About taking the cap off social security-

[hedgehog]

Why is it considered by some to be such a burden to pay the tax even after your income goes over $97,000? What about the people making $20,000 or $21,000 or less?

[liberal renegade]

1. end the cap

problem solved,if there really is a problem.

[superkia]

2. Politicians would probably lose some financial support from the...

wealthy if they dug into their pockets anymore. The majority of people that don't make over that amount cant afford to feed the politicians the money they want. Most of us don't matter to most politicians anymore, unless your wealthy.

[PDJane]

3. That's a very good question...........

I'd like to know the answer too.

[RaleighNCDUer]

4. The burden isn't on the taxpayers, it is on the politicians

who will lose donations from those taxpayers for their betrayal of them. Those taxpayers may only have a single vote each, but their donations buy thousands of votes.

[Nite Owl]

5. If there were no cap

maybe the rate could be lowered. More people could pay less each paycheck, an actual pay raise for those who need it most.

[hedgehog]

19. Wow - what an amazing notion - let those with the most money

who benefit the most from a just society, pay the highest tax rates!

I'm being sarcastic about the average economist, not about you!If only more politicians thought like us!

[Bitwit1234]

6. There is no reason that people making over $97,000

can't pay a higher premium. They don't pay hardly and taxes, what with all the breaks and tax shelters, some end up paying $00.00 taxes. Check it out.

[cutlassmama]

7. Yes and this why they can afford to support candidates and people in office.

[slipslidingaway]

8. My replies on this subject FWIW...it is not about the burden as

much as not being a fool? :shrug:


The same people who saw their SS taxes double during the 80's and 90's and who now make over the cap are being asked to pay again.

We already did this 20 years ago! The government has borrowed 2 Trillion dollars from the SS Trust Fund and from the estimates I've read the trust fund will have collected almost 3 Trillion dollars in excess before it needs to draw on that money, in about ten years.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=3541289&mesg_id=3541560



THE LOOTING OF SOCIAL SECURITY
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=3541289&mesg_id=3541616


Year-by-Year Analysis of the Bush Tax Cuts Shows Growing Tilt
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=3541289&mesg_id=3541933



...instead of looking to the segment of people who finally made it over the current 97,000 cap to account for some of the 2 trillion dollars, why not look to the top 5% or 15% for economic justice... I'd love to hear a proposal from one our our candidates that actually targets the group of people who benefited the most from the Bush tax cuts, but I doubt that will happen. It appears that most want to pull the next higher income level down and leave the very wealthy alone, IMO it is not a good strategy for the Dems to take.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=3541289&mesg_id=3549256


Trust Fund Data
http://www.ssa.gov/OACT/STATS/table4a3.html

[hedgehog]

9. I hate to tell you this, but I think if you make over $97,000, you are

in the top 15%. Don't feel bad though, being in the top 15% isn't what it used to be. Check out this link:

http://www.lcurve.org/

[slipslidingaway]

11. Look at the numbers at this link, most likely 97000 is at the lower

end of the top 20%. What will most likely happen is the cap will be raised to 120 or 130K, but look at the amount of money from the tax cuts that will go to the top 1%, 5% or even top 15%. So they raise the SS taxes in the 80's to build a fund for all the boomers that will be retiring and instead use it for this horrible war in Iraq and give the most money in tax cuts to the very wealthy.

What's not to like about that?

You also need to look at the geographic location of where one lives when looking at salary.

http://www.ctj.org/pdf/gwbdata.pdf

[sandnsea]

13. Top 7%

Which I'm relatively certain I remember telling you a few days ago. Yes, these are the people who got the tax cuts that came from the FICA money, so they should be the ones to pay it back.

http://en.wikipedia.org/wiki/Household_income_in_the_United_States

[slipslidingaway]

14. 97000 is the top 7%? I'm not looking through the entire link, esp.

from a site that anyone can change. Most of the money will go to the top 5%, almost 50% of the tax cuts. Any candidates proposing they return the money? As I said to you the other day the cap will most likely be raised to 120 or 130 and the very wealthy, including many of elected officials, will be laughing at the people who fell for this transfer of wealth. Most likely they'll do it to the next generation unless people call them on it.


http://www.ctj.org/pdf/gwbdata.pdf

[sandnsea]

16. Here, this is from the IRS

Although it's 2004 so the figures are slightly different now. A person earning $99,112 was in the top 10%. I know it's terrifying to realize 90% of people will never make the kind of money needed to have a truly worry-free life, but there it is.

http://www.house.gov/jec/news/news2006/pr109-94.pdf

[antigop]

17. Just because someone makes $99,000 or above does NOT give them a "truly worry-free life"

That job could evaporate as jobs are outsourced and jobs are replaced with h1-b visas (thank you, sHillary!) Radiologist jobs are outsourced, engineering/programming jobs are outsourced, even legal jobs are outsourced -- these were high-paying jobs.

