What exactly is the argument against raising (or better yet, eliminating) the SS tax cap?

[Lyric]

I know what the REAL reason is--to keep rich people (a.k.a., Republican political donors) from paying higher taxes--but what's the argument that they use? I just can't comprehend how doing so would hurt anyone, and I can't fathom what excuses they use to convince independent/swing voters that keeping the cap at 100k a year is a good idea. Has anyone here ever heard a Republican argue this point? And why aren't all of the Democrats joined together to support this? Are there other arguments that OUR side is using to avoid taking this action?

This is one of those issues about which I have an understanding of the problem, but not a good understanding of the rhetoric and spin.

[Warpy]

1. Benefits are capped

which means Mr "I'm worth it" Ten Million Salary isn't going to see a social security check of a million a year when he retires. He sees that as terribly unfair.

Besides, it was the only way to get it passed in the 1930s, making sure the sainted wealthy weren't going to have to subsidize people who were suckers enough to work for a living until their bodies gave out.

However, the cap really is laughably low. The rate is also too high. We need to raise the cap and cut the rate while getting it out of the general fund so Congress can't rob it to fatten the rich. It was meant to be a pay as you go insurance program and worked very well that way until Johnson wanted the overpayment to pay for Vietnam and Reagan saw that as a way to sock it to the poorest so he could cut taxes on the richest.

[Lyric]

4. But isn't it in the best interests of the wealthy

long-term, anyway, to help make sure that their workers and families are healthy and safe? If Jane Doe doesn't have to worry so much about her elderly mother's well-being, doesn't that make Jane a more productive worker overall? Doesn't it vastly reduce the likelihood that Jane will commit a crime in order to take care of her ailing mother? And won't it leave Jane in better financial shape overall, thus increasing her value as a consumer?

In that respect, Social Security is a Public good, and like public roads and public education, the wealthy should pay more because they benefit in complex ways from the security of their workers and consumers.

I mean, that's common sense, right? I don't understand why they oppose it. It seems counterproductive to their own best interests to oppose a program that stabilizes the workforce and consumer base so much.

[Gormy Cuss]

7. Warpy is right -- capping it is based on benefits caps.

To uncap it changes it to a direct tax on income. If we want the wealthy to pay more for the valid concerns that you raised we need to raise the income tax. That's the source for the revenue for Medicaid and other poverty assistance programs. Doing it that way assures that Mr. Brazillionaire knows that the money isn't coming back directly but the societal payback should reach him.

[Warpy]

8. Workers can be replaced as soon as life's burdens

cause them to stop being maximally efficient cogs in the corporate machine.

They don't give a shit about Jane or her mother or anybody else.

They do give a shit about any dollar that escapes their grasp.

[Zoeisright]

2. The only thing I can think of is that if you make more than $98,000

they figure you're not going to need Social Security. But those people still draw on it.

I personally think they should START it at $40,000 to $50,000 with no cap.

[ZombieHorde]

3. Look over there -- Obama is grabbing your guns and gay people are getting married!!!!!

[laughingliberal]

5. Lol! Very good! nt

[ThomWV]

6. I would recommend a modest taxing of the rich on this one that would pay for everything

Well, it wouldn't pay for everything, we'd still have to find a way to pay for wars.

The current cap is somewhere around 113,000 if I remember correctly. Now the employee pays something like 7% and the employer pays a match up to the cap - then no more is due.

I say hold the 7% to the current cap, then phase the 7% down to 1% at about twice the current cap ($225,000) and hold it at 1% for income greater than that. In other words tax the super rich just a little bit (marginal above 225k @ 1%) and phase in the cutoff (while capturing twice the program income) rather than have it drop off a cliff. Who could say no?

[Statistical]

9. Don't mess with SS.

SS benefits are capped at $90K.
SS payroll taxes are also capped at $90K.

This "equality" is what has kept SS strong and various other need based programs slowly killed off.

So what would raising the cap or eliminating the cap on SS do? It essentially would be a 12% income tax on income > $90K.
This assumes it is your intent to raise the cap while leaving benefits capped at $90K.

So if that if your goal......
Raise the income tax for $90K+ brackets by 12%.

Current brackets
# 10% on income between $0 and $8,350
# 15% on the income between $8,350 and $33,950
# 25% on the income between $33,950 and $82,250
# 28% on the income between $82,250 and $171,550
# 33% on the income between $171,550 and $372,950
# 35% on the income over $372,950

I wouldn't jump the 28% bracket by 12% but would more make it a graduated scale....

Something like this
# 10% on income between $0 and $8,350
# 15% on the income between $8,350 and $33,950
# 25% on the income between $33,950 and $82,250
# 32% on the income between $82,250 and $171,550
# 40% on the income between $171,550 and $372,950
# 46% on the income over $372,950

Send end result in terms of post tax income, and total federal revenue and you did it without turning SS into a welfare system.

[Mariana]

10. So people can continue to pretend

that they're getting "their own" money back. People don't like to think of FICA as a tax (which it is) but rather as a "contribution" to a "retirement fund" (which it isn't). You hear it all the time: "I paid into the SS system for X years". You never hear anyone say they paid into the Federal Income Tax "system" or their state sales tax "system".

Capping the the income level that is subject to the tax helps to perpetuate that self-deception, because you don't have anyone paying far more in SS tax than they'll ever have a chance to receive in benefits.

[hansberrym]

11. People don't like to think that they were lied to, they would much rather

that the government that required them to pay into the system kept its side of the bargain.

http://www.ssa.gov/history/supreme1.html


But since we now know that the SS system will take in less this year than it pays out, the game is nearly up.


Don't blame the people who have been lied to, blame the liars.


What would you call the mandatory health plans and penalties for refusal?
If they are not taxes, wtf are they? (payments to the system?)