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Wednesday, Feb. 27, 2013 | 2:02 a.m.
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 ...
I would not break the link between worker contributions and benefits. Making Social Security more like a welfare program than a social insurance program is a bad idea.
A Heritage report shows those in these 8 states would pay 50% of the additional OASI taxes.
Over 50% (5.5 million workers) live in 8 states:
California (1.5 million), New York (859,000), Texas (754,000), Illinois (519,000), New Jersey (503,000), Florida (495,000), Pennsylvania (430,000), and Michigan (429,000).
What about the cost of living differential among the states? A majority of salaries are factored with cost of living in mind for that particular state. It's more expensive to live in New York and California for example.
Compared to other countries, the U.S. wage cap is 2.9 times the average U.S. wage, while the average OECD country sets its comparable limit at 1.9 times the average wage. Our cap is already the highest as a percent of wages than other countries.
Eliminating the cap would repeal the link between taxes paid into the system and benefits received. This would cause Social Security to come closer to resembling a redistributive welfare program instead of an earned entitlement program.
Making Social Security more like a welfare program than a social insurance program is a bad idea.
I am amazed.
SS SECURITY AND MEDICARE PROGRAMS DO NOT PAY FOR THEMSELFS
Medicare revenue is only 1/3 of its spending. This is not insurance programs these have morphed into welfare by the federal government
Yes means test
Yes raise the retirement age
Yes raise the payroll tax
To make thes programs whole
And make sure only the real disabled get on the program before retirement
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
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.
A 12% tax hike is just what the doctor ordered. It will help pay for the only successful Obama job program: SSDI.
How does rasing the cap on Social Security help Medicare? That makes no sense.
Here is a good article on the topic:
http://www.economics21.org/commentary/wh...
It says in its conclusion: "even a large and economically painful cap increase would only modestly reduce Social Security's future financial shortfalls"
This idea is not taken as a seriouis valid policy idea in DC.
It is just a kool-aid idea to keep the lib troops in the streets distracted with such nonsense.
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.
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
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.
I have no issue with raising the cap on contributions based on income, however if you do so, you must completely eliminate the cap on potential benefits as well, so the payout is comensurate with the amount paid in. Or, as Carmine suggested, give us the option of investing our own money.
KISS. Raise the qualification age incrementally over time and insure SS payments are not exempt from income taxes. With a progressive tax code, the well off will inevitably return some of it back to the government.
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.
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.
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.
I would favor doubling the cap on Social Security. I also would favor taxing 100 per cent of all Social Security income. It make sense. If you invest in a stock and sell it at a profit, you pay tax. Why not the increase on your investment in the Social Security?
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.
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.
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.
Gary......Great letter, spot on!
YES, we need to raise or eliminate the cap on
Social Security.
That's the only fix needed.
And republicans are the last people on earth to
listen to about Social Security.
WE DEMOCRATS CREATED SOCIAL SECURITY!
And we must not raise the age for Social Security
because that will only hurt the low income
workers who do all of the heavy lifting.
Fat, lazy republican blow-hards don't understand
that and don't care about low income workers
anyway.
And the dumbest and most laughable idea from
republicans is to opt out of Social Security.
Of course that hair-brained idea will destroy
Social Security.
This is why smart people never listen to
republicans.
LIVE BETTER/WORK UNION!
And smart people never vote for republicans.
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".
Raise significantly, but not eliminate, the cap. No to means testing. People paid into this program all their lives with expectations of the funds they would accrue in retirement. Its not fair that people who worked hard and saved, like they should, would be penalized.