SS impact; CBO: >50% of tax rcpts needed just to pay interest on debt by 2028

[donheff]

You can raise the benefit cap too. Those people are still going to be past the second bend point, so there will still be excess revenue from their payments into the system. Heck, you could make a third bend point and make the percentage 5% above that. No one really understands bend points anyway.

LOL. I think I tried to make sense of bend points once and wrote it off as a black box.

 

[pb4uski]

....Also, remember that one general pillar of support for SS is that there is a link between what someone pays into the program and what one received, that it isn't a welfare program. Raising the cap on the tax side without raising it in the benefit calculation erodes that support. ...

+1 I would prefer to significantly increase the cap, let's say double it.. and create a thrid bend point so those who pay more get at least a little something out of thos additional taxes and it doesn't turn SS into welfare.

 

[donheff]

FWIW, I'm quite far from a "soak the rich" mentality having posted here many times on the shortsightedness of that approach. (And being among the rich myself). But to me, this is more like the current graduated income tax, where high earners are taxed more yet receive no greater benefit. If the system is so much at risk that everybody is going to be hurt, it seems to me that removing the cap is a logical option.

The rich would pay more, as usual, with everybody benefiting. IMO, whatever calculations are currently in use are not necessarily sacrosanct.

+1 I'm rich too, by many standards, and I never objected to paying higher taxes and worried when Congress kept cutting my taxes and spending away on wars, et al, driving the deficits into the stratosphere. Some of us denigrate those progressive taxes as socialism. Others of us see them as building a more equitable and peaceful society. As a relatively rich guy, I think I benefit way more from a stable society fostered by the touch of socialism embodied in a progressive social security system, universal health care, public schools, and the like, than the people at the bottom do from the paltry safety net benefits we trickle down.

But, darn, I wish I could do Roth conversions cheaper.

 

[scrabbler1]

I'm going to leave it here because I'm obviously missing something. If, as you say, we pay into the welfare system with the highly unlikely event of benefiting from it, why not eliminate the cap, stabilize the system and have the high earners receive their standard benefit at retirement time?

FWIW, I'm quite far from a "soak the rich" mentality having posted here many times on the shortsightedness of that approach. (And being among the rich myself). But to me, this is more like the current graduated income tax, where high earners are taxed more yet receive no greater benefit. If the system is so much at risk that everybody is going to be hurt, it seems to me that removing the cap is a logical option.

The rich would pay more, as usual, with everybody benefiting. IMO, whatever calculations are currently in use are not necessarily sacrosanct.

Also remember, unlike the welfare system, that SS replaces a smaller percentage of high-income earner's earnings than it does for lower income earners (there are those pesky bend points again LOL). So, it already disadvantages higher income earners. Raising the cap on the income side without any changes to the benefit side creates a zero bend point, exacerbating this disadvantage. Yes, there could be an extra bend point whose top income amount matches the new income cap, and I would be open to that possibility as long as it isn't some trivially low amount like 1% (the third bend point today is 15%).