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View Diary: Take Social Security off the table (159 comments)

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  •  The formula does not provide for limitless (1+ / 0-)
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    increase in SS payments to beneficiaries.

    There is an upper limit to the payout.  

    I'm not sure you and Bob are talking about the same thing, but "raising the cap" -to me- refers to applying the FICA tax to income over $110,100 per year.  

    In fact, I think it should be applied to all income, period.

    Since there is an upper limit to the benefits paid out, the rich will pay considerably more money into the fund, but not be the recipients of any higher benefits when they are old.

    "The law is meant to be my servant and not my master, still less my torturer and my murderer." -- James Baldwin. July 11, 1966.

    by YucatanMan on Tue Nov 13, 2012 at 02:35:45 PM PST

    [ Parent ]

    •  There is no upper limit. That would be a welfare (0+ / 0-)

      program, and SS is not a welfare program.

      SS replaces income at - I think - 11% for the highest 'bracket' (it may be 15%; check it out on - I haven't time now).  This has to do with the 'bends' in benefit calculation. So if someone makes $500k/month and pays FICA on it, his/her retirement benefit will indeed exceed $50k/month - for every month he/she lives ...

      If you are arguing that SS should collect taxes on some income but that that income should be irrelevant to benefit calculation - then you are making SS a welfare program. Why not collect that tax as income tax - which it is - and use it as 'general revenue' to supplement Social Security where necessary? In other words, why declare it SS when it is outside the principle of the program? Because when SS becomes just another welfare program, like food stamps, then Congress can futz with reimbursements every damn budget year and is not constrained by formulas.

      FDR designed SS as an income-replacement program. It works great. Why confuse it with programs designed on different principles?

      Am I right, or am I right? - The Singing Detective

      by Clem Yeobright on Tue Nov 13, 2012 at 02:47:07 PM PST

      [ Parent ]

    •  The Cap is on income, no cap on benefits (1+ / 0-)
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      Clem Yeobright

      AIME formula is used to link income to benefits, in essence making it seem like there is a cap on benefits.

      FDR 9-23-33, "If we cannot do this one way, we will do it another way. But do it we will.

      by Roger Fox on Tue Nov 13, 2012 at 03:10:49 PM PST

      [ Parent ]

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