Since there is general consensus that SS cannot pay the benefits it has promised to future retirees, it is time to stop extracting FICA taxes from workers.
If we eliminate the worker-side of the FICA, but expand the employer-side to include all employee compensation — meaning not just wages up to $106K/yr, but all wages, all non-cash benefits like health and life insurance, company vehicle allowances, stock options, etc. — and up the rate to 10%, the revenue collected from the employer would collect $850B/yr. That, combined with the $2.5T owed by the general fund to the SS Trust fund, would be enough revenue to pay current benefits to existing retirees until they die. It would be enough to pay future retirees the HHS poverty level of $11k/yr or the amount they’ve earned up to the date they stopped contributing directly, whichever is higher. So nobody has to worry about grandma eating cat food, but a better-than-poverty-level retirement will require people save some of that 7.65% they are no longer paying to FICA and invest for themselves.
I would also require 20 years employment in the US to receive the full default poverty-level benefit, subtracting 5% of benefit for each year they are short of 20 years — that would stop retirement age immigrants and “refugees” from collecting from a system they never contributed to. Collecting retirement earlier than 65 will also reduce your benefit by 5% per year — retire at 60 if you want, but received just 75% of the age 65 amount.
To discourage outsourcing labor, I’d also apply this 10% tax to expenditures to foreign entities including imports, essentially applying our payroll tax to the outsourced labor embedded in those imports. This would garner another ~$200B and allow complete elimination of the Corporate profits tax and all the lobbying and corruption it promotes as well as the overhead to businesses to comply with the corporate tax code. Those profits will still be taxed, but at the individual level as dividend or capital gain income.
Now that is an excellent post. You should run for office.
Too bad none of the major candidates have your full grasp of the situation.
Hey, no big deal, right? I mean, I'm sure the employers are just rolling in cash, so there would be no problem in increasing the cost of employing people. We hear the leftists screaming about how the employers are just sitting on all this cash, refusing to hire people. I wonder how many people would lose their jobs due to a plan like this? You propose boosting the employers' share of FICA and Medicare from roughly 7.5% to 10%, and increasing the tax over all the employees' compensation! Plain and simple, you need to look at the total cost of an employee to the employer, NOT just their salary. This includes ALL the taxes... Not just FICA, but unemployment insurance, workmans comp insurance, etc... The government has a problem understanding that employers do NOT provide jobs... Employers hire people and compensate them based on the value they can bring to the company through the goods and services they produce.