Most Americans are willing to endorse painful steps to ensure Social Security's long-term solvency -- steps that nick the rich, that is.Lest we miss the point at hand, let me underline a key sentence from this story: "Now, earnings above $90,000 aren't taxed."
Two-thirds of those surveyed by USA Today/CNN/Gallup say it would be a "good idea" to limit retirement benefits for the wealthy and to subject all wages to payroll taxes. Now, earnings above $90,000 aren't taxed.
But some ideas that President Bush said in his State of the Union address were on the table are rejected by solid majorities. By 2-to-1, Americans oppose reducing retirement benefits for those now under age 55. Nearly as many say it's a bad idea to increase the retirement age, and 57 percent are against reducing benefits for early retirees.
In other words, a person with annual wages of $489,000 and a person with annual wages of $90,000 pay the same Social Security payroll tax -- roughly $5,580.
In pushing for the elimination of this payroll tax ceiling, Democrats could argue that: 1) this change would significantly extend the long-term solvency of Social Security, and 2) this change makes the tax much fairer -- everyone pays on every dollar he or she earns. Wouldn't it be nice to see the Dems in Congress support good reform, not just the status quo?
David at the blog BlueMassGroup supports a hybrid approach (which I find quite appealing). His approach raises the SS ceiling to $200,000 while lowering the payroll tax from 6.2% to 5.5%.* David explains it all in this post from last week.
*-Altogether, FICA is a 7.65% wage tax. Of this, 6.2% is the Social Security portion, and the remaining 1.45% is the Medicare portion. The $90,000 ceiling applies to the SS portion only. The Medicare portion is paid on every dollar that is earned within a year's wages.
0 comments in Not to Gloat or Anything, But ...
Post a Comment