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October 20, 2014

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Letter to the editor:

Eliminate the cap on Social Security

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In David Brooks’ column, “D.C. dance moves are exhausting,” he throws out a bone and suggests that Medicare should be further means tested so that the rich would pay more for medical care.

Since Social Security is already means tested, that makes good sense. However, Social Security has had for years a cap on contributions that Medicare does not. In 2013, the cap is $113,700. Thus, the next step to fixing Social Security should be to eliminate the cap instead of raising it in small increments. My guess is that this simple step would take care of any problem we have with funding Social Security for the foreseeable future.

These two simple tweaks will solve the Social Security and Medicare funding problems in a flash.

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  1. I would agree with the suggestion, eliminating the cap on wages, IF persons could opt in or out of Social Security by personal choice at any time during their work careers. And base their Social Security benefits payouts on their payins. But this sadly is not the case and I suspect never will be.

    CarmineD

  2. Eliminating the cap would mean much higher payments to those who paid in more to THEIR account. The SS benefit paid at retirement is based on what you payed in. Given the fact the rich people tend to take care of themselves much better than poor people many will outlive the payments made in meaning the government will end up paying out more then it took in. SO it is a bad idea.

    Or did the letter writer mean rich people pay in more but are capped to the now existing benefit they receive when they retire? Sounds like a money grab by those who plan poorly and a disaster even worse then we face now, more money NEVER fixes the problem, management of existing revenue and expense does.

  3. AARP has noted that, historically, Congress has set the cap to cover 90% of wages paid. Because more wage increases have gone to highly paid workers in recent years, that number has fallen to 84%. Restoring it to 90% would cover 36% of the projected shortfall according to AARP.

  4. Musser,

    We have a little premise in our Country - taxation without representation is not a good thing.

    I suggest that we raise your taxes by 100% and the taxes of anyone who agrees with you. That should solve it.

    Purgatory

  5. Gary--leave the cap on the employeR contributions--including on stock options and bonuses. But, yes please, eliminate the cap on employEE contributions. With Medicare, we must also eliminate endless procedures and "care" for comatose terminal 90-something folks with negative quality of "life" before and after we spend hundreds of thousands per patient. Let's go with humane pain meds and care than enhances quality of life. Do SOMETHING about illegals I.D. theft stealing Medicare benefits.

  6. More of the same from the left. "I want something but you should pay for it." This cockamamie plan is nothing more than legalized theft. Imagine a "for-profit" corporation sending you a bill every month for goods you were forbidden to acquire so their other customers could get "free" TVs, micro-waves, clothing or gasoline. That's exactly what the left proposes with their "Grand Theft" scheme. If Bill Gates or Warren Buffet paid into Social Security, they deserve to get their monthly stipend as much as anyone else. If they choose to not accept or to return the money, that's fine with me as long as it is their choice, not some envious & greedy leftist.

  7. I agree with this proposal. I think that wages that are re-categorized as capital gains should also be subject to social security and medicare taxes as well. As for the specious arguments about "redistribution" and "taxation without representation". Wealth is already being redistributed upward (the most obvious example being the bank bailout that made sure bonuses were still paid to people whose criminal behavior wrecked the economy). The idea that wealthy individuala are not represented when are tax laws are written or enforced is absurd.

  8. Let's cut through the baloney here. The purpose of nearly every entitlement program is wealth redistribution. The few million millionaires and billionaires don't need a $1000 month Social Security check. The other 300 million Americans do.

    Social Security is fairly close to a breakeven proposition. It only has a few trillion in unfunded liabilities going forward which is a pittance given the level of economic activity that is going to take place over the next 50 years. on average people are currently pulling out about what they paid in.

    Medicare is the problem. A married couple on average will pull close to $350,000 out of the Medicare program. The problem is they only paid in a little over $100,000. I believe Medicare is looking at close to $50 trillion in unfunded liabilities going forward. That's a much bigger headache.

  9. This is a horrible idea. I have absolutely no desire to pour more of my money into such a bad investment.

    Instead they should tie retirement age to average life expectancy.

    Life expectancy in the US is now 78. Social security was not designed to take care of people for the last 12-16 years of their lives. This problem is only going to get worse with advances in medical technology.

  10. Impose an import fee on the labor component of imported goods that is comparable to what the FICA tax would be here and that would not only address much of the problem that raising/eliminating the cap would do, but even potentially allow the overall rate to be lowered and still maintain a higher amount of revenue for the system.

    It would have the added benefit of helping to level the playing field, and make it more attractive to keep manufacturing jobs here.

  11. Social Security was designed to be financial security in retirement. It was NOT designed to pay the bills of the modern, out of control medical system in America. The bankruptcies and financial ruin of those over 75 on SS come largely from medical expenses.

    During the last election, it was pointed out that the Universal Health Care System in Israel costs only 1/2 as much per person as in America.

    Wiki:
    "Medical tourists....come to Israel, perhaps most commonly from the US, because they can receive quality health care at a fraction of the cost it would be at home, for both surgeries and in-vitro fertilization procedures."

    Wiki:
    "Israel is emerging as a popular destination for medical tourists. In 2006, 15,000 foreigners travelled to the country for medical procedures, bringing in $40 million of revenue."

    Note that it is cheaper to travel to Israel and stay there for medical treatment then paying US medical prices and the food is a lot healthier as well. My guess is that their dentistry system is also superior.

    One of the important reasons why Israel has competitive health care is because their Government has a concern for all of the citizens, not just the privileged.

    Israel's medical system does not add expenses to the medical bills of patients to send to wealthy investors as dividends. The CEOs of their medical institutions do not have private zoos in their backyards and business jets at their disposal.

    It is not possible for Social Security income to keep up with the rising, profiteering medical costs passed on to retired Americans on limited incomes.

  12. Peter Fritz said....

    "Or did the letter writer mean rich people pay in more but are capped to the now existing benefit they receive when they retire?"

    That's exactly what the liberals want but they refuse to talk about it in the open. Right now it sounds like they just want the rich to pay more because they can afford it.....but what they really want is more money and cap the upper benefit, as Mr Fritz pointed out. They just don't verbalize this idea.

    Those who always demand more from the "MAKERS" are called "TAKERS".