Another Article On Social Security Running Out of Money

[pb4uski]

Yes, please.

 

[Blue Collar Guy]

Yes, please.

Thanks for piling on, nothing like kicking a man when he is down.. Ill delete the post.

 

[pb4uski]

Well, do an Advanced Search for posts by Blue Collar Guy with the word "Nobel" in the post and you'll see 5 posts over the last 4 days.

When you post an idea so many times and someone doesn't jump on it and say "great idea"... take the hint.

 

[Koolau]

The only thing wrong with this idea is that it severs the tenuous link between the cap on SS benefits and the income cap on SS taxes. The same cap which prevents Bill Gates and Michael Jordan from receiving $1M(?) a year in SS payments keeps them from paying too much in SS taxes. Raising the income cap without raising the benefit cap begins to turn SS into a welfare program, not an income replacement program.

As was pointed out earlier in this thread, SS already replaces a lower percent of income for higher-income wage earners, but at least it replaces some percentage of wage income for each dollar of income subject to the income cap. Raising the income cap without raising the benefit cap basically tells those higher income people, "Thanks for the extra FICA tax dollars, but screw you when it comes to collecting any extra benefit dollars as a result of it!"

If the cap was removed and the high earners also got big SS checks, the program would still make a huge net gain. This is due to the low, low replacement rate for high earners (i.e. SS is a "bad deal" for high earners.). And I suppose this change could also be seen as reinforcing the link between earnings and SS benefits, diminishing the perception that is welfare. In actuality it is a big transfer of wealth from young to old and from high earners to low earners. There are societal benefits and pitfalls to this, but that's the math.

The other issue is that there aren't really all that many folks at the "top." I don't have the numbers but I'm sure we could look them up. No doubt raising the cap (or removing it) would bring in more money to the system. Still, if you want a "lot of money" you have to take a little from a lot of people, not a lot from a few.

The other issue is that you begin to alter folks willingness to accept their wages in the current form. How many discussions have we had here about saving a few $K through playing the tax code. Folks making a million dollars must be pretty smart (or darn lucky). Smart people quickly figure out how to beat the changing tax codes. If they're really smart, they hire folks to beat the tax system for them.

Since I haven't attempted to put numbers to this argument, I will understand that YMMV.

 

[Helena]

Thanks for bursting our bubble, I thought we are( my husband at least) is getting a raise this coming year. Something around 2% and Medicare part B is not changed.

That depends on how much you pay for Medicare B. Not everyone pays the same amount and it will be recalculated in 2018.

I posted a topic today about this.

http://www.early-retirement.org/forums/f28/social-security-cola-and-medicare-b-premiums-87728.html


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