Bernie Moreno and Elizabeth Warren have a New York Times op-ed proposing to eliminate the cap on Social Security payroll taxes, not the benefit it funds.
Beat me to it. Had a draft written with almost this exact title!
I'd love to know polling results if we were to ask people if they support eliminating the payroll tax cap as long as millionaires get to keep the huge increase in their benefits upon retirement.
Back of the envelope math on the bend points means a lifelong-millionaire retiring this year would receive at around $170,000 in benefits. Up from the ~$48,000 they're eligible for now. Married couples would be a quarter of a million dollars.
"Eliminate the payroll tax cap and have the government write millionaire retirees checks for hundreds of thousands of dollars" can't be too popular.
I think there is a math issue (?). If I’m in the 37% bracket and the SS tax cap is eliminated, my personal taxes would increase by 6.2%, right? The other 6.2% is paid by employer.
Please read: You're right, but for the wrong reasons. Social Security can't ever be "insolvent" because Seniors are now the dominant voting group and are 1-issue voters; but even dictators like Putin rely on public pensioners for their social support! But Social Security ALWAYS was a fraud on all involved. The program NEVER FUNCTIONED from day 1 as an earned-benefits program (it was always a pay-as-we-go public welfare program for seniors (current-worker payroll taxes funded all senior beneficiaries). But not an evil conspiracy. It was the only way in the Depression to pass Congress or be accepted: as is, opposed as socialism (ironically it wasn't, it was public welfare; But TVA, NRA, CCC, etc. WERE pure Socialism! -- gov't employed & managed millions of unemployed to build public infrastructure and provide public services). Also, back then, many of poorest seniors WERE TOO PROUD (or ashamed) to take HANDOUTS! So it was DISGUISED as A PENSION PLAN INSURANCE. And later adding disability "insurance", indexing with inflation, etc. made it even less earned-benefits! The RESULT was a HORRIBLE mish-mash: the first 5 decades, seniors "got back" up to 30 times what the paid in! Could say payroll tax just "transferred" to seniors; but, in a technical sense, workers "invested" in rapidly-growing America's economy by working in it (although most growth, innovation, investment, and exports were confined to a very few industries, occupations, and regions). But what make our public pension program the MOST UNFAIR on Earth is the "reverse Robin Hood" INEQUITIES -- in shorthand, it's dominated by below-average-wage working folk (with the shortest life expectancies from physical labor and poor health care), taxed with no deductions, subsidizing mainly the comfortably retired who least need it (because payouts proportional to last several paychecks! The other nations allow hard labor workers to retire at 55 to 60 and don't rely on the FANTASY of earned-benefits to make determine payouts! Dems dared not try to reform this disaster, for fear GOP will force investing it in the market or make it more unfair!
Insolvency is a question of reality, of having enough revenue to pay the benefits.
Seniors' desires are just that, desires. Desires are not revenue. Social Security is quite capable of confirming to reality in the face of insufficient revenue, regardless of how seniors vote or what they want.
Uh, Seniors when they had a much smaller share of voting over 50 years ago always got every change (i.e., freebee) they asked for (even when minimal inflation didn't didn't kick in the senior COLA, they demanded it anyway! Trump made sure that seniors were showered with new benefits, such as much higher tax exemption for earned income as well. However, raising retirement ages and penalties for early retirement the exception because most all seniors aren't affected, so no group lobby. And elderly seniors have also stolen a huge share of Medicaid (meant for the poor, while senior poverty is just 7%) by deliberately impoverishing themselves (transferring wealth to kids) so they qualify for Medicaid to fund all their NURSING HOME charges for life! INSOLVENCY also doesn't mean zero payouts. Extreme case is Japan, the only high-income nation WITHOUT a public pension! Why? Social mores so strong that even kids in their 50s and 60s totally obey their parents (just like most women quit working beyond age of 25).
I'll guarantee you Trump did not devote a second to "fiscal realty" in any part of his "big beautiful bill." The GOP, as you should know, only demands program change "pay for themselves." Trump's 2nd huge tax cut for the rich (and 4th cut since Reagan) were all UNFUNDED. So was the $3 trillion Iraq War or the current illegal Iran war! Unlike cities and states, the Federal Gov't can and now does run any deficit and PRINT MONEY. NATIONAL INCOME ACCOUNTING AND BALANCE SHEETS have become irrelevant despite the collapsing DOLLAR. Program cuts aren't cut the deficit any longer and public services of any kind are no longer relevant.
Uh, I'll choose my Econ PhD, managing 2 Congressional Campaigns, and rescuing businesses and regional gov'ts for decades. Now, all Trump spending is "discretionary," even essential CDC and FEMA, to shift resources to the squeaky wheel (e.g., SENIORS). U.S. Federal finances are never a constraint; econ's "money is a veil" and NOT REALITY; only real things can matter; Hitler conquered Europe in 6 months with a BARTER economy, but Banks PANICKED when Clinton ran surpluses (need safe debt instruments). What was "Daddy Party" fiscal reality, has since Reagan, become DRUNKEN DADDY, responsible if sober (Dems in office), but not when drunk on power, when "just one more" magically paying for tax cuts and wars of choice.
There is no “earned benefit” principle in a VAT funded social insurance system. One might think that a “retirement” benefit should be somewhat related to pre-retirement lifestyle without claiming that benefit was “earned.”
Beat me to it. Had a draft written with almost this exact title!
I'd love to know polling results if we were to ask people if they support eliminating the payroll tax cap as long as millionaires get to keep the huge increase in their benefits upon retirement.
