The Only Social Security Reform Worth Considering: Raising the Ceiling on Income Subject to It

[flpoljunkie]

The Only Social Security Reform Worth Considering: Raising the Ceiling on Income Subject to It

FRIDAY, JULY 22, 2011

Back in 1983, the ceiling was set so the Social Security payroll tax would hit 90 percent of all wages covered by Social Security. That 90 percent figure was built into the Greenspan Commission’s fixes. The Commission assumed that, as the ceiling rose with inflation, the Social Security payroll tax would continue to hit 90 percent of total income.

Today, though, the Social Security payroll tax hits only about 84 percent of total income.

It went from 90 percent to 84 percent because a larger and larger portion of total income has gone to the top. In 1983, the richest 1 percent of Americans got 11.6 percent of total income. Today the top 1 percent takes in more than 20 percent.

If we want to go back to 90 percent, the ceiling on income subject to the Social Security tax would need to be raised to $180,000.

Presto. Social Security’s long-term (beyond 26 years from now) problem would be solved.

http://robertreich.org/post/7940507194

[emulatorloo]

1. I agree with this. Why shouldn't the wealthiest Americans pay their full share.

although some DU'ers seem to believe this would be a dangerous precedent.

[Skink]

2. taxing investments should be used to supplement the payroll tax.

since much more income is now derived through investments than 83.

[philly_bob]

3. Flpoljunkie speaks the truth! (nt)

[flpoljunkie]

4. It's Robert Reich speaking the truth.

[Telly Savalas]

5. But you're channeling him.