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Removing the income cap is really a clear way to mitigate this problem greatly. From what I understand it doesn't fix it entirely. I wonder if we could put SS

by tibbon 5y ago

Removing the income cap is really a clear way to mitigate this problem greatly. From what I understand it doesn't fix it entirely. I wonder if we could put SS on capital gains, even at 1%. That would help this include investment gains.

BitwiseFool 5y ago
Please, no. Social Security was never meant to be funded this way. It was originally supposed to be paid for by a tax on labor, originally a minuscule at ~3% but now it is around 12.5%. It was supposed to be something that would pay out roughly what you paid in. But now it looks like people want to decouple that aspect of Social Security and turn it into a general wealth redistribution program.
ethbr0 5y ago
Removing the income cap for social security tax ($142,800 for 2021) would be interesting, because that's also the max for benefit purposes [0]. 35 years at max = max social security benefits. [0] https://www.ssa.gov/OACT/ProgData/retirebenefit1.html https://www.ssa.gov/OACT/ProgData/retirebenefit1.html
dragonwriter 5y ago
Applying the full amount of payroll (both SS and Medicare) tax to income regardless of origin, including capital gains (and the both-halves self-employment style to all non-wage income) or amount (uncapping contributions), while also uncapping benefits (but adding additional “bend points” above the current cap so the revenue-to-obligation ratio for high incomes is better) is a great way to secure the programs, increase fairness of treatment of labor and other income, increase fairness of taxation of low vs. high income, and extend qualification for social insurance to people of moderate means but atypical income patterns. But it means that people with disproportionate political clout would be taxed more heavily than in the present circumstances, so it would face an uphill battle.
- candiodari 5y ago
  > But it means that people with disproportionate political clout would be taxed more heavily ... Not really, you could do what the Jeff Bezos does: "0 profit" (by reinvesting everything) and just enough income to live (very well, but still). Meanwhile the stocks he has amass value (and he can trade stocks, which can't be a taxable event if you use the company to do it and "don't do it yourself", for good reasons (for example joint-ventures would become impossible if this were to be taxed)). So you can still amass large amounts of wealth under these circumstances without getting taxed on them. Plus you can cheat by having the business pay for your expenses (and if you live for your job that's not even unreasonable).

by tibbon 5y ago

BitwiseFool 5y ago

Please, no. Social Security was never meant to be funded this way. It was originally supposed to be paid for by a tax on labor, originally a minuscule at ~3% but now it is around 12.5%. It was supposed to be something that would pay out roughly what you paid in. But now it looks like people want to decouple that aspect of Social Security and turn it into a general wealth redistribution program.

ethbr0 5y ago

Removing the income cap for social security tax ($142,800 for 2021) would be interesting, because that's also the max for benefit purposes [0]. 35 years at max = max social security benefits. [0] https://www.ssa.gov/OACT/ProgData/retirebenefit1.html https://www.ssa.gov/OACT/ProgData/retirebenefit1.html

dragonwriter 5y ago

Applying the full amount of payroll (both SS and Medicare) tax to income regardless of origin, including capital gains (and the both-halves self-employment style to all non-wage income) or amount (uncapping contributions), while also uncapping benefits (but adding additional “bend points” above the current cap so the revenue-to-obligation ratio for high incomes is better) is a great way to secure the programs, increase fairness of treatment of labor and other income, increase fairness of taxation of low vs. high income, and extend qualification for social insurance to people of moderate means but atypical income patterns. But it means that people with disproportionate political clout would be taxed more heavily than in the present circumstances, so it would face an uphill battle.

candiodari 5y ago
> But it means that people with disproportionate political clout would be taxed more heavily ... Not really, you could do what the Jeff Bezos does: "0 profit" (by reinvesting everything) and just enough income to live (very well, but still). Meanwhile the stocks he has amass value (and he can trade stocks, which can't be a taxable event if you use the company to do it and "don't do it yourself", for good reasons (for example joint-ventures would become impossible if this were to be taxed)). So you can still amass large amounts of wealth under these circumstances without getting taxed on them. Plus you can cheat by having the business pay for your expenses (and if you live for your job that's not even unreasonable).