Social Security Expected to Dip Into Its Reserves This Year

The cap is currently $128,400. https://www.ssa.gov/policy/docs/quickfacts/prog_highlights/index.html

 

"According to the Social Security Administration, fully eliminating the cap on taxable earnings would be sufficient to fully close the projected shortfall."
https://www.epi.org/publication/raising_cap_on_social_security_tax_best_way_to_fix_shortfall/

The "projected shortfall" looks out 75 years into the future. That is as far as the projection goes, so IOW the shortfall would be eliminated given all known parameters.

 

NO, considering the fact we have a wage cap, the median is more accurate

Example;

Lets calculated the average salary and median salary at Company ABC

The owner earns $200,000
His Forman earns $100,000
His labourer earns $50,000

Average salary; $350,000/3 = $116,666
Median salary; $100,000
http://www.alcula.com/calculators/statistics/median/

Now, let's calculated SS contribution rates/amount capped at $125,000

The owner; $200,000 minus $75,000 X 12.4% = $15,500
The Forman; $100,000 X12.4% = $12,400
The Laborer; $50,000 X 12.4% = $6,200

Total SS contributions; $34,100

Median; $100,000 X 12.4% X 3 = $37,200

Average; $116,666 X 12.4% X 3 = $43,399

Keep digging

 

Not the actual SS wages being taxed on average, but what is your point anyway. Putting everyone back to work and back to previous LFPR's is key to stop the bleeding. And now you try to move the goalpost to removing the caps. And I already posted the actual numbers from the SS own' acutary's. That's not going to fix anything even if you rip people off in the process. Your amature attempt does not trump theirs.

"SSA's actuarial study showed that that eliminating the payroll tax cap entirely would only delay the start of Social Security's annual deficits by six years, from 2018 to 2024. Eliminating the wage cap on payroll taxes while paying benefits on only the first $87,900 of earnings would delay the start of annual deficits by an additional year, to 2025."
https://www.heritage.org/social-sec...-payroll-tax-cap-does-not-fix-social-security

Ripping off the few so you don't have to pay more or recieve less isn't going to fix it.

 

Yes my cite is from 2005 and as history now shows raising the cap didn't fix it.

 

In the first place, The Heritage Foundation is known far and wide as an anti-SS, anti-"entitlement, pro-capitalist think tank, so the link is useless and unreliable. Secondly, even if it had any credibility, the article is 12 years old, which makes it worthless anyway.

Try again and this time try a credible source.

 

The raising of the cap was anticipated. Elimination of it isn't. That makes a difference.

 

"SSA's actuarial study showed that that eliminating the payroll tax cap entirely would only delay the start of Social Security's annual deficits by six years, from 2018 to 2024. Eliminating the wage cap on payroll taxes while paying benefits on only the first $87,900 of earnings would delay the start of annual deficits by an additional year, to 2025."
Lack of rebuttal noted. That the best you got?

Eight Reasons We Shouldn’t Raise the Cap on Social Security Taxes

Raising the tax cap wouldn't even make Social Security solvent anyway.

The Center for American Progress has a new study arguing for raising the maximum earnings on which workers pay Social Security taxes. The limit is currently $118,500, and raising it would garner some substantial revenue to shore up Social Security. But there are a lot of reasons why it might not make sense at all.

CAP’s argument is pretty much this: Since 1983, an increasing share of total earnings have “escaped” taxation by Social Security. In 1983, 90 percent of total earnings were subject to taxation. Today, only about 83 percent of earnings are taxed, meaning that 17 percent are “escaping.” From most progressives’ perspective, this pretty much settles the debate on whether we should raise – or preferably eliminate – the Social Security “tax max.” It’s by far progressives’ favorite solution to the Social Security funding problem and, for many of them, their only solution.
But there are a whole bunch of other reasons we should think carefully before raising the tax max. Here are eight:

