I realize that amount will increase a little bit next year, but why is it capped at that amount? Pretty much everybody that makes over $100,000 per year isn't going to miss that amount, while your average minimum-wage worker is going to take a bigger hit, percentage-wise.
WHY???
2007-11-11 16:15:58 · 11 answers · asked by Johnny 3 in Business & Finance ➔ Taxes ➔ United States
Well, this has enlightened me more... But I kind of think there shouldn't be a cap on it, (and maybe lower it from 6.2%) - then we wouldn't have to worry about it running out for a LONG time. And if it did start to run out, the super-super rich would be the ones to have their monthly check decreased. But if there wasn't a cap, I suppose the government would give more of it away to people... Thanks for the answers!
2007-11-19 11:40:04 · update #1
Here is the figure for 2005 returns. May be this will answer your question.
The top-earning 25 percent of taxpayers (AGI over $62,068) earned 67.5 percent of the nation's income, but they paid more than four out of every five dollars collected by the federal income tax (86 percent).
The top 1 percent of taxpayers (AGI over $364,657) earned approximately 21.2 percent of the nation's income (as defined by AGI), yet paid 39.4 percent of all federal income
taxes. That means the top 1 percent of tax returns paid about the same amount of federal individual income taxes as the bottom 95 percent of tax returns.
http://www.taxfoundation.org/research/show/250.html
2007-11-11 16:45:35 · answer #1 · answered by MukatA 6 · 1⤊ 2⤋
The cap follows average compensation rates. It will be $102,000 in 2008. While your average minimum wage worker may pay at a regressive rate, he gets back a much larger percentage at retirement. Benefits are 90% of the first $711 of average indexed monthly earnings 32% of the next $4,288 and 15% of the rest. Average indexed monthly earnings adjusts old year wage rates to compare to the same equivalent now.
2007-11-11 18:10:46 · answer #2 · answered by Anonymous · 2⤊ 0⤋
The cap is what it is because that's what congress passed.
Benefits are based on the amount of social security tax paid in, so if there wasn't a cap, the higher income people would receive higher benefits than they do today.
2007-11-11 16:23:15 · answer #3 · answered by Judy 7 · 1⤊ 0⤋
It has nothing to do with the type of society we live in "Capitalist society or Socialist society" because it is a social program. It has nothing to do incomes or benefits or what other individuals are taxed. It is all about politics plane and simple. Especial if you look at wage earners that are outside of the program--teachers and railroad workers for example.
And don't buy into the argument that the wealthy work harder than anyone else, most of their income is from sources from none wage earning sources--investments. Or they pay more than anyone else--most have their have a large chuck of their income paid outside the US, so they do not have to pay US taxes.
2007-11-11 19:07:24 · answer #4 · answered by oldcorps1947 6 · 1⤊ 1⤋
Because benefits are capped as well.
Will a worker who makes $500,000 per year receive 10 times as much in social security as a worker who makes $50,000 per year?
The answer is no.
2007-11-12 01:53:22 · answer #5 · answered by Anonymous · 2⤊ 0⤋
Sadly, many government benefits and programs favor the rich instead of those that really need it.
A small business has more trouble trying to get a tax break than a huge corporation.
There is really no reason why a person who makes $90 K or more a year should ever collect social security. They have more than enough opportunity to save and live well on what they make after retirement.
Social security was started as a way for poor people to get a little extra for retirement. Not for the rich to spend it at the casino.
2007-11-11 16:29:45 · answer #6 · answered by mslider2 6 · 2⤊ 4⤋
You know what's even worse? When those that make that kind of money don't have the sense to realize that once the year starts again they have to start paying that tax again. A bit frustrating when an employee making $120K starts whining in January that his paychecks are 6.2% less which probably amounts to a lot of employees' entire paycheck! :-/
2007-11-11 19:45:52 · answer #7 · answered by Anonymous · 1⤊ 2⤋
Social safe practices contributions stop once you earn $106,800. The suggestion is to advance that earnings reduce so as that human beings earning above $106,800 ought to pay Social safe practices tax.
2016-10-24 01:58:56 · answer #8 · answered by ? 4 · 0⤊ 0⤋
Because all legislation is a compromise, and that was what was needed to get it through.
It doesn't make any sense to me either. All other tax systems are designed to take more from people with higher incomes or higher assets. (income tax, sales tax, property tax, estate tax, etc.)
2007-11-12 08:26:21 · answer #9 · answered by r_kav 4 · 0⤊ 0⤋
Because Congress has so capped it. Write your senators and congressperson.
2007-11-12 01:54:03 · answer #10 · answered by Anonymous · 0⤊ 0⤋