A $99,000+ per year job does not guarantee you access to health insurance, especially if you have a pre-existing condition. And one catastrophic illness or accident could wipe out all the savings one had accumulated on that $99,000+ salary.

So even if you are in the upper 10% today, that does NOT necessarily give you a "truly worry-free life".

Believe it or not.

[flaminbats]

18. Edwards gave an excellent answer..

he said millionaires shouldn't be excluded from the Social Security tax, but there should be a gray zone for those making just over $97,000 but less than $200,000. that should be on the table, and the size of the deficit should determine how large or small that gray area of taxable income will be.

but why is the payroll tax regressive? the less a person earns, then less of that person's income should be considered taxable.

[FreeStateDemocrat]

24. The first $10,000 should then be excluded, especially if you make under $100,000.

[hedgehog]

25. Absolutely - this would help a lot of kids working summer jobs to pay for college!

A lot of people get very cynical about the Social Security system when they get that first paycheck and then someone tells them they'll never benefit!

[flaminbats]

27. wouldn't that reduce their eligibility for benefits?

I thought the more you paid in payroll taxes, the more you'll receive in benefits after you retire.

[hedgehog]

28. Social Security benefits are based on life time earnings.

For most people, earnings from their first jobs aren't too significant in the long run. This does raise an issue for people stuck in low wage jobs. Maybe the solution is to raise wages?

[hedgehog]

20. I agree- between my husband and me, we're in that bracket, but

we're paying off a mortgage, sending kids through college and trying to save for our retirement. I get embarrassed when I realize that I'm better off than 89% of the people in this country. Then I realize that the difference between me and the top 5%, top 1% is incomprehensible. We need to wake people up to the fact that unless we distribute this nation's wealth more evenly, we're all in trouble!

[sandnsea]

23. FICA taxes

FICA. Which would apply to separate incomes, not joint incomes.

[sandnsea]

22. This is about FICA taxes

Can people focus around here. It's the top 10% and the person in question can't accept how few make that kind of money either.

I said it's tough to accept 90% will never get there. Anybody can have unforeseen events, I'm not talking about that. 90% will always have money concerns as part of their worries, no matter what else happens on top of it.

[antigop]

29. Um, it was your statement...

"I know it's terrifying to realize 90% of people will never make the kind of money needed to have a truly worry-free life, but there it is."

[slipslidingaway]

35. Thank you! n/t

[slipslidingaway]

34. That's adjusted gross income and 97,000 is not in the top 7% as

you stated above. As I said in my first post here...

it is not about the burden as much as not being a fool?

The same people who saw their SS taxes double during the 80's and 90's and who now make over the cap are being asked to pay again.

We already did this 20 years ago! The government has borrowed 2 Trillion dollars from the SS Trust Fund and from the estimates I've read the trust fund will have collected almost 3 Trillion dollars in excess before it needs to draw on that money, in about ten years.

How many times do you let people take advantage of you before calling BS?


And in my post to you above, yet you divert attention from the people who received the most money and only want to cry foul on those who finally made it over the cap and say nothing on the top 5%.


Most of the money will go to the top 5%, almost 50% of the tax cuts. Any candidates proposing they return the money? As I said to you the other day the cap will most likely be raised to 120 or 130 and the very wealthy, including many of elected officials, will be laughing at the people who fell for this transfer of wealth. Most likely they'll do it to the next generation unless people call them on it.

http://www.ctj.org/pdf/gwbdata.pdf

[Honeycombe8]

10. I don't know. But could it be because they're not likely to get that $$ back in benefits?...

You know...because they end up paying so much more into it, and benefit amounts rec'd are not that much. Just taking a stab at a guess.