Back of the envelope math on the bend points means a lifelong-millionaire retiring this year would receive at around $170,000 in benefits. Up from the ~$48,000 they're eligible for now. Married couples would be a quarter of a million dollars.
"Eliminate the payroll tax cap and have the government write millionaire retirees checks for hundreds of thousands of dollars" can't be too popular.
You need to write it! It can't be said enough.
Bring Jose Piñera back!
I think there is a math issue (?). If I’m in the 37% bracket and the SS tax cap is eliminated, my personal taxes would increase by 6.2%, right? The other 6.2% is paid by employer.
Please read: You're right, but for the wrong reasons. Social Security can't ever be "insolvent" because Seniors are now the dominant voting group and are 1-issue voters; but even dictators like Putin rely on public pensioners for their social support! But Social Security ALWAYS was a fraud on all involved. The program NEVER FUNCTIONED from day 1 as an earned-benefits program (it was always a pay-as-we-go public welfare program for seniors (current-worker payroll taxes funded all senior beneficiaries). But not an evil conspiracy. It was the only way in the Depression to pass Congress or be accepted: as is, opposed as socialism (ironically it wasn't, it was public welfare; But TVA, NRA, CCC, etc. WERE pure Socialism! -- gov't employed & managed millions of unemployed to build public infrastructure and provide public services). Also, back then, many of poorest seniors WERE TOO PROUD (or ashamed) to take HANDOUTS! So it was DISGUISED as A PENSION PLAN INSURANCE. And later adding disability "insurance", indexing with inflation, etc. made it even less earned-benefits! The RESULT was a HORRIBLE mish-mash: the first 5 decades, seniors "got back" up to 30 times what the paid in! Could say payroll tax just "transferred" to seniors; but, in a technical sense, workers "invested" in rapidly-growing America's economy by working in it (although most growth, innovation, investment, and exports were confined to a very few industries, occupations, and regions). But what make our public pension program the MOST UNFAIR on Earth is the "reverse Robin Hood" INEQUITIES -- in shorthand, it's dominated by below-average-wage working folk (with the shortest life expectancies from physical labor and poor health care), taxed with no deductions, subsidizing mainly the comfortably retired who least need it (because payouts proportional to last several paychecks! The other nations allow hard labor workers to retire at 55 to 60 and don't rely on the FANTASY of earned-benefits to make determine payouts! Dems dared not try to reform this disaster, for fear GOP will force investing it in the market or make it more unfair!
Insolvency is a question of reality, of having enough revenue to pay the benefits.
Seniors' desires are just that, desires. Desires are not revenue. Social Security is quite capable of confirming to reality in the face of insufficient revenue, regardless of how seniors vote or what they want.
Uh, Seniors when they had a much smaller share of voting over 50 years ago always got every change (i.e., freebee) they asked for (even when minimal inflation didn't didn't kick in the senior COLA, they demanded it anyway! Trump made sure that seniors were showered with new benefits, such as much higher tax exemption for earned income as well. However, raising retirement ages and penalties for early retirement the exception because most all seniors aren't affected, so no group lobby. And elderly seniors have also stolen a huge share of Medicaid (meant for the poor, while senior poverty is just 7%) by deliberately impoverishing themselves (transferring wealth to kids) so they qualify for Medicaid to fund all their NURSING HOME charges for life! INSOLVENCY also doesn't mean zero payouts. Extreme case is Japan, the only high-income nation WITHOUT a public pension! Why? Social mores so strong that even kids in their 50s and 60s totally obey their parents (just like most women quit working beyond age of 25).
Please do not confuse voter wishes with fiscal reality.
I'll guarantee you Trump did not devote a second to "fiscal realty" in any part of his "big beautiful bill." The GOP, as you should know, only demands program change "pay for themselves." Trump's 2nd huge tax cut for the rich (and 4th cut since Reagan) were all UNFUNDED. So was the $3 trillion Iraq War or the current illegal Iran war! Unlike cities and states, the Federal Gov't can and now does run any deficit and PRINT MONEY. NATIONAL INCOME ACCOUNTING AND BALANCE SHEETS have become irrelevant despite the collapsing DOLLAR. Program cuts aren't cut the deficit any longer and public services of any kind are no longer relevant.
This has nothing to do with what Trump or voters or you want.
This has everything to do with running out of other people’s money.
When the piggy bank is empty, it’s empty, and it doesn’t matter what kind of a tantrum the voters or Trump throw.
What part of “fiscal reality” do you not understand?
Uh, I'll choose my Econ PhD, managing 2 Congressional Campaigns, and rescuing businesses and regional gov'ts for decades. Now, all Trump spending is "discretionary," even essential CDC and FEMA, to shift resources to the squeaky wheel (e.g., SENIORS). U.S. Federal finances are never a constraint; econ's "money is a veil" and NOT REALITY; only real things can matter; Hitler conquered Europe in 6 months with a BARTER economy, but Banks PANICKED when Clinton ran surpluses (need safe debt instruments). What was "Daddy Party" fiscal reality, has since Reagan, become DRUNKEN DADDY, responsible if sober (Dems in office), but not when drunk on power, when "just one more" magically paying for tax cuts and wars of choice.
There is no “earned benefit” principle in a VAT funded social insurance system. One might think that a “retirement” benefit should be somewhat related to pre-retirement lifestyle without claiming that benefit was “earned.”
There really is no earned benefit, that's a myth
Except it’s not.
What is a myth is that it cannot be modified by Act of Congress.
There *is* a major difference between the two ideas.