SSI cap

[Ripmany]

Many people say we should end the SSI cap but then we have to pay more.
We should use this formula total amount paid in = P
1000(log10(P/1000)) this way yes we pay out more to people that pay in more but not much and we make disabled and 62 the same and like 1/3.

[pxmcc]

the only people who would pay more would be extremely high earners. why should a waitress pay a bigger percentage of her wages in SS taxes than a hedge fund billionaire? doesn't make sense, and no benefits will need to be cut for retirees if we get rid of the cap.

[txdot-guy]

Originally Posted by pxmcc

the only people who would pay more would be extremely high earners. why should a waitress pay a bigger percentage of her wages in SS taxes than a hedge fund billionaire? doesn't make sense, and no benefits will need to be cut for retirees if we get rid of the cap.

SSI stands for Social Security INSURANCE.

Doesn’t anyone understand how insurance works? It’s called a risk pool for a reason.

If we want to fix SSI for the foreseeable future we need to both raise the cap as well as increase the taxable rate by one to one and half percent.

[Tiny]

Originally Posted by pxmcc

the only people who would pay more would be extremely high earners. why should a waitress pay a bigger percentage of her wages in SS taxes than a hedge fund billionaire? doesn't make sense, and no benefits will need to be cut for retirees if we get rid of the cap.

Because it represents contributions to retirement pxmcc. And as TxDot puts it, insurance. Does it make sense to pay in $1000 for retirement or insurance and just draw $1.00 out? That's what would happen to the billionaire class if the cap were removed and applied to all income.

In order to keep social security and Medicare solvent, it does make sense to raise the cap somewhat and increase the employee and employer contributions, as suggested by TxDot. But removing the cap entirely and levying employment taxes on investment income, which already bears the Obamacare tax, would be a mistake IMHO.

Sincerely,

Tiny, Champion of the Billionaire Class

[Jacky S]

If they remove the cap, which at this time is around $176,100, can you imagine what Pro Athletes, Rock Stars, and high end celebrities would pay in each year.

And they would still only get the $5108, same amount as I do, because I waited until 70 and had a high earning income for well over 40 years.

[pxmcc]

you could adjust that cap to make it more fair. the main thing is there are ways to keep it solvent. i'm not an expert but hasn't the fund been raided for other expenses?

Originally Posted by Jacky S

If they remove the cap, which at this time is around $176,100, can you imagine what Pro Athletes, Rock Stars, and high end celebrities would pay in each year.

And they would still only get the $5108, same amount as I do, because I waited until 70 and had a high earning income for well over 40 years.

[Tiny]

Originally Posted by pxmcc

you could adjust that cap to make it more fair. the main thing is there are ways to keep it solvent. i'm not an expert but hasn't the fund been raided for other expenses?

Raided for other expenses? What? Are you serious? It's kept in a lockbox! The politicians in Washington would NEVER raid social security!

Seriously, by my definition they've raided and raped and plundered it like drunken Vikings marauding through the French countryside. Too bad Texas Contrarian's not hanging around much these days, as he'd have a good answer. In his absence, I asked ChatGPT, and this is what she said,

The Social Security Trust Fund has not been "raided" in the sense of money being stolen or diverted to unrelated government programs, but there is a common perception that it has been misused. Here's what's actually happened:

1. Structure of the Trust Fund
The Social Security Trust Fund consists of two components:

Old-Age and Survivors Insurance (OASI) Trust Fund

Disability Insurance (DI) Trust Fund

These are funded by payroll taxes, interest on trust fund assets, and taxes on Social Security benefits.

2. Investments in Treasuries
By law, the trust fund surpluses must be invested in U.S. Treasury securities. This means:

Social Security surpluses are loaned to the federal government.

In return, the Trust Fund receives special-issue Treasury bonds, which earn interest.

The money is used by the government for general expenses, just like with other Treasury debt.

3. Why It’s Seen as a "Raid"
While the practice is legal and common, critics argue that using Social Security surpluses to finance general government spending is a form of fiscal sleight-of-hand.

The trust fund holds IOUs from the government, not cash.

When Social Security runs deficits (as it increasingly is), the Treasury must redeem those bonds, which requires either tax revenue, borrowing, or spending cuts.

4. Has It Been Raided?
Technically, no:

The funds are accounted for and are earning interest.

No money has been illegally taken or used against the law.

Politically or rhetorically, yes:

Critics argue that the surpluses should have been saved more responsibly.

The practice has made the overall federal deficit appear smaller than it otherwise would have been.

Summary
The Trust Fund hasn't been raided illegally, but it has been used to mask deficits and fund other federal obligations through borrowing. All of this is done within the framework of current laws.

[Jacky S]

Originally Posted by pxmcc

you could adjust that cap to make it more fair. the main thing is there are ways to keep it solvent. i'm not an expert but hasn't the fund been raided for other expenses?

Here are a few facts.

https://www.ssa.gov/history/Internet...ingle%20budget.

I personally don’t care what the Government does as long as I get my check.
Which, since even though I am 78 years old, I still work with a substantial W-2 income of which they take 23% a month for income tax up to 87%.

My advice to anyone who plans on living into your 80’s. That is wait until your Max Out year, (mine was 70), to start drawing. It’s nice to get that big fat check.

[txdot-guy]

Originally Posted by txdot-guy

SSI stands for Social Security INSURANCE.

Doesn’t anyone understand how insurance works? It’s called a risk pool for a reason.

If we want to fix SSI for the foreseeable future we need to both raise the cap as well as increase the taxable rate by one to one and half percent.

Looks like I’m going to have to print a correction.

Social Security is not the same as SSI which stands for Supplemental Security Income, IE the SSI program.

President Nixon signed the Social Security Act amendments in 1972, which created the Supplemental Security Income (SSI) program. This program began operating in 1974, providing monthly payments to low-income individuals and families who are blind, disabled, or elderly. SSI federalized existing state welfare programs and is administered by the Social Security Administration. SSI is a welfare program.

Supplemental Security Income (SSI) is funded through general revenues of the U.S. Treasury, not through dedicated payroll taxes like Social Security. This means it's financed by personal income taxes, corporate taxes, and other taxes collected by the federal government. Unlike Social Security Disability Insurance (SSDI), which is funded by Social Security taxes, SSI is an entitlement program funded by the general public.

That being said my original statement still applies. Social Security is running into a funding problem because of the surge of people hitting retirement age and the longer lifespan of our population. This is a problem that Washington has known about for decades now but failed to address at a time when it would have been easier to implement and would have cost less.