Will Congress ever solve the Social Security problem with this easy fix?

Question

Currently, the government charges a 6.2% tax on Social Security, up to the first $94,200 of income. That means that whether you make $94,200, $942,000, $94,200,000, or $942,000,000, you'll only pay $5,840 a year towards Social Security.

Given the shortage of funds and the projection of little or no SS money being available for those in my generation and younger (I'm 25), why doesn't Congress just take off the limit and tax all wages 6.2%? The increase in funds would be enough to save social security and there'd probably be money to fund the healthcare problems too. What do you think?

If EVERYONE had to pay the same 6.2% of his/her gross income, wouldn't that be fair?

Answer 1

For me, it's this simple. This act would require cutting into the pockets of the rich, which fund election campaigns. Whenever the choice is Americans or more money, our government is going to support the rich and their companies. I'm not going to say they don't care about American life and well-being, but they care about the pockets of themselves and their friends more than us.

Plus, the rich will not support a candidate proposing this (for the most part) and that candidate will suffer with election contributions which would degrade his chances of winning. We have to chose between the rich and selfish republicans or the all talk and no walk democrats.

It would be better if we just started supporting other parties rather than these two. That would shake the control of these seemingly opposing parties, which are incompetent at best.

Answer 2

The Social Security trust fund has over 2 trillion dollars in government bonds - and its expected to build up more than 3 trillion dollars more in bonds during the next 15 years. - On paper the system is solvent - at least until 2042 or 2052 or maybe later, depending on how the economy does and how much longer we are living 35 years from now. - So maybe a payroll tax increase sometime around 2042 would be a good thing - but there is no need for it now.

The real problem with social security is that the rest of the government has been borrowing the surplus in the trust fund that was earmarked to help pay for the retirement of the baby boom generation - and the government has been replacing the money with a file cabinet full of IOUs. - Raising the cap on earnings subject to the social security tax would just give the government more money to borrow from the trust fund and not pay back.

A better solution to the problem would be to roll back the Bush income tax cuts which have primarily benefited the rich - and some of the other tax cuts that have been put in place since Reagan - Its fine to increase taxes on incomes over $94,200 (so that the government can pay back what has been borrowed from the trust fund) - but taxes should not be raised only on wages and self employment income. - Currently people whose income comes from dividends and capital gains pay Federal Income tax at a 15% rate, no matter how big the income is - Does that seem fair considering that lowest paid minimum wage worker pays social security taxes at a 6.2% rate and the worker's employer is required to match it? - If the medicare portion of the tax is included the total percent paid by the worker and his employer is 15.3%- less than the rate paid by the person with a million dollars in dividend income.

Answer 3

Unfortunately most of the people making laws regarding the amount of SS income that is taxed are old, rich, and near retirement themselves.

They aren't going to sign a law that would be cutting their own throat (even if they still had plenty to live on - they are just that greedy).

Answer 4

1) Has Congress ever fixed ANY problem?
2) This is not a long term solution as those who pay in more are entitled to higher benefits.

Answer 5

Congress has shown no interest in fixing anything much less social security. Congress is interested in one thing, their power over the American citizens. Anything else is a distant second.

Answer 6

W00t!

Larry, couldn't have said it better myself.