[slipslidingaway]

12. Yes that is also part of it, they limit the amount that is paid out. If

you earn a million and pay SS taxes on your entire income you will still only receive the same amount as someone paying taxes on ??? just picking a number here, say 118,000. So the idea of paying taxes on all one's income will never pass which is why they will most likely just raise the cap, small business owners earning in the range of the raised cap will be very happy.

[CTyankee]

21. If you make $97,000 or more do you pay ANY SS tax or are you just frozen at what you

paid before you reached $97,000?

[hedgehog]

26. The Medicaid deduction continues, but you pay no more Social Security tax that year.

[CTyankee]

30. But doesn't "capping" mean taxing only up to that amount, just not above it?

My daughter who has done taxes for H&R Block just told me that on the phone today when I asked her.

[hedgehog]

31. Yes.

Among the proposals on the table are

1. Remove the caps so all earned income is covered by FICA (yea!)

2. Raise the retirement age. (BOO!)

[slipslidingaway]

36. After 97,000 you do not pay into SS taxes because they limit how

much is paid out. It is my understanding that the earnings cap moves as does the amount that is paid out. So if you earn 1 million dollars you will receive from SS the exact same amount as someone who earned 97,000. It was structured this way so it would not appear to be a welfare program, you gave and you received and that is why I feel that those who say just remove the cap are only looking at half the equation, the very wealthy would never go along with that idea. The maximum annual benefits an individual can receive each year is currently somewhere around 26,000 and I believe they can opt out of receiving those benefits.


Here is a link on taxes paid...

http://www.taxpolicycenter.org/taxtopics/Payroll-Taxes.cfm

"The payroll tax share of federal revenues has grown from about one-sixth in 1960 to more than one-third today, in large part because of Medicare’s advent in 1965 and a sharp increase in Social Security taxes in 1983.

Source: Historical Amount of Revenue by Source

The Federal Insurance Contributions Act mandates collection of Social Security and Medicare taxes and is the source of the acronym “FICA” tax.

Employees and employers each pay a 6.2 percent Social Security tax, yielding a combined rate of 12.4 percent. The tax applies to the first $97,500 of annual earnings in 2007 (indexed each year by the change in average worker’s pay); the maximum tax in 2007 is thus $6,045 each for employees and employers.

Source: Historical Payroll Tax Rates

Employees and employers also each pay a Medicare tax equal to 1.45 percent of all wages, or a total of 2.9 percent; unlike the Social Security tax, there is no limit on the Medicare tax.

Self-employed workers pay both the employee and employer portions of the tax: 12.4 percent for Social Security tax and 2.9 percent for Medicare, a total of 15.3 percent subject to the cap on earnings subject to Social Security tax."

[Honeycombe8]

37. Wow. That's a lot of taxes. Thanks for the info. Very informative. nt

[slipslidingaway]

38. YW, yes it is quite a bit of taxes and what are we paying for?

A resource war in the ME :( and tax cuts to the extremely wealthy. That is why I feel it is unhealthy for the Dems to adopt raising the cap so easily and for those who have not reached above that area to agree with them. Is that a segment of the population (say 97,000 - 130,000) that the Dems want to alienate or those in a lower income range want to see as the enemy? I would hope not, but from the replies on these threads it appears so. Those in income levels below are saying the hell with you while they do not focus on the extremely wealthy. As I tried to explain to sandnsea on the prior thread my family is not your enemy and instead of dividing we should unite to fight those at the very top, it seems to have fallen on deaf ears. At some point those in that income range will just say 'good luck, we're all on our own.' It should not be that way :(

I remember all too well the late 70's and early 80's and the discussion on SS and how the taxes doubled to protect SS. Thanks for reading.

[Honeycombe8]

39. Well, it's either raise the cap or lower benefits. Or both? SS is in trouble...

thanks to *. I believe all the Dem candidates agreed that one of those options must be done, in addition to growing the economy (well, one candidate thought growing the economy alone might be sufficient...was it Clinton? I think it was Clinton. But that was probably a political position and not truly accurate.)

I don't think SS went to pay for the Iraq War. My SS taxes are paying for my father's generation's SS benefits, as well as SS disability payments (to those who never paid into SS), and such things as that.

[killbotfactory]

15. Because this country is nearly a dictatorship of the wealthy

And most would rather have a bunch of old people homeless and dieing than to have another penny of their income go towards helping them.

[themaguffin]

32. People should not get a tax break after $90K

If there is income it should be taxed as the rest is.

[rucky]

33. most. regressive. tax. evah! n/t