Latest News
Social Security’s Income Inequality Problem
Sean Williams notes demographic changes are primarily responsible for Social Security’s rapidly growing unfunded obligations, as people live longer and fewer workers contribute payroll taxes. Also, a larger percentage of earned income is escaping Social Security’s payroll tax than ever before, chiefly investment income. The solution oft proposed is to tax the rich more, usually by raising the cap where contribitions stop (currently $168,600). It sounds great in theory, but the added revenue is not enough to solve Social Security’s financial woes, as higher taxes add minimal years of financial solvency. Full article here.
As an example of the leading thoughts on reforming Social Security, the Association of Mature American Citizens (AMAC, Inc.) believes Social Security must be preserved and modernized. This can be achieved without tax increases by slight modifications to cost-of-living adjustments and payments to high-income beneficiaries plus gradually increasing the full (but not early) retirement age. AMAC Action, AMAC’s advocacy arm, supports an increase in the threshold where benefits are taxed and then indexing for inflation, and calls for eliminating the reduction in people’s benefits for those choosing to work before full retirement age. AMAC is resolute in its mission that Social Security be preserved for current and successive generations and has gotten the attention of lawmakers in D.C., meeting with many congressional offices and staff over the past decade.
When Social Security was enacted, it was never meant for the wealthy. Today, the wealthy all say that if they paid into Social Security, they should get something out of it, despite not needing it. Ross Perot mentioned not needing it or wanting it. Those in Congress who are at full retirement age, can get their Social Security benefits, while earning their salary. It doesn’t matter how much they earn. This is what is wrong with the system. Social Security benefits should be completely eliminated for those individuals earning an annual retirement or other income more than $250K per year at full retirement age. Ross Perot was right to point that out, but not one person in Congress made an attempt to modify it for over 30 years. It totally displays their greed and corruption. From this relative cap of $250K, the Social Security benefits should be decreased on a percentage basis, until reaching $125K of annual retirement or other income to enable full benefits. I find it preposterous that any person earning hundreds of thousands of dollars at full retirement age is even eligible for Social Security.
Mark,
Social Security is meant for all those who contribute to the program, and each person’s benefit is commensurate with their contributions (which are based on their lifetime earned income). What your suggesting it a system which is essentially a welfare program rewarding those whose lifetime income is less, and penalizing those whose lifetime earnings are more. While taking from the rich to pay the poor may seem like a lofty goal, it would completely alter the fundamental nature of the Social Security program – from an earned benefit program to a general public assistance program – generating considerable anxiety for all, especially those who are forced to pay into a program from which the receive compensation inconsistent with their contributions. While there is certainly ample cause to criticize Congress, taking away the Social Security benefits they have rightfully earned doesn’t seem appropriate.
There are, as was pointed out in the commentary preceding the posted article, ways to restore Social Security to solvency with changing the fundamental premise of the program, which is to pay benefits consistent with lifetime contributions to the program. You may wish to go to AMAC’s website (www.amac.us) and search for “Social Security Guarantee” to find out how to do that.
In any case, please know that we value your feedback, and appreciate the opportunity to dialogue on this topic.
Regards,
Russell Gloor
Certified Social Security Advisor
The AMAC Foundation