quote:Next (Social Security) will NOT be around much longer to collect.
For starters, please view this link:
http://www.ssa.gov/qa.htm
It reports that even with NO CHANGES, SS will remain exactly as it is until 2041.
And it goes on to say that after that date, benefit reductions of about 22% would kick in. And if still no changes are made, benefit reductions will rise to 25% by 2082.
Those dates are determined by actuarial methods that some have said are overly pessimistic.
Most discussion on how to 'save' SS centers on cutting benefits, or raising the SS tax rate. These actions (IMHO) are designed to be "feel bad" emotion drivers that are being pushed by those Wall Street interests that wanted to gain control of the SS billions. Now that Wall Street has lost its glamour, you don't hear much talk about diverting the funds to those now-proven-overly-greedy-and-dishonest bastards. Just wait a few years and THAT scam will again pop-up its ugly little head.
The one method (again, IMHO) that will correct the projected SS shortfalls is to remove the cap on the wages subject to SS taxes.
WHAT, RAISE TAXES!!!!!??????
It is a raise in the CAP, not the TAX RATE.
For those of us making less than the cap (currently,$104K) there will be NO CHANGE in our SS taxes or the SS taxes paid by our employers. That, I believe, will include the majority of us who are workers and those of us who are employers.
For those above the cap, yup, you'll pay more taxes as will your employers.
HOW that increased revenue is used has many options: leave benefits the same, increase benefits, sliding scale of increased benefits.
Bottom line is just that one change, that will affect not too many of us, saves the system for all of us.
For a more in-depth look at how to balance SS, go to this link and click a couple of links to download a pdf report, dated February 2005.
http://tinyurl.com/bbaooq
Here is just an excerpt:
Raising the Tax Cap
The maximum wage base for paying Social Security taxes is $90,000 in 2005. Only earnings
up to $90,000 are taxed and counted toward workers’ future benefits. Currently, 6
percent of all workers earn more than the cap. Earnings above the tax cap now account for
15 percent of the aggregate pay of all workers who pay into Social Security, and are expected
to rise to 17 percent of aggregate pay over the next decade (OCAct, 2005b). The
current benefit for one who always earned the maximum amount and retired at age 65 in
2005 is $1,874 a month, or about $22,500 a year.2 The benefit replaces about 25 percent
of the worker’s taxable earnings (OCAct, 2004).
Option #1
If all earned income above $90,000 a year was taxed, but those earnings did not count
toward benefits, Social Security would be solvent. Making this change in 2005 would bring
in enough revenue to remedy 116 percent of the financing shortfall over the next 75 years.
With this change, workers who earn far more than the tax cap would pay considerably more
in taxes. For example, a person making $400,000 a year would pay $19,220 more and his
or her employer would pay a matching amount, for a total increase of $38,440. The
maximum benefit would be no higher than under current law. Ever since Social Security
began, the level of wages that are taxed has been linked to the level of wages that count
toward benefits. This proposal would break that link.
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Yes, SS will face some funding issues. But the sky isn't falling quite yet
Larry