1. Social Security didn’t start in 1983. And over the program’s entire history, an average of just 84 percent of wages have been taxed, practically equal to today’s 83 percent. In fact, from 1950 through 1972, upward of 20 percent of total earnings generally weren’t taxed by Social Security. From the CAP authors’ perspective, the Social Security tax base was more inequitable during those two decades than it is today.
2. The tax max helps distinguish Social Security from a “welfare” program. Under the Roosevelt administration’s original plans, high earners wouldn’t even have participated in Social Security, much less paid multiples more in taxes than they’ll collect in benefits. Eliminating the tax max would change the character of the program.
3. Even if we raised the Social Security tax max to cover 90 percent of total earnings, we would still need to increase the payroll-tax rate by roughly 2.7 percentage points – immediately and permanently — to cover the program’s full promised benefits over the next 75 years, based on CBO projections. Progressives don’t talk about this very much, but they need to.
4. The main reason that a greater share of earnings are falling above the tax max is that health costsare eating away at earnings for low-income and middle-income earners. Raising the tax max is a Band-Aid. Instead, fix rising health costs.
5. Our tax max isn’t unusually low. In Canada, payroll taxes are capped at the average wage; in the U.K., they’re capped at 1.15 times the average wage; and Germany and Japan at 1.5 times the average wage. Social Security’s tax ceiling is 2.9 times the average wage.
6. It’s a fat tax increase. Today’s top federal tax rate on earned income is about 45 percent. Adding state income taxes boosts it to around 50 percent – and in California, over 58 percent. Eliminating the tax max effectively raises the top tax rate by around 12 percentage points. We could call that Scandinavian levels of taxation, except their taxes are lower . . .
7. And these higher marginal tax rates would be before we’ve done anything to fix Medicare and Medicaid.
   COMMENTS
8. Economists Emmanuel Saez and Jeffrey Liebman concluded that, due to income shifting and behavioral responses, net tax collections from eliminating the tax max would be 40 percent less than SSA’s static projections. This means that one of the biggest tax increases in history would still leave a huge Social Security shortfall.

https://www.nationalreview.com/2015...raise-cap-social-security-taxes-andrew-biggs/

 

I should ask YOU that, given that you rely on The Heritage Foundation. There is no point in rebutting a BS, biased article like that, in case you hadn't figured that out yet.

One reason we should eliminate the cap: it will work.

And the National Review? Really? LOL!!! You just can't stay away from BS, slanted, biased, partisan, garbage sites, eh? LOL!!!!

 

Quote: Not the actual SS wages being taxed on average, but what is your point anyway. Putting everyone back to work and back to previous LFPR's is key to stop the bleeding. And now you try to move the goalpost to removing the caps. And I already posted the actual numbers from the SS own' acutary's. That's not going to fix anything even if you rip people off in the process. Your amature attempt does not trump theirs.

----------------

a. I just prove my point; When calculating SS receipts, the national Median wage X 12.4% is more accurate than the national Average wage X 12.4%.

b. Quote: "Putting everyone back to work and back to previous LFPR's is key to stop the bleeding"

Jan 2017 LFPR; 62.9
https://www.bls.gov/news.release/archives/empsit_02032017.pdf

May 2018 LFPR; 62.7
https://www.bls.gov/news.release/empsit.a.htm

Do you really believe Trump will make the LFPR great again?

 

They borrowed those funds to pay yesterdsys bills, plus a **** ton more. How are they gonna pay off today's debt tomorrow when they borrowed it to pay off yesterday's ?
Perhaps you think your world is static, and what you did yesterday can be done forever?

 

Insurance?
There is no insurance based on every policy holder getting paid out for the same claim.
Complete ignorance

 

You plan on gov taking everyone else's money to be given to you. That's how leeches do

 

Isn't this the libs answer to everything. Raise the tax on someone else. The shortfalls is today's SS was caused by the people who are now drawing SS. If they did not pay in enough to cover what they were promised by crooked politicians why should future generations have to pay their shortfalls? The costs of living keeps going up and wages are not keeping pace. The youth of today have far less disposable income. They should not be burdened with another shortfall caused by the old goats. It is not like anyone with a brain did not see this coming. It is not the young peoples fault the old are stupid. I say make cuts in payouts to point where it works.

 

OK. You don't want to stay on track and discuss this. Hence there is no discussion possible. I'm done with your games. Bye

 

You must be trying to make a point. The fact is a 1% increase would raise his 70 billion, but that number was no good either.


https://www.ssa.gov/policy/trust-funds-summary.html

 

We've been leeching off Treasury Bills/Bonds since the 80's.

 

Awe shucks, somebody thinks the government can borrow into perpetuity and keep him cozy and safe

 

Is that what makes him want to flat out tax others more without any increase their benefits, so he can keep getting other people's money?

