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The whole point of social security is that it is a social insurance program. It's funded out of workers wages, and paid back to workers in proportion to what t

by hapless 11y ago

The whole point of social security is that it is a social insurance program. It's funded out of workers wages, and paid back to workers in proportion to what they paid in. If you remove the cap on social security contributions without removing the cap on payouts, how is it anything but a special surcharge on people who earn money from wages?

toomuchtodo 11y ago
> If you remove the cap on social security contributions without removing the cap on payouts, how is it anything but a special surcharge on people who earn money from wages? I never said it wasn't. I can hardly shed a tear (for myself included) for anyone making over $120K/year who pays an extra few percents of tax on income to prevent elderly poverty.
- s_q_b 11y ago
  I'm coming to appreciate the plight of the middle class at this point. How the hell am I supposed to put away enough savings for a house, retirement for two, and college savings for 2.5 kids? Between myself and my girlfriend, "household" income is around 200k. I should be exactly the person opposing these tax increases. I'm squarely in the white, male, 95% demographic. Yet, the more I look at the financial figures for the total population, the more I realize how lucky we really are. I can't conscionablely oppose paying more in taxes. I just wish the system of expenditure was more rational.
  - deleted 11y ago
    [deleted]
  - toomuchtodo 11y ago
    > Yet, the more I look at the financial figures for the total population, the more I realize how lucky we really are. I can't conscionablely oppose paying more in taxes. I just wish the system of expenditure was more rational. We agree on this.
- hapless 11y ago
  I am not opposed to the tax rises needed to make social security more effective, but if benefits won't be tied to wages, why should funding come out of special surcharges on wages? If we're going to break the logical connection between the wage surtax and social insurance, let's end the surtax and move social security obligations and funding into the regular budget, so that ALL sources of taxation are used to fund SS.
dragonwriter 11y ago
> It's funded out of workers wages, and paid back to workers in proportion to what they paid in. No, its not. There are "bend points" where the ratio of earnings to benefits is reduced. (The benefit is 90% of average indexed monthly earnings up to the first bend point, plus 32% of AIME between the first and second bend point, plus 15% of AIME above the second bend point.) > If you remove the cap on social security contributions without removing the cap on payouts, how is it anything but a special surcharge on people who earn money from wages? Since the cap on contributions is a per-working-year cap and the cap on payouts is a maximum limit applied after the formula aggregates the lifetime earnings, there is no strong relationship between the two caps. OTOH, you could uncap both annual contributions and benefits and you'd still improve the health of the trust fund, just not quite as much as you would if you uncapped only annual contributions, so if that's the only objection, go ahead and uncap both, with or without adding a third bend point.

by hapless 11y ago

toomuchtodo 11y ago

> If you remove the cap on social security contributions without removing the cap on payouts, how is it anything but a special surcharge on people who earn money from wages? I never said it wasn't. I can hardly shed a tear (for myself included) for anyone making over $120K/year who pays an extra few percents of tax on income to prevent elderly poverty.

s_q_b 11y ago
I'm coming to appreciate the plight of the middle class at this point. How the hell am I supposed to put away enough savings for a house, retirement for two, and college savings for 2.5 kids? Between myself and my girlfriend, "household" income is around 200k. I should be exactly the person opposing these tax increases. I'm squarely in the white, male, 95% demographic. Yet, the more I look at the financial figures for the total population, the more I realize how lucky we really are. I can't conscionablely oppose paying more in taxes. I just wish the system of expenditure was more rational.
- deleted 11y ago
  [deleted]
- toomuchtodo 11y ago
  > Yet, the more I look at the financial figures for the total population, the more I realize how lucky we really are. I can't conscionablely oppose paying more in taxes. I just wish the system of expenditure was more rational. We agree on this.
hapless 11y ago
I am not opposed to the tax rises needed to make social security more effective, but if benefits won't be tied to wages, why should funding come out of special surcharges on wages? If we're going to break the logical connection between the wage surtax and social insurance, let's end the surtax and move social security obligations and funding into the regular budget, so that ALL sources of taxation are used to fund SS.

dragonwriter 11y ago

> It's funded out of workers wages, and paid back to workers in proportion to what they paid in. No, its not. There are "bend points" where the ratio of earnings to benefits is reduced. (The benefit is 90% of average indexed monthly earnings up to the first bend point, plus 32% of AIME between the first and second bend point, plus 15% of AIME above the second bend point.) > If you remove the cap on social security contributions without removing the cap on payouts, how is it anything but a special surcharge on people who earn money from wages? Since the cap on contributions is a per-working-year cap and the cap on payouts is a maximum limit applied after the formula aggregates the lifetime earnings, there is no strong relationship between the two caps. OTOH, you could uncap both annual contributions and benefits and you'd still improve the health of the trust fund, just not quite as much as you would if you uncapped only annual contributions, so if that's the only objection, go ahead and uncap both, with or without adding a third bend point.