Home » Uncategorized » No “Grand Bargain” Needed for Social Security ?

No “Grand Bargain” Needed for Social Security ?

Blog Stats

  • 7,451 hits

.

        I have a few questions about how the Social Security and Medicare programs are paid for, but first, a quick review of how things are done now: For 2013, the upper limit on wages and salaries subject to Social Security tax was $113,700. The 2014 tax year sees this limit increased to $117,000. There has always been an upper limit on wages subject to Social Security tax, for example, in 1996 the limit was $62,700. Medicare tax had it’s upper limit removed in 1994, so all wages and salaries are subject to Medicare tax. Social Security and Medicare taxes are also called ‘payroll taxes’, ‘FICA’ (Federal Insurance Contributions Act), or Federal withholding. Currently, and historically, equal amounts have been paid by employers and employees, with the rates for 2013 and 2014 as follows: 6.2% each for Social Security, 1.45% each for Medicare. This makes a total of 15.3% of all wages and salaries subject to these taxes being paid to the U.S. Treasury. Self employed people and contract employees pay both the employer’s share and the employee’s share of both taxes. A new 0.9% additional Medicare tax was added for 2013 on wage and salary amounts over $200,000 for individuals and over $250,000 for married couples.

.

  •       If there is an upper limit on wages and salaries subject to Social Security tax, why is there no lower limit? The amount a person pays in any given year has little or no impact on their lifetime contribution amounts, or the amounts they may ultimately collect from the program. Does it really make sense to have a minimum of 15.3% of someone’s wages go to the Feds if they only have 3 or 7 thousand dollars income in a given year?
  •       If the upper limit on Medicare taxes was removed 20 years ago, why has the upper limit on Social Security taxes remained in place?
  •       Why are half of the taxes paid by the employer and half paid by the employee? It all winds up as payroll expense to the employer, so why not have the employer pay it all, or have the employee pay it all, like self employed people and contract employees do already?
  •       Why tack another small tax (0.9%) on to the whole system rather than increasing the amount of one of the existing taxes? For example, increasing the upper limit on Social Security to $200,000.
  •       When Federal Unemployment tax is included, there are 6 or more different places these ‘social program’ taxes are figured and collected from. Accounting is debits and credits, income or expenses. Why not just pick a spot and collect one “social program” tax?

It seems to me that people ranting about these programs being terribly underfunded or needing dramatic cuts in benefit amounts should look at some simple improvements before destroying programs which most U.S. citizens seem to appreciate.

Advertisements

2 Comments

  1. […] been challenged by my blog buddy Zane to crank something out this weekend and I actually have new followers, which makes me want to write, […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Habeas Quaestus

A Marxist Girl In A Law School World

Idiot Joy Showland

This is why I hate intellectuals

Left Labor Reporter

Telling labor's untold stories

The Disorder Of Things

For the Relentless Criticism of All Existing Conditions Since 2010

Al ritmo político

En sintonía con la realidad

The Feck it Philosophy

Writing, short stories, poems, creative writing, novels, novel, poetry

zanesworld1

Mostly political / economic / social thoughts

ceyefkey

ceyefkey’in hayal dünyası. özgürleşmek ve özgürleştirmek için. writing for becoming and making free.

WEB OF DEBT BLOG

ARTICLES IN THE NEWS . . . . . . . . . . . . . . . . COMMENTS, FEEDBACK, IDEAS

Cassandra Rules' Super Fun Blog

Reasons Not Rules Make Us Strong.

Rcooley123's Blog

Rick Cooley's Blog

A Journo Journal

I'm from the land of good writing and proper grammar, and I'm here to help.

Med Poets Society

Rachel Hammer may be just the creative scientist educator for you

Toby Sterling

Non-Partisan Candidate for Governor of Minnesota

The Activist Project

A collective effort to reverse the capitalist information flow

OCCUPY CENTRAL

Occupy the World - United Together as One We Can Change the World

occupythemedia

Just another WordPress.com site

%d bloggers like this: