For all you who say, “Scrap the cap,” a huge majority of likely voters agree with you! Check out NCPSSM’s new poll on public attitudes toward Social Security and Medicare.
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Media reports have been circulating in Washington for the last few weeks that the Trump Administration is considering a proposal to eliminate the payroll tax. Since this tax is used exclusively to fund Social Security and Medicare, its elimination would be tantamount either to ending these two vitally important programs or converting them into welfare programs where retirees’ benefits would be subject to the whims of Congress and the vagaries of the legislative process.
The National Committee to Preserve Social Security and Medicare opposes this terrible idea, and urges the Trump Administration to disavow what we hope is an ill-conceived trial balloon.
More on this issue via Entitled to Know.
For more than 80 years, Social Security has been funded by hardworking Americans through the payroll tax in exchange for guaranteed benefits upon retirement, disability or death. As such, it is a budget-neutral program that doesn’t contribute a penny to the deficit. Social Security is broadly supported by Americans because it is an earned right. The relationship between earnings and benefits is a fundamental feature of the program, one that would be completely undermined if it were no longer funded by a payroll tax.
Max Richtman via Palm Beach Post.
This Valentine’s Day marks the date when Americans with wages exceeding $1 million stop paying into Social Security for the year. That’s because anyone earning at least that much hits the Social Security payroll tax cap of $128,400, barely seven weeks into 2018. In stark contrast, the average American worker contributes payroll taxes throughout the year.
“This red letter day takes on added significance because of the need to address the long-term solvency of Social Security and a political climate where seniors’ earned benefits are under constant threat,” says Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare.
The payroll tax cap prevents billions of additional dollars from flowing into the Social Security Trust fund, which is projected to be able to pay about 80% of benefits beginning in 2034 if Congress takes no action. While some on the political right have advocated cutting benefits and raising the retirement age to address the shortfall, the National Committee believes that benefits should be boosted and the program’s solvency strengthened by lifting the payroll tax cap – so that millionaires pay their fair share.
Read more from our Press Release by clicking here.
4. Trump is considering getting rid of the payroll tax, which would destabilize Social Security. The payroll tax is a dedicated funding stream for the Social Security trustfund, which working people pay into with the promise that they will receive Social Security benefits after they retire or Social Security Disability Insurance benefits if they are unable to work due to a disability. Social Security is especially important for women, who have lower retirement savings on average and tend to live longer than men. But without a dedicated funding stream, Social Security would have to rely on appropriations to the program or deficit spending to pay out benefits that recipients have earned after a lifetime of work. This destabilizes Social Security and subjects it to the political whims of Congress.
via NWLC.
Related Reading:
- Repealing the Social Security Payroll Tax: A Terrible Idea.
- Since this tax is used exclusively to fund Social Security and Medicare, its elimination would be tantamount either to ending these two vitally important programs or converting them into welfare programs where retirees’ benefits would be subject to the whims of Congress and the vagaries of the legislative process.
Americans with wages exceeding $1 million will stop paying into Social Security for the year. That’s because anyone earning at least that much hits the Social Security payroll tax cap of $128,400 today, barely seven weeks into 2018.
The average American worker contributes Social Security payroll taxes throughout the year. This red letter day takes on added significance because of the need to address the long-term solvency of Social Security and a political climate where seniors’ earned benefits are under constant threat.
The payroll tax cap prevents billions of additional dollars from flowing into the Social Security Trust fund, which will be able to pay roughly 80 percent of benefits beginning in 2034 (if Congress takes no action).
Read more from our Op-Ed in the Hill by clicking here.
Of all the trial balloons that have been floated in Washington this spring, one in particular needs to be shot down before it gains altitude: eliminating the Social Security payroll tax and instead funding the program with general revenues. It is not clear how seriously this idea is being considered. But it is a terrible proposal that would end Social Security as we know it, which would hurt the 3 million Florida retirees who count on their benefits for a modicum of financial security.
via Palm Beach Post.
More on this issue can be found here.
The payroll tax cap prevents billions of additional dollars from flowing into the Social Security Trust fund, which is projected to be able to pay about 80% of benefits beginning in 2034 if Congress takes no action.
The obvious fix for Social Security is to require the wealthy to pay the tax on all of their income, just as middle class and low-wage workers do. As it is now, the rich pay the tax only on the first $118,500 they earn. They don’t pay a cent of the tax on the rest. No matter how many millions they pull down.
via Huffington Post.
Related Reading:
Since there is no COLA increase, the payroll tax cap freezes which results in a $10 billion loss in revenue.
The conservative argument that the retirement crisis is a myth has been based on the notion that Americans actually will have far more in retirement resources than they recognize — particularly that Social Security benefits will amount to a much larger percentage of workers’ lifetime income than has been assumed. Ergo, there’s no need to expand Social Security to give retirees more.
via Los Angeles Times.
Further Reading:
It’s no secret that American workers face a major retirement crisis. Wealth inequality and workplace changes mean more and more retirees have come to rely on Social Security for most of their income. But the average monthly Social Security benefit in Maryland is $1,472 — or roughly $18,000 per year, which is only slightly above the federal poverty line. And even with Social Security, some 7 percent of Maryland’s seniors live in poverty.
The good news is that Maryland workers can increase the size of their future Social Security checks by delaying retirement. Delayed claiming past the early retirement age of 62 results in bigger monthly benefit checks for life, and waiting until after the current full retirement age of 66 yields even greater gains — up to 44 percent more than early claiming.
But too few Marylanders are taking advantage of this “delay-and-gain” strategy, or are even aware of it. The average age for claiming Social Security in Maryland is 64 — two years older than the minimum, but early enough to be penalized with lower benefits, which are cut by roughly 6 percent for every year that they file for Social Security before the full retirement age.