This page was last updated on February 1, 2017.
SO IT BEGINS; Carl Davidson (KD); Facebook; December 17, 2016.
You can learn more about BCR’s leftster management here. “Leftster” is the combination of leftist and gangster, inspired by the left-originated “bankster.”
Local lefty leader Carl Davidson (KD) wrote, “SO IT BEGINS. There only one way to improve Social Security: Take the cap off FICA (Now at $116K, a kind of affirmative action for those with higher incomes) and if that is done, set the maximum payout at, say, $50K. Anything else will ‘make America great’ at the expense of the elderly and infirm.”
People have been making bogus claims like KD’s since he was in grade school. When lefties aren’t saying “There is no Social Security crisis” and “Social Security doesn’t need to be fixed,” they claim removing the MTEA will fix the SS problems they say don’t exist.
KD didn’t mention the Maximum Taxable Earnings Amount (MTEA) increases every year by law. The 2016 MTEA was $118,500 (not KD’s “$116K”) and the 2017 MTEA is $127,200. KD also failed to mention eliminating Medicare’s MTEA in 1994 didn’t fix Medicare’s fiscal problems.
Let’s look at KD’s comment the SS MTEA is “a kind of affirmative action for those with higher incomes.” Though SS benefits favor low-income wage earners a bit, it isn’t intended to be an income/wealth redistribution program. That is, SS was not designed primarily to take money from higher-income wage earners and give it to lower-income wage earners. SS benefits are determined in large part by how much we as individuals pay in SS taxes over our working life. The more SS taxes you pay while working, the greater your benefit checks when you retire, up to a point. Though eliminating the MTEA might generate more tax revenue, it would also increase the benefits (increasing SS future obligations) that must be paid to those wage earners.
From 1950 through 1990, Congress increased the SS tax rate 20 times! At 12.4%, the current SS tax rate is 6.2 times its original two-percent rate. The reason numerous SS tax-rate increases haven’t and can’t “fix” SS is because its problems are structural. You can get the details from my SS and Medicare paper.
In Peace, Friendship, Community, Cooperation, and Solidarity. <g>
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