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FogerRox

(13,211 posts) Fri Nov 29, 2013, 06:45 PM Nov 2013

Social Security is Wage Insurance, for wage earners, not people who earn from capital [View all]

Last edited Fri Nov 29, 2013, 07:36 PM - Edit history (1)

Many people who advocate for removal of the SS income Cap may not have thought out all the implications.

The political optics of Social Security are very important. The system was specifically designed so that it would be perceived by the public as a "you get what you pay for" system, and specifically so that it could not be painted as "welfare for the elderly," where the rich subsidize everyone else. FDR correctly recognized that a welfare system is much easier for the opponents to kill than a system where the middle class perceived it as "you get what you pay for" system that would be much more difficult to kill. How many times have you heard seniors say, "I earned my Social Security benefits" or "I only want what I paid for" when talking about Social Security? It was this genius of FDR that allows them to say that. We should not allow wage insurance to become a dole through the mingling of insurance and relief. It must be financed by contributions to the Trust Fund, not general revenue taxes, or a back door tax on high incomes raising the cap without a corresponding increase in benefits, breaking that tie between contributions and benefits.You would be "ending Social Security as we know it." Democrats would be attacked for violating fundamental principles of Social Security, and substituting a welfare system. And to support that argument, the opposition would cite FDR. It is the nature of the Social Security system that has resulted in the broad support, just as FDR intended.

If you want progressivity, the income tax system is the place for that. Do not threaten the existence of Social Security by ending the program as it has existed for decades and substituting a welfare program ("the dole&quot

. That is the quickest way to put the program in jeopardy.

Read the entire article here:
http://www.dailykos.com/story/2013/03/29/1197639/-Social-Security-is-Wage-Insurance

X-posted from the SS & Medicare group.
http://www.democraticunderground.com/?com=forum&id=1261

74 replies

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Social Security is Wage Insurance, for wage earners, not people who earn from capital [View all] FogerRox Nov 2013 OP

It is worth "insuring" those income streams to have them in the "pool". TheKentuckian Nov 2013 #1

Re: the income cap- It is worth "insuring" those income streams ? No FogerRox Nov 2013 #4

Why not? Your argument that a too miserly COLA could be paid for a smaller increase changes nothing. TheKentuckian Nov 2013 #11

Yep. People earning millions are generally OK with Social Security. Nye Bevan Nov 2013 #2

The SS benefit formula (AIME) goes up as the income cap goes up FogerRox Nov 2013 #5

I think a lot of DUers want the law to be changed, so that Nye Bevan Nov 2013 #7

And thats unfortunate. Capping benefits forever changes SS FogerRox Nov 2013 #9

They won't be 'capped forever' if the COLA increase is done correctly rather than cheating sabrina 1 Nov 2013 #39

Eliminating the income cap or raising it? FogerRox Nov 2013 #41

The logical solution is to change the benefit formula slightly Silver Swan Dec 2013 #51

Correct, you have just spelled out SS bend points. Are you aware FogerRox Dec 2013 #54

Of course. I generally agree with you. Silver Swan Dec 2013 #65

No, the maximum benefit could go up as well or even be eliminated as long as the right TheKentuckian Nov 2013 #12

Using a means test to cap benefits legally makes SS into a welafre program FogerRox Nov 2013 #33

And I don't suggest one now and I don't get why you are pretending I am. TheKentuckian Dec 2013 #45

They can be given a return on their additional investment and still benefit the fund too. TheKentuckian Nov 2013 #10

CBS pays their president maybe 20 million a year. FogerRox Nov 2013 #13

Of course there will be considerable resistance, sure indicator of something needing doing. TheKentuckian Dec 2013 #44

As much as I want SS to survive, raising the cap substantially will earmark Hoyt Nov 2013 #3

The size of the SS shortfall, so called.... FogerRox Nov 2013 #6

I agree, I've taken some heat here opposing just raising the cap. But if Hoyt Nov 2013 #8

No it won't. The rich don't pay a general fund tax *instead* of SS. They just aren't taxed for SS Romulox Nov 2013 #15

Yes it will. It's a 13% tax increase, that should be applied to other things. Hoyt Nov 2013 #22

Perhaps a leprechaun should provide a pot of gold? It's just as logically related. Romulox Nov 2013 #23

You still don't get it. If we are going to impose a 13% tax increase on upper income, Hoyt Nov 2013 #24

Agreed. A suggestion. FogerRox Nov 2013 #32

Nobody with the power to do so is proposing that. So it's a straw man argument you make, to suggest Romulox Dec 2013 #50

