Nancy McDonald from Wilmington, Delaware
(CNN) - Nancy McDonald from Wilmington, Delaware asks: "We all know that social security is running out of money. But people who earn over $97,500 stop paying into social security. What's up with that?"
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Why should the person with top income,be exempt from paying into social security?
While there is no logic behind it, it emphasizes social and economic inequality. A more reasonable, fair approach to government needs would consist in continued payment of the higher income people to the point where the countries needs are met by these payments.
I would strongly support the candidate who pledges to eliminate the taxes on Social Security Income (SSI).
This tax was imposed twenty-four years ago and was never inflation-indexed; in other words, a married couple is still considered wealthy when their income reaches $32,000!
When originated, the Act specified that SSI was to be non-taxable income!
To clarify, EVERYONE pays into social security. If you earn over $97.5K, only your earnings up to $97.5K are taxed (yes, taxed, because you'll never see social security if you are paying and in your 30's). Earnings above $97.5K are not subject to social security withholding.
ppl with the most money are the ones with the most contributions. And they KNOW it is cheaper to make one to a politician than with each paycheck, make one to SSI. This problem should be corrected.
Keep in mind that social security is NOT welfare. If the rich pay more into the system, then they should a proportional amount more. The US already has numerous other methods to redistribute wealth....
It stands to reason that equal treatment should be applied equally across the board. Thus all income earners should have their income taxed for social security 100%.
Besides applying equal justice and treatment to all, it would most definitely solve and thereby make solvent our social security fund. Furthermore the government agencies who drop IOU's in the funds' coffers should no longer be aloud to tap into it.
One of our biggest civil rights' violation is the unequal treatment of our economically deprived citizens versus the privileged ones.
Ironically they are more numerous but can't seem to achieve any status due to that economically deprived position.
Not one of the candidates before us is part of that group and that's where the difference lies thus making the goal of equal payment for all fails since they have no representation.
All the candidates before us are looking no further than their own agenda, to promote their own goals and
whose interest is nothing but themselves. And they ask why the apathy? while this all is not printable, it explains why talk is cheap. It doesn't take a rocket scientist to know or a statistician to realize that if everybody paid equal taxes, there would be no lack of solvency in the social security fund.
If a $50,000 earner pays 100% social security tax on 100% of his income, then equality calls for identical treatment of all its citizens all the way up the line. If you differ in opinion, you can go back to your place of origin because that's not what America stands for. That's why we do not have class distinction and we are all equal. Isn't that the American way?
Are you aware that if you work for the government (ie even at city levels) you do NOT pay SSI? My mom recently got a job working for a city government and was pleased (although I was dumbfounded) to find that she does not need to pay SSI. When given out, it is not limited to those who don't work for the govt, so I think this is absolutely ridiculous that they don't have to pay when everyone else does.
People don't pay into social security over 97.5K because they don't receive benefits past that point. Economic equality is a separate issue and if you feel the wealthy don't pay enough, then you can debate the marginal federal tax rates. However, social security is not income redistribution or charity and taxing people at 6% no matter what they make defies all logic.
From some of the comments, it appears some think SS Benifts are the same as "welfare"? Only "Posted By Ernest Belden : July 23, 2007 10:55 pm" has the right idea. Elimate the cap of $97k so all wage groups are included and then limit base entitlements payout instead.
MJP writes: "The US already has numerous other methods to redistribute wealth…."
Well, to redistribute wealth from the poor to the rich, yes. Discriminatory tax rates which are far lower for investment income than earned income, massive government handouts to extremely rich corporations, heavy funding for the parts of the legal system used by the very rich (but not for the parts used by the poor), etc.
To redistribute wealth from the middle class to the extremely poor, there's taxation and the minimal social services net.
To redistribute wealth from the genuinely rich to the poor? Well, we used to have progressive income tax, but that is no longer really true at the top end. We still have estate tax, but not much of it.
While I agree in principal with the sentiment, and I by no means make anywhere near 97k a year.. Why should someone who worked to get where they're at have to pay for someone else's future? Kinda that whole "those with ability will be punished for those that are weak" eh? James Taggart and friends anyone?
Jessica from Northern California, I don't know which city organization your mom works for, but I work in government also, and I *do* have to pay SSI withholding. It's not an option.
I also agree that if one has to pay on 100% of their earnings (provided those earnings are less than the current cap), then all should have to pay on 100% of their earnings.
I never have been fond of this "cap" that gets put on taxes... it should be flat rated, regardless of how much you make.
