Fixing Social Security: Lift The Cap!
One complaint many “little” people have about social security is that, for example (and if he wants to) Donald Trump will get to collect the maximum benefit when he retires. Many argue that “he’s rich” so why should he dip into the Social Security system? He may argue back: Because I paid in to it! And you know what, he’s right!
The problem is we have a cap. It used to be $56,000 and now it’s something over $100,000. Why is there a cap at all? I mean if a company wants to pay their own president $3 million a year in salary, which many little people find obscene (and some corporate presidents are paid well over $10 million, while a new rank and file employee gets only $6 an hour), why shouldn't the FICA tax be applied on that entire amount, while the maximum benefit remains the current level (plus increases over the years to cover inflation)?
I mean if the person is going to dip into SS, then SS should dip into their entire salary!
Oh, that’s right the company has to pay half the amount. Well, hey I just proposed that those “big guys” get another 7 ½% raise! That should make them feel good! You got a raise!
If all the $10 million dollar a year men and women had to pay a total of 15% of that amount on the FICA (or Social Security tax) it might solve, if not lessen, the problem!
Of course one factor in a lot of this $10 million dollar income is that some of it is in stocks, some of it is in perks, but there is still a sizable amount in taxable income. Often $1 million or more in paychecks, of which 90% is not taxed under the current Social Security structure! Once they reach the cap, they pay no more!
Hey, some of them might need Social Security later on! Donald Trump once went belly up! What if that happens again and his Board of Directors says: “You’re fired!” and the now aging Trump can’t regain his wealth like he did last time? Remember that movie with Jack Lemon where he junked his fortune and went out into the streets to start again and failed?
Tom Cruise. He’s young and hot. What if he becomes a has-been in 10 years? What if his vast fortune dwindles by retirement age? Hey, he’ll be glad Social Security is there. At least he’ll get the minimum!
If companies and presidents of companies find all this to be outrageous and obscene, well hey! We, the little people, find your salaries and perks outrageous and obscene! What can anyone who works at a company for 10 years and makes $2 million in salary and $8 million in perks each year of that tenure possibly do with all that money?
After all, the President of the United States gets along on a lot lower salary, why can the president of Exxon or Apple or IBM or General Motors make it on $500,000 a year? If those companies have that much money to spend on a CEO, then another 7 ½% increase certainly couldn’t hurt them all that much or is the CEO’s salary bleeding them to death already? If so, why pay them so much?
The Social Security system is a pool of investors and the largest portion of that pool is the little guy, yet the big guys have the option of drawing on that pool. So, let them ante up full and complete! Why have a $100,000 or $200,000 cap?
We don’t have to do it all at once. Let’s raise the cap next year to $300,000. The year after to $500,000 and so on. Then by the year 2020 we’ll be at several million on that cap! The extra income will help shore up the Social Security system.
Remember, under Federal Law anyone making $600 or more in any given year has to pay the FICA (or Social Security tax) – that low end cap is really low, but it hits ceiling at far less than $200,000 in salary level while in today’s world there are quite a few people making quite a bit more than that in real, paycheck income!