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April 17, 2015

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Letter to the editor:

Social Security cap may not help much

Gary Musser’s letter to the editor Wednesday (“Eliminate the cap on Social Security”) suggests we eliminate the cap on Social Security. Think for a moment, is this really the solution?

If wages above the cap were taxed, wouldn’t those people be eligible for increased Social Security payments? And if they were, would the new revenue really be enough to fund Social Security significantly longer than current projections? Or do the proponents of this solution wish to keep benefits capped at certain income levels?

Revenue and spending form the basis for the overall debt of the country and the status of the government’s annual budget (or ongoing funding resolutions). Revenue was raised in several forms over the past few years, including Obamacare taxes and the 2012 tax changes. Spending reductions were agreed to in 2011 in what is being called the sequester.

For Social Security, the use of the increased revenue in relation to those who pay it needs to be clarified. These details are needed to determine the true impact of this change on Social Security funding. For the debt issue, both revenue and spending should be addressed at the same time by our elected officials so there is a greater hope the agreement will provide the path to a balanced budget and economic stability.

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  1. Clearly, if Americans want the federal government to continue to spend like it currently does, 'some' group of Americans are going to have to pay higher taxes.

    You cannot tax the 'rich' enough to make up the deficit and pay down the debt and as the writer points out, raising or eliminating the SS cap without also limiting what the better off among us can get back in SS will not solve the problem.

    Personally, I think we need to fix the tax code so businesses and the wealthy cannot so easily escape taxes. If that were done, businesses and the wealthy might care more about government spending and all the waste and fraud in government programs.

    We also need term limits, public financing of campaigns and lobbying reform. Without those, no matter what reforms might be passed, businesses, the wealthy and other interest groups will just manipulate the corrupted system in Congress to place new advantages for themerlves into legislation and tax law.

    The way Congress currently works, real reform is blocked by those that currently benefit from the status quo and even if reform is enacted, it is soon undone by the same powerful interests with lobbyists. Until we stop that, we can't make any real or lasting progress.


  2. Increasing the cap on earnings is a tax increase on the rich. Pure and simple. With no proportional/reciprocal gain in return except to bail out the persons who mismanaged the fund over the years. By the Trustees own findings and conclusions, it will be bankrupt in 2033 at the current rate. If the President is concerned about a legacy, he and his team should ensure that Medicare, due for bankruptcy in 10 years, and Social Security are both solvent for the generations of Americans to come. Clock's ticking and President Obama is burning daylight on his final term.


  3. AARP has noted that, historically, Congress has set the cap to cover 90% of wages paid. Because more wage increases have gone to highly paid workers in recent years, that number has fallen to 84%. Restoring it to 90% would cover 36% of the projected shortfall according to AARP.

  4. Sorry Jim, I don't trust the AARP analyses. It's political not factual. Events and circumstances change. Most notably, more and additional higher taxes are imposed on employees earnings and employers contributions over time [LIKE MEDICARE and HEALTH COSTS] than the SS wage cap limitation. The AARP MUST, if it wants credibilty, look at not just the wage cap in isolation. But all tax/withholdings on wages in total.


    BTW, how many actuaries does the AARP employ permanently on staff for the purpose of their ridiculous analyses? That's what I thought: None.

  5. As the middle class sees it's wages stagnate while the top earners make more it is logical to me that the cap be raised to keep pace with the income gap. It is not "the" solution, but a part of the total solution. Most top income earners are not going to be dependent on Social Security in the first place, but my premise is that if you work, then you pay into SS no matter how much you make. By capping at 106k it only provides the wealthy with another "free ride" pay increase that they really don't need.

  6. CarmineD sez "It's political not factual". Well Carmine, your opinion is certainly political and not factual. The study is based on information from the Social Security Administration which, as you know, employs actuaries for their "ridiculous analyses".

    If you ever get curious or open-minded, you can look it up yourself.

  7. I agree with the letter writer. Many high wage earners already will not qualify for portions of Medicare and SS they already have paid into. And many invest the money they make to plan their retirement so they can be at the lifestyle they have worked for. By contrast those who save nothing and depend on SS entirely will have free medical, reduced housing, free food, heating, along with the SS check to live on. Seems pretty fair for those who did not want to sacrifice to save for their own future. I am not saying cut them off but they can't expect much more then that.
    These are not middle class people, the middle class, IE, union and government jobbers get pensions, healthcare and of course the SS check based on that high pay, which is near the cap and investment income on what they saved from their high paychecks thru out the years.

  8. If we eliminate the cap on social security the letter writer is correct it may not help much,but it would help some.There are currently 1.7 million Americans currently collecting social security disabilty benifits.Of this amount it is said that up to $11 billion each year is paid out to people who are no longer disabled.Our own govt. owes the social security trust fund $2.7 trillion in IOU's.If we took everything into account and worked on correcting the problems,social security should be fine for the next 75 years.There is not just one solution.We have many areas to be looked at, and addressed.

  9. Good article in time magazine about one phase of these predatory market riggers who are posting today.

  10. Various studies including a recent one from the AARP show that removing the cap on earnings would fix 75% to 80% percent of the SS funding problem. Thi,s in conjunction with a slight increase in the SS tax rate, would fix the entire problem. Yes, this is another tax on the rich. But without the "poor" would there still be that many rich? The likelihood of reigning in special interest tax breaks is slim so this is yet another way to close the loopholes. One issue that seems to elude many of us is that we continue to define the rich in terms of income. In reality, the rich in America have amassed immense wealth with the top 5% of our population controlling at least $45 trillion of a combined total of $65 trillion.