 

The economy will and his policies so far are helping that along, are you denying that? Not only does it increase SS income it also reduces other government expenses. We are not going to tax the top 1% enough to fund SS under the current system and doing so just to try and make it "fair", that undefinable "fair", is folly and an abuse of the system. We need more people working and contributing and the money in reserves to earn a better return. Then we need to get people out of the system at least partially and into 401k type retirement funds. And of course a total redo on disability where so much is lost to fraud and abuse.

 

On of the more pitiful lack of rebuttals.

What are you missing about the governments own study?

"SSA's actuarial study showed that that eliminating the payroll tax cap entirely would only delay the start of Social Security's annual deficits by six years, from 2018 to 2024. Eliminating the wage cap on payroll taxes while paying benefits on only the first $87,900 of earnings would delay the start of annual deficits by an additional year, to 2025."

and more pitiful lack of rebuttal

— Andrew Biggs

....Biggs was the principal deputy commissioner of the Social Security Administration (SSA), where he oversaw SSA’s policy research efforts. In 2005, as an associate director of the White House National Economic Council, he worked on Social Security reform.
In 2001, he joined the staff of the President’s Commission to Strengthen Social Security. Biggs has been interviewed on radio and television as an expert on retirement issues and on public vs. private sector compensation. He has published widely in academic publications as well as in daily newspapers such as The New York Times, The Wall Street Journal, and The Washington Post.

He has also testified before Congress on numerous occasions. In 2013, the Society of Actuaries appointed Biggs co-vice chair of a blue ribbon panel tasked with analyzing the causes of underfunding in public pension plans and how governments can securely fund plans in the future.

In 2014, Institutional Investor Magazine named him one of the 40 most influential people in the retirement world. In 2016, he was appointed by President Obama to be a member of the financial control board overseeing reforms to Puerto Rico’s budget and the restructuring of the island’s debts.

Biggs holds a bachelor’s degree from Queen’s University Belfast in Northern Ireland, master’s degrees from Cambridge University and the University of London, and a Ph.D. from the London School of Economics.

 

There is much more to it than that. But first point is that you're trying to slip Heritage Foundation bullshit past me AGAIN. And THAT is, indeed, pitiful. Show me an SSA website where that quote is found. There is none. So maybe THF is also a lying website.

If Andrew Biggs wasn't willing to peddle THF bullshit he wouldn't be there.

 

You should use a more recent study.


#8a: Eliminate the Cap – Do Not Count the Additional Earnings toward Benefits. If all earned income above $106,800 a year were subject to Social Security contributions, but those earnings did not count toward benefits, Social Security would be solvent throughout the long-range projection period. Making this change in 2010 would be more than enough to eliminate the 75-year deficit. With this change, workers who earn far more than the tax cap would pay considerably more in taxes. For example, a person making $400,000 per year would pay $18,178 per year more and his or her employer would pay a matching amount, for a total increase of $36,356. The worker’s maximum benefit would be no higher than under current law. Ever since Social Security began, all wages that are taxed have counted toward benefits. This proposal would break that traditional link.13

: Eliminate the Cap – Count the Earnings toward Benefits. If all wages above $106,800 in 2009 were taxed and counted toward benefits, the change would almost make Social Security solvent through the long-range period, eliminating about 95 percent of the 75-year shortfall. While high earners and their employers would pay considerably more, these top earners would also receive much higher benefits. For example, one who had paid taxes on lifetime annual earnings of $400,000 would get a benefit of about $6,000 per month, or $72,000 per year, which would replace about 18 percent of the worker’s average earnings. One who had average lifetime earnings of $1.0 million per year would get a monthly Social Security benefit of about $13,500, or $162,000 per year,

https://www.nasi.org/sites/default/files/research/Fixing_Social_Security.pdf

 

There you have it. And it directly contradicts what @Bluesguy posted in his BS THF quote.

 

Look, since the last 10 years, I've analyzed every Treasury Monthly Statements, and today, SS outlays are outpacing SS receipts, and the gap is growing despite the fact more people are contributing, and three/four million more jobs will not close the gap.

In a previous post, I stated; an additional 18 million employed is needed to close the gap, and/or a 67% employment to population ratio due to the fact we have a historic and serious fiscal challenge, and it's DEMOGRAPHIC.

Thus, be more realistic, and less partisan.