How Social Security Cheats You to Pay the Rich

MSN Money ^ | 4 February 2004 | Liz Pulliam Weston

[UCSC Republican]

What would you think of a tax system that took money from the poor to give to the rich?

That’s essentially what’s happening with our Social Security and Medicare tax system, where low-income workers are dunned to pay benefits for high-income seniors.

[leadpenny]

"Almost" ain't good enough, imo. BTW, according to experts, the plan is to always have 6-7% above the cap. Ain't that great?

Do the Medicare thing and REMOVE THE CAP!

Believe me, I think FDR should be dug up and B-slapped for ever starting this ponzi scheme, but until it dies, remove the cap.

[kabar]

If you raise the cap, you should also raise the benefits--agree?

[leadpenny]

That's the other side of the ledger. I don't know.

gotta go to work.

[wireman]

"Remove the FICA Cap!"

Nah! Just remove FICA.

[Axenolith]

What the hell for? Do you think the government will actually wisely spend any more extra money they get? The system was set up and sold as a pay as you go system, so theoretically you should get back what you put in. Since you DON'T, I don't see any reason why higher income earners should be punished some more to make up for the generational ineptitude and corruption of a bunch of pus sucking, windbag politicians. Raise the FICA Ceiling and sure as the sun rises some idiot there will say "See, we DO have enough money to pay benefits to Mexican Nationals!"

I can just hear the murmers of the politicians now in Washington if the FICA ceiling is lifted, it would be "HA!... SUCKERS!"

[RedWhiteBlue]

You're rich, I'm middle class. We agree to run a foot race for a mile with ten pound weights on our ankles. All I know is that you get to shed your weights somewhere before the finish line. Makes sense to me. NOT!

That analogy does not compute with me. For the sake of example, let's just grab some numbers. Let's say the "rich" guy pays $300/month in FICA taxes, and the "middle class" guy pays $100/month. If the weights they are carrying are the same, then the middle class guy gets to stop at 1/3 of a mile and the rich guy has to run the full mile. Or, if they both run a mile, then the rich guy's weights are 30 lbs, then the middle class guy's weights are 10 lbs. That is the only way the middle class guy can balance out the fact that he pays in 1/3 of what the rich guy has to.

Now take an upper-middle class guy and a rich guy. The rich guy makes a lot more, but they both pay $300/month. And in the end, they get exactly the same SS payment ... because they paid the same amount in taxes all those years. Even thought one made more money than the other, their race will be the same length and the weights they carry will be the same.

Of course, "fairness" is an illusion. Any of the guys could drop dead as soon as they retire and there will be no benefit to them or to their families. And the poorer guy could end up living to be 100 a receive far more than they ever contributed. And the rich guy will have most, if not all, of their SS taken back in the form of taxes, and the middle class guy is in danger of having the same thing done as well.

What is truly not fair is expecting people to pay into a system and then telling them that they get absolutely nothing for their years of payments. I know plenty middle class people that live frugally, and they would be considered middle class workers, white and blue collar. These people don't buy new cars every year, and most buy used cars and run them into the ground before they buy another. They don't live in the most expensive houses and wear the fanciest clothes. They only go to restaurants on special occasions, and they don't go on expensive vacations. But they are very good at living modestly but comfortably within their means and saving money. The have saved it in 401k's, IRA's, and anywhere else they could do so. Now they have a nice nestegg saved for retirement, and some are even millionaires, even though they never made any more than middle class salaries or wages. But because they were responsible and saved, they would be penalized and get no SS. The schmuck with the same income, bigger house, fancy vacations, new cars, and stuffed closets would get their SS payments. That is not fair.

[Axenolith]

If you're going to Means Test, then just ditch it and put the recipients on direct welfare...

[americanbychoice]

another Soc. Sec thread for you?
If you would remove the cap, by the way, I don't care one way or the other. Would you be upset that those with higher contributions would receive more soc sec than the average person?
Let me guess................................

[Protagoras]

It will be interesting to see which parts you find amusing.

[Protagoras]

Ending social security is the only possible solution.

Privatization is a good first step.

[Protagoras]

Remove the FICA Cap!

Raising taxes and wealth redistribution and class warfare are usually practiced by liberals. I guess they have become acceptable for Freepers nowadays.

[Protagoras]

One paid 12.4% FICA during their working years. The other paid 1.24%. Fair?

The idea that a ponzi scheme can somehow be made "fair" by tinkering with the details is inane.

[TaxRelief]

[Liberal policies] acceptable for Freepers nowadays.

Define FReeper.

Do you mean anyone who registered on Free Republic?

Or do you mean people who go door-to-door to get conservatives elected, who counter-protest at liberal protests and who have a solid conservative philosophy of small government, strong social, moral values and a faith in humanities ability to be self-responsible?

Freepers do not support LeadPenney's liberal nonsense.

[Protagoras]

Do you mean anyone who registered on Free Republic?

That is closer to what I meant. I could have worded it better.

Or do you mean people who go door-to-door to get conservatives elected, who counter-protest at liberal protests and who have a solid conservative philosophy of small government, strong social, moral values and a faith in humanities ability to be self-responsible?

Those types are few and far between when compared to the largest group of posters here. And those who exist are often reviled.

Most here are big tent Republicans who came together in their common hatred of the Clintons. Like their leader, they are mostly left of center when their beliefs are truly examined.

[Lancey Howard]

Neither one will get anything out of SS now that they are dead. One paid 12.4% FICA during their working years. The other paid 1.24%. Fair?

They paid the same amount of dollars in and so should get the same amount of dollars out. This isn't rocket science. I don't understand why you are so confused?

[Lancey Howard]

You and I are on exactly the same page.
I agree with everything that you have posted except that I do not share your cynicism about FR posters in general. Sure, there's a lot more educating to do and, like apparently with leadpenny, a little more deprogramming needed ("fairness" - - Good grief, if there was ever a scumbag Democrat buzzword....), but I believe that this site leans way right of "center".

Regards,
LH

[kevkrom]

Those are the easy points to make--There are others

Not the least of which is that low-income earners are eligible for the earned income tax credit (EITC) on their federal income taxes, which is designed to offset a significant portion of their FICA taxes.

[KC_for_Freedom]

Agreed, the author's point is that if we want to redistribute wealth, then Social Security is not the best way in all cases. This is bull thought, because she realizes that SS works fine for a lot of the people.

Nothing the government does works for everyone, and social security was meant for something other than wealth redistribution when it was started. (It has been changed to a liberal give away over time.)

Since we don't want wealth redistribution, we don't care if SS pays back to some people who are well off. As the article said, they are entitled to what they get because they paid in.

I don't understand why programs need to end up with everyone fairly paid and happy, that sounds like socialism to me. Lets suggest that SS be revised to be a capitalist system. If we force people to save, (not good for personal freedom) then let's force them to learn to invest too. Then terminate the "forcing function" and let people save and invest without the government involvement. Neat idea huh?

[k2blader]

Well, Social Security and Medicare are essentially forms of socialism, i.e. "redistribution of wealth". I often wonder why conservatives are content to let such programs continue.

[undeniable logic]

Isn't it scary that someone who thinks like this actually gives financial advice? The fact is that everyone who pays into Social Security is getting screwed - doesn't it only give a return of about 0.5-1.0% a year if you get average benefitzs?

Anyway, anyone who takes any financial advice from this crackpot is an idiot.