What is the purpose of the cap on taxing earnings? The worker who makes $100k pays the full amount, while the one who makes $200k doesn’t
What is the purpose of the cap on taxing earnings? The worker who makes $100k pays the full amount, while the one who makes $200k doesn’t
I think the most likely change will be that higher income folks will see 100% of their SS taxed.
The spousal benefit is an interesting issue. My DW w@orked for 20yrs earlier in life but her personal 'benefit' from SS calculates to be a bit less than 50% of my benefit. So when we start drawing SS (numbers now favor both starting at same time) she will get ZERO rerun from her SS taxes over all those years.
A 'quirk' in the system, but a most unfair one IMHO.
Why should there be a spousal benefit at all? If you work and contribute, you should get a benefit based on that. If you don't (i.e. - non working spouse) you shouldn't. So, I'd look at it slightly differently - your wife is getting a free ride for the spousal amount in excess of her own benefit.
Why should there be a spousal benefit at all? If you work and contribute, you should get a benefit based on that. If you don't (i.e. - non working spouse) you shouldn't. So, I'd look at it slightly differently - your wife is getting a free ride for the spousal amount in excess of her own benefit.
It was explained to me that back in the day, one of the purposes of government was to encourage the traditional family profile. Traditionally, wives did not work, certainly those with children did not. Because housewife doesn't 'earn' SS, a method to compensate for that value added to society was created within the SS system.
I don't think this idea would ever get enough votes to pass, from both parties.Be prepared for those with "large" IRA balances, including Roth, to have their SS cut, not just taxed.
I don't think this idea would ever get enough votes to pass, from both parties.
Most likely SS tax will be increased for higher earners, and eligibility age may be lifted a bit too.
Agree and there also should not be availability of multiple ex spouses claiming on the same person.
It's good public policy. I qualify on my own record but my Mom and my DDIL are/were stay-at-home mothers. Imagine the cost to public programs if widows of primary earners got zero or minimal amounts based only on their own work record after the death of a spouse. Plenty out there are already struggling on Survivor benefits (and there are proposals to increase those). In theory, the cost of spousal benefits is priced into the SS contributions.
The reasons for the cap are long and part of a storied tax/political history. I believe the chief argument in favor of the cap is linked to similar caps on payouts. IE, the super high earners do not receive a similar super high SS payment in retirement.
That still doesn't make sense to me. All of us pay taxes for things we don't benefit from.
I pay taxes for schools even though I'll never have a kid in school again. I pay taxes for emergency services, though I hope I'll never need them. I pay taxes for roads I'll never drive on. I pay taxes for libraries but never use their services. Why shouldn't all of my income be taxed even if my own SS benefits are limited?
That still doesn't make sense to me. All of us pay taxes for things we don't benefit from.
I pay taxes for schools even though I'll never have a kid in school again. I pay taxes for emergency services, though I hope I'll never need them. I pay taxes for roads I'll never drive on. I pay taxes for libraries but never use their services. Why shouldn't all of my income be taxed even if my own SS benefits are limited?
Just because you don't utilize those services paid for through taxes doesn't mean your life isn't improved by them.
Why should there be a spousal benefit at all? If you work and contribute, you should get a benefit based on that. If you don't (i.e. - non working spouse) you shouldn't. So, I'd look at it slightly differently - your wife is getting a free ride for the spousal amount in excess of her own benefit.
I have to disagree on this one for the reasons athena53 outlines below. While usually my politics are to the right of Attila the Hun, can you imagine the number of women who would be flat-out destitute without that benefit? And it's not like they're buying new Porches with the proceeds, they're doing well if it covers rent on a low-rent efficiency apartment and groceries. Also, I suspect there aren't that many "multiple ex-spouses" claiming benefits on one guy's SS record. They have to be married for at least ten years to make the claim.
Thanks. The thing I love most about SS is that nearly everybody who collects from it has to contribute to it or be married to somebody who does. If we cut off the spouses, they would simply be added to the welfare rolls. At least with SS somebody had to put some money into the system for a descent amount of time.
Yes, that's my point. Even if I don't use a service directly, paying taxes to support them improves society in general. Paying taxes for social security helps older generations, even if I don't receive payments directly.
It's not like we just kick seniors to the curb (usually) if SS doesn't cover their expenses. Other services like Medicaid and food assistance cover what they can't afford, and someone is paying taxes for those services. I have a feeling fewer seniors would need these services if SS incomes were improved so seniors could retire with dignity.