Why Social Security Is In Trouble

[erchess]

No Cap

The problem I see with no cap is that under the present system there's a cap on how much very wealthy people pay tax on and a corresponding cap on the benefits they eventually may draw. If we take away only the cap on how much they pay in then we have at least made a big dent in the revenue shortfall but possibly at the expense of the broad support Social Security enjoys from the public. If on the other hand we take away both caps the additional revenue will only pay for the additional benefits

[David1980]

I believe two things should happen with Social Security....

1) ALL earned income should be taxable.....no ceiling. Just think, if the Hollywood actors and actresses had to pay Social Security on their $20 million per film, geez, an instant boost in revenue for the government.

Shoot, I'd love to eliminate this "earned income" aspect and if we're going to have a social security tax, just have it as a tax on income period. Can you imagine how many people would elect out of social security if it were an optional system? Thankfully, the wealthy who make most of their income as unearned investment income can do that - by making their income investment income and not earned income. Yes, it's (currently) paying out based on your earned income you've earned in whatever formula it uses... I don't see any reason for that. Calculate the benefit on the taxes paid period. The truth is I don't see much of a difference between earned income and unearned income as far as how people treat it. If I made my money off rentals and investments or through a salary, it's all income to me. It'll pay my living expenses, my luxuries, etc. Putting extra taxes on earned income seems like some cruel joke against those who must work to have an income.

[Burke]

Exactly why movie stars take a percentage of profits, hedge fund managers do the same -- rendering the large majority of their income subject to capital gains rates -- 15% thanks to Congress.