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Originally posted by: forkushV
It's an extra 6+% tax, not on the total income, but ONLY on the amount over 113,700. And there is a cap on it, so it is ONLY a 6+% tax on the amount from $113,700 on up to...I don't know exactly. Whatever it takes to get Social Security participation back to 90% of all wages.
A lot of people think that Reagan and the Democratic Congress negotiated a pretty good way to keep Social Security solvent. But since then, because of rising income inequality, an additional 7% of the nations wages are no longer taxable. My suggestion is a way to correct that.
Originally posted by: forkushV
QuoteClose (which for you and me is quite an accomplishment).
Originally posted by: Roulette ManQuote
Originally posted by: forkushVQuoteNope, it's $113,700, not $113,800. And I should have specified 6.2% not the total payroll tax.
Originally posted by: Roulette ManQuote
Originally posted by: forkushVQuoteLet's check the math:
Originally posted by: Roulette Man
...Since there will be a maximum amount that a taxpayer can collect from social security, even if he reached the maximum income threshhold, Forkie is proposing an additional 6+% tax on all taxpayers who make over 113,700 for the year.
With an increased cap, someone making $113,800 would pay an extra $7.65 in SS taxes. Is that "an additional 6+% tax?" No, more like .007%
Someone making about $123,700 would pay an additional $765. Is that "an additional 6+% tax?" Nope, more like 0.6% - but getting warmer!
And for someone making $1 billion in wages the increase would be - well I haven't a clue, and neither does Roulette Man. I did not say that the cap should be raised to infinity, I said that it should be raised to cover 90% of all wages. Just like under President Reagan.
And thank you for no name-calling Roulette Man.
Sheesh. You as usual don't understand Social Security.
Everybody with earned wages is assessed a 6.2% FICA tax and a 1.45% Medicare tax for a combined 7.65% tax rate. The employer must match that. For 2013 after reaching an income amount of $113,800, Social Security tax will cease and Medicare tax continues on every dollar earned above that amount. If we do as you propose, there will be a tax increase of 6.2% on everybody earning more than $113,800. Do you understand that? Your explanation is so wrong and so convoluted that you probably shouldn't be commenting on it.
But under what I propose, their would be an additional 6.2% tax on the MARGINAL amount over the current cap. And I don't propose an infinite cap like you imply, it should be adjusted so that it creates a Reagan-era participation of 90% of all wages, not the current 83%.
If you didn't understand it before, you should understand it now.
Well I had the 113,700 in my initial post to you. You still don't seem to be able to comprehend this. There was NO percentage calculation of wages when calculating the amount of social security taxes that were assessed. Under Reagan the salary caps and the initial rates were lower than today. I believe it reached the 7.65% rate near the end of his presidency. The no cap limit on Medicare taxes started under Clinton.
So under your proposal, people earning over 113,700 will have to pay 7.65% on each additional dollar they earn. Mind you this is not on people who are in the 39.6% tax bracket, but people who are in the 28% tax bracket, will now jump up to 34.2% after $113,700 of income. That is a 22% increase in taxes. That is also a tax that will have to be paid by employers. If you are self employed, you are looking at a 54.6% increase after that amount.
It's an extra 6+% tax, not on the total income, but ONLY on the amount over 113,700. And there is a cap on it, so it is ONLY a 6+% tax on the amount from $113,700 on up to...I don't know exactly. Whatever it takes to get Social Security participation back to 90% of all wages.
A lot of people think that Reagan and the Democratic Congress negotiated a pretty good way to keep Social Security solvent. But since then, because of rising income inequality, an additional 7% of the nations wages are no longer taxable. My suggestion is a way to correct that.
Where do you get 90% of all wages? When Reagan took office in 1981, the social security and medicare rate were a combined 6.65% and the cap was on 29,700 of wages. Inflation based on the CPI from January 1981 to January 2013 is 165%. That would mean if the cap was adjusted only for inflation it would be around $78,705 today and not $113,700.
