by Peter Antonowicz
There are individuals who claim that the Social Security system is going bankrupt. Those same people want our younger citizenry to believe that Social Security will not remain intact in the future, meaning Social Security will not ‘be there’ to protect them when it is time for them to retire.
This claim is merely a scam, propagated by political groups and politicians who desire to undermine and replace the Social Security system. Politicians have been hatching this scheme for decades in order to undermine the public’s confidence in the Social Security retirement and disability system.
The theory goes: If politicians can convince young people that they will not be able to ‘count on’ social security, those same young people will not object when Social Security is taken away. Regrettably, the people who support Social Security have not been successful in countering this disinformation campaign.
SAVING THE SOCIAL
SECURITY TRUST FUND
The viability of the Social Security Administration can be sustained without a dramatic overhaul and without raising the retirement age. To begin with, we must remove the cap on taxable income for Social Security purposes. In 2019, the Social Security payroll tax caps at $132,900 in annual earnings. This means any individual earning more than that amount pays nothing ($0.00) in Social Security taxes on earnings over $132,900.
While most of us earn far less than that, there are plenty of people earning in excess of that dollar amount. While most citizens are paying Social Security taxes on 100% of their income, those citizens earning $250,000 a year are only paying Social Security taxes on 53% of their income.
Let’s do the math: Those earning $500,000 a year pay Social Security taxes on only 26% of their income and individuals earning $1 million per year pay Social Security taxes on only 13% of their income. If we remove this artificial cap entirely, the value of the Social Security Trust fund would increase dramatically, and the benefits for all citizens would be secure well into the future.
WHO PROFITS FROM THIS?
As you can see, this has become an enormous tax benefit for high earners and the wealthy. It is an enormous tax benefit to corporations as well. After all, an employer only matches the employee’s payment.
Any financial insecurity in the Social Security system would be greatly alleviated by requiring all American citizens to pay their fair share to the Social Security system.