He is nothing if not consistent.
President George Bush announced that he will continue to support taxing wealthy people at a lower rate for Social Security than everyone else.
Those who earn less than $88,000 a year will pay 12. 4 percent in Social Security tax.
Those who earn more than that will pay a smaller rate, and the more one makes, the smaller the rate.
Those who earn 180K will continue to pay at 6.2% rate.
Those who earn 360K will continue to pay at 3.1% rate.
Those who earn 720K will continue to pay a 1.6% rate.
Those who earn 1.44 million will continue to pay a 0.8% rate.
Those who earn 2.88 million will continue to pay a 0.4% rate.
So while Sammy Sosa with his $10 million salary will pay somewhere around 0.1%, the rest of us will pay 12.4% of our income on Social Security.
Gee, I wonder why Social Security is facing a funding gap?
Republicans favor wealth over work.
This is one of the best examples of Republican policies making the rich richer, the poor poorer and the middle class smaller.
Spread the word.
9 comments:
Um, well, don't rich people also in fact receive less out of Social Security? I fail to see how this can be regarded as a transfer from poor to rich. Possibly the other way around.
-N. Y. Krause
This is probably the most dishonest post I've read on this site. Everyone is taxed the same on social security up to $88,000. Everyone pays about 12% up to $88,000. All you've done is divide by larger numbers for higher incomes. Hey DJW, if I make $5 billion next year, I'll only pay a rate of 0.000002%. But we all get the same amount paid back to us. So someone who makes $20,000 gets 4 times as much back from social security as someone who makes $80,000 (compared to how much they "contributed" to their "account"). How is that fair?
CF
I knew that would get CF to post. Welcome back. But, there's nothing dishonest about it. I'm just stating the obvious: the $88K cap on taxable income means that the actual tax rate paid by people who make more than $88K is lower than the actual tax rate paid by people who make less than $88K. That's not dishonest, that's accurate. And I don't think that everyone gets paid the same. I don't know that for a fact though. N.Y. or CF -- can someone find that out for sure? As I recall from my days as a teller, Social Security checks varied widely, and the people driving Jags deposited significantly larger checks than the people driving Fords.
Social security check do vary wildly; they're based on earnings while you worked, and the intent is to reflect your cost of living But they're capped; they're supposed to keep senior citizens out of poverty, not keep high earners in caviar through their golden years. And just as the payments are capped, so too is the income that is taxed. Dan's suggestion would require high earners to pay taxes on income which could not count toward what those same people get from the porgram, which could lead the wealthy to oppose social security. It's all about compromise. This one has been fair, and has worked.
Maybe that compromise was fair and it did work for many years, but if we start from the premise that Social Security needs more funding, or benefits need to get cut, then it's time to come up with a new compromise that is fair and will work for many years in the future. Having everyone pay the same rate seems like a fair compromise to me in order to fund the nation's pension system.
Social Security definitely doesn't pay out the same for everyone. Those who pay in more also draw out more. But I will bet you $75 that, for the people who pay in the most, the system is designed to pay out less than they paid in; and, for the people who pay in the least, it is designed to pay out more than they paid in, at least if you don't adjust for life expectancy. I will make the same bet for $35, if you do want to adjust for life expectancy.
-N. Y. Krause
Phocion,
You make it sound even worse. So Social Security is basically a shakedown of those earning more than $88,000/yr under threat of social violence and disruption? i.e., extortion?
-N. Y. Krause
(from Duff)
As long as SS is to serve its function of creating an income floor for the elderly without becoming a pure welfare program (always been the goal), it's impossible to run the system without capping the income on which taxes are paid. Otherwise, a high earner isn't going to get any semblance of return for the payment into the system (because you'll always cap benefits, right? today it's 1925/month. To not do so would be bizarre.)
Our problem with SS isn't, at core, a financial one -- it's a philosophical one. We don't agree culturally on what the program *is* and what purpose it serves. The political compromises that built and maintained the system have made the result incoherent. I have zero confidence that the political process the President is embarking upon will help us clarify it....
See http://www.ssa.gov/OACT/quickcalc/calculator.html for more fun.
Another good article on this philosophical disconnect --
http://www.techcentralstation.com/121004A.html
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