This year there will be a Social Security surplus of almost $400 Billion dollars. And that is without earnings over $97,500 being taxed. The problem is not the tax, its the fact that our Social Security Tax Revenues are not saved! If we increase the level of taxable income, we are increasing the surplus that will be spent by the government. Each year there is a surplus, and each year this surplus is spent. If the government would save the surplus we would not be in this mess. I think the general public is not aware of this, otherwise we would be more concerned with where our Social Security Taxes are going rather than how much the "well-off" pay in taxes.
When it comes to Social Security there is one defining difference between Democrats and Republicans. Democrats are for higher taxes to support Social Security, although they themselves invest separately and do not depend on it for their personal retirment. Republicans are for allowing individuals accounts and giving the people the freedom to invest their Social Security benefits in way they deem best, which is also how they themselves handle their person retirement accounts...that sounds like an equal playing field to me.
I don't think any of them adequately answered this question
Since your Social Security benefits are supposed to correspond to the amount you have paid in, having people who earn more than $97.5k continue paying in is not necessary. Their contribution should allow them a livable income in their old age. That was supposed to be the point of Social Security anyway.
Maybe it's because they already paid their fair share, or didn't that occur to you? When is enough enough?
One point that Nancy from Delaware seems to forget is that everyone receives the same amount from social security when it's actually distributed (taking into account, of course, age, disability and other factors that determine total social security benefits). It's not as if those earning above $95K are getting a disproportionate share of social security, and I bet that most of them – on account of the fact that they probably have 401(k)s and other private savings plans – probably will not even need their social security.
Nancy got it RIGHT!!! It is high time for ALL people who will benefit from Social Security to contribute based on all of their earnings. I say that as one who now exceedes the $97,500 cap. there should be NO cap. Chuck in VA.
Re: posted by Jessica, northern California...You’re wrong about government employees collecting without having contributed. For example, I’m a federal employee since 1971 and do not pay into Social Security. I do contribute 7% into a pension plan and will NOT be eligible for SS (employees like myself have, however, do have 1.4% Medicare tax withheld). In fact, if I became eligible for my spouse’s SS benefit upon his death, that amount would be reduced to nothing, or “offset”, by the amount of my monthly pension. A change in the federal pension system was enacted in 1984; employees now pay into SS and an additional 1.5% payment into the federal pension. This was done, in part, to make retirement benefits more “portable” and enable people to change jobs without worrying about their ability to earn 40 quarters. Employees like me had the option of converting from the old system to the new. Bottom line, if you don’t pay SS tax you don’t collect benefits.
I'm not sure the person asking the Youtube question, as well as a few people who have commented here, understand how Social Security works.
There is a cap on SS payments later in life, which is why there's a cap on how much you pay in. You're SS income post-retirement is based on your payments during YOUR working life, not some pool that's evenly distributed amongst everyone receiving SSI.
This matter is blown out of portion by many and is very easy to solve. Some asinine politian is sitting in an elaborate corner office thinking of ways to divide and multiple funds he do not even pay into. We are fighting a no win situation here, when it comes to capital hill. If you do not work, you do not benefit from SSI. That may come across harsh for many and it should. It's either you pay for what you want or you get nothing at all. Only common logics are needed to do the job of many. Think about, the states would run very smoothly if we did not have to side with a particular side (Democrat/Republican) We all have different view as to how this should be done. Not all Republicans agree with other Republicans and vice versa. So why can't we as Democrats and Republicans get along and do the right (fair)thing?
"...But people who earn over $97,500 stop paying into social security. What’s up with that?”
This is actually an incorrect statement. all dollars are subject to social security withholding up to a maximum amount. This means that all the dollars equalling $97,500 were subject to social security. Only the dollars over the amount of $97,500 are not subject to social security withholding.
If a person makes $100,000 only $2,500 of the person's income is not subject to social security withholding.
By the way, the more you pay into social security the more you draw out at retirement. It's based on a point system.
Economics 101 FTW.
Since there is a cap on how much SS you can receive when you are eligible, there definitely should be a cap on the amount of earnings subject to the tax. Otherwise, everything in excess is going elsewhere. That is why some people get $500 per month and other get $1000 and others get $1500, etc. It is based on how much you earn. They CAP the benefit. Besides,$97,500 gets you no where in a big city, so do not think this is a lot of money.
The S.S. is very much understood. Granted people do not contribute above the cap, the benefits they recieve are the same as one who pays the max.
For the 7% gov employees pay in results in a much better payout than the 12% S.S. does. The more you pay in gets you a smaller % than one who pays in minimum in many cases.
Why do members of Congress get full benefits despite not having paid in?
Oh they make the rules.