  11. @petef.....I must have signed up for the wrong Social Security 'cause I ain't gettin' no free stuff. My medical costs include the Medicare premium, supplemental and meds; housing, I'm lucky as I own my property and airstream outright but I do pay taxes on those; free food, last i looked Winco and Costco weren't giving it away; heating? Propane and the PUD take a bite although now that spring is on the way it will get easier plus next winter I should have the yurt erected and a wood stove. Your comments are uninformed at best and fabrications at worst.

  12. tell him pat !

  13. "The study is based on information from the Social Security Administration which..." Jim Weber

    You said AARP uses the Social Security information. That's proof positive that it is trustworthy. Surely you jest. Have you ever dealt with the Social Security Admin. Have you ever visited it in Baltimore Maryland? Let me guess: No to both. Because had you done either or both, you would never use it as source of validation for any information it has or uses. That's why the Trustees have the job of oversight, not SSA workers.


  14. "The Board of Trustees currently consists of 6 members, 4 of whom automatically serve by virtue of their positions in the Federal Government. These 4 are the Secretary of the Treasury (the Managing Trustee),
    Secretary of Labor,
    Secretary of Health and Human Services, and
    Commissioner of Social Security

    The other 2 members are appointed by the President and confirmed by the Senate. These 2 members serve 4-year terms."

    Tell us Jim what other Federal agency has TOP LEVEL non-agency employees primarily responsible for it's money management?

    Take your time...don't rush with an answer...think about it carefully. And in a couple of years let me know what you find out. Just don't make it too many years, because the SS Fund may be insolvent by then.;-)


  15. CarmineD

    I'm sure you can pull data more satisfying to your point of view from the same place you usually go to get your numbers.:-)

  16. It's all about HOW MUCH free stuff do we give those who refuse to work? Some get SS coverage at the minimum benefit levels because they collect welfare for years and years when their kids are under 18. So we should encourage this by giving them more SS benefits than they earn? We keep giving SSI and SSDI to those who have not yet earned 40 quarters, including to ILLEGALS and those who steal identities. Figure out how to insist the government root out some of the abuse and fraud and we can significantly cut costs. But then again, SS coverage is probably a lot cheaper than putting more "low income" seniors into nursing homes and assisted living--and then we call it "health care" and dump the costs into Medicare and Medicaid.

  17. More slaps at the "Takers" - those who take more from the Federal government than they will or have paid.

    Anybody have a solution to the problem of the "Taker" STATES? Those which receive more from the Feds than their residents initially pay. Those "Taker" states are in the majority!

  18. "CarmineD

    I'm sure you can pull data more satisfying to your point of view from the same place you usually go to get your numbers.:-)" Jim Weber

    As long as it is authoritative like the Trustees, and not made up like like AARP.

    Note that the Trustees never, NEVER, [did I say never], get into the politics of how to sure up the Fund, like AARP does. It's not their purpose. The Trustees are auditors and report on the facts and findings with their conclusions on the health and well being of the Fund. Every year. The rates and amounts of what is paid into the Fund and the rates and amounts of what is paid out. Plus forecasts for the future of the Fund based on the trends.

    That's the difference between politics [AARP] and monitoring. The former is biased the latter is factual.

    President Obama has an opportunity to "fix" Medicare and Social Security and have a permanent legacy. Simpson Bowles gave him the blueprint. President Obama "TASKED" them to do it. What on God's green earth is the President waiting for?



    PERIOD!" Teamster

    The US has no choice. People live longer now than in 1933. Get over Teamster. Things don't stay the same. They change. We have to change too or we'll die broke by not trying.


  20. @wharfrat:

    It sounds like I signed up for the same Social Security as you!!! I used to get a subsidy for my rent because at the time my monthly income from my job was about $700-800, but once I started getting SS - BAM!! My income from my job is about half of what I used to make because of the IRS and I now pay market rate for my rent!! I am no longer eligible for any freebies!!! Anywhere!!! Oh wait, I'll take that back. I get Patient Assistance from the drug company for one of the meds I take. If I didn't, I'd be paying $250 a month for the drug.

  21. Just to clarify who is a "taker". Everyone who takes an "entitlement" called a "tax expenditure", which includes loopholes, deductions, subsidies, tax deferrals, grant programs, bailouts, etc. These are revenue losses to the government coffers through tax expenditures policy/programs.

    The "tax expenditures/entitlements" for 2012 totaled $1.3 trillion in decreased revenue to the federal government.

    Many people seem to qualify as a 'taker', some more than others, especially the wealthiest individuals and corporations.

    The Social Security tax seems to be revenue without benefit of a "tax expenditure" status, except for those who earn beyond the cap.

  22. Teamster:

    You don't design a retirement system based on the persons who are likely to die before the average life span of the working society. If so, we would have people retire and collect at 30 years old. Then you can raise the cap to infinity and it would not be enough to meet the payouts.

    On the same hand you don't use the Social Security rules in effect in 1933 in 2033. The world changes and everything else MUST change with it. Surely someone like you who is a proponent of sun solar heat, windmills, green algae energy and electric cars doesn't need me to remind him of that.