummet

Put the cap on the benefits -- base it on U.S. median income, for instance.


Rocknation

[pansypoo53219]

66. DUH! eliminate the cap. lower the %.

greenspan's 'fix' was a time bomb.

[WarGamer]

74. Excellent. Now let's get politicians on record protecting the wealthy.

[BWdem4life]

76. They'll never raise the cap, because

Then how could they kill the program?