Think of it as ending an undeserved 13% tax break. Egalitarian Thug Nov 2013 #35

SO you want to eliminate the SS income cap? FogerRox Nov 2013 #40

Good, they will have paid in significantly. They are entitled to their payout. TheKentuckian Dec 2013 #46

Legally - if you cap benefits, thats a means test. A means test turns SS into welfare. FogerRox Dec 2013 #64

I don't see how we are going to be on the same page as i don't favor a cap on benefits. TheKentuckian Dec 2013 #67

SS is not welfare because benefits are not capped, income is capped FogerRox Dec 2013 #68

Yeah, I'm leaning mumbo jumbo or at least toward distinction without a difference. TheKentuckian Dec 2013 #71

Well first of all, you obviously haven't been Ferrari shopping lately. Egalitarian Thug Dec 2013 #47

I'm collecting unemployment thru Feb. FogerRox Dec 2013 #59

Yes, the rich shouldn't be asked to contribute a *penny* more. Wouldn't be "fair". Romulox Nov 2013 #14

Make your case, that the income tax is not the way to go about that. FogerRox Nov 2013 #16

SS isn't solvent as to my generation. It must be made so. Income tax won't do that. nt Romulox Nov 2013 #17

Thats not what I asked, you commented about the rich paying their fair share FogerRox Nov 2013 #28

No. SS funds should be used to shore up SS's solvency, by definition. There is no mechanism Romulox Nov 2013 #36

Again, I didnt ask that. FogerRox Nov 2013 #37

You want your nonsense point to be relevant, but it simply is not. Sorry. nt Romulox Dec 2013 #48

It IS solvent. Those projections are based on phony baloney numbers. n/t duffyduff Dec 2013 #69

Social Security is Social Security gulliver Nov 2013 #18

"removing the cap" doesn't make capital gains subject to SS taxation. lumberjack_jeff Nov 2013 #19

Except that if you raise SS taxes on people geek tragedy Nov 2013 #21

Because the formula is progressive... lumberjack_jeff Nov 2013 #25

Please understand, raising the SS income cap automatically raises benefits. See AIME formula. FogerRox Nov 2013 #29

It is a form of inter generational welfare. geek tragedy Nov 2013 #20

There's $2.7 trillion in the trust fund. So is it prepaid welfare? n/t lumberjack_jeff Nov 2013 #26

If there's a gap between assets plus projected income geek tragedy Nov 2013 #27

In the Intermediate scenario, yes there is a gap FogerRox Nov 2013 #31

Weak job creation and no wage growth geek tragedy Nov 2013 #34

If the last 40 years were the model, there would not be an issue with SS Solvency FogerRox Nov 2013 #38

That economic growth was driven by bubbles geek tragedy Nov 2013 #42

Ah right- intelligent, they dont count interest when they say cash negative FogerRox Dec 2013 #57

Horse hockey. SS taxes on your generation do not have to go up to sustain current benefit levels FogerRox Nov 2013 #30

Our economy is in permanent malaise. geek tragedy Nov 2013 #43

That's not what the Congressional Budget Office says. 2038 is in the lives of *CURRENT WORKERS*. Romulox Dec 2013 #49

Read the fine print, this is based on the SST intermediate cost scenario. FogerRox Dec 2013 #53

Ever notice how the only time 1%ers and their Apologists.. 99Forever Dec 2013 #52

IS paying an uber rich senior retiree enough SS to buy a new Italian sports car each year... fair? FogerRox Dec 2013 #55

Take the cap OFF contributions taken from INCOME... 99Forever Dec 2013 #56

Thats a means test. You just made SS a welfare program. FogerRox Dec 2013 #58

Bullshit. 99Forever Dec 2013 #60

A cap on the pay out is a means test. Dictionaries are online these days FogerRox Dec 2013 #62

No. A cap on the pay out is a cap on the pay out. 99Forever Dec 2013 #66

But they only way to insure its survival is to raise the cap. alarimer Dec 2013 #61

Only way, hardly. Create jobs adds more FICA, increase min wage adds more FICA FogerRox Dec 2013 #63

It would survive without raising the cap. There isn't any problem with SS, duffyduff Dec 2013 #70

knr nt slipslidingaway Dec 2013 #72

Evidently, SS is a piggy bank used by the govt. Rex Dec 2013 #73

Here's your 7th K&R Why do recommendations for this OP keep disappearing? Jeffersons Ghost Dec 2013 #74