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Wednesday, 15 January 2014 10:30

Make Wealthy Pay Social Security Taxes on Their Full Salaries -- and Retirement Benefits Could Likely Be Expanded for All

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asocsec221 15According to RT.com, the 900 wealthiest Americans paid their full Social Security tax obligation for 2014 by January 2nd.

How is that possible?

As BuzzFlash at Truthout has pointed out before, there is an inexplicable cap on collecting Social Security tax above an income of $117,000 a year.  Most payrolled Americans pay 6.2 percent of their income into the Social Security Trust Fund (the employer pays another 6.2 percent).  But if you are a high-flying CEO who earns $50 million a year, $49,883,000 of your income is exempt from Social Security taxes.

If the wealthy paid Social Security taxes on their full salaries (and we aren't even talking stock options and other forms of bonuses that are not subject to Social Security taxation) the Social Security Trust Fund would likely be able to expand benefits.  This would be a far cry from the ongoing right wing -- and White House -- efforts to reach a "grand bargain" on cutting Social Security benefits (even though there is no immediate crisis and any problems that do exist largely result from the government borrowing from the fund).

As noted in the RT.com article:

Teresa Ghilarducci, an economics professor at the New School for Social Research, wrote that if everyone eligible paid all year long, “the Social security system would be solvent indefinitely and they [the plutocrats] still would be the richest and prettiest in all the land.”

As BuzzFlash at Truthout has pointed out many a time, the average monthly Social Security check for a retiree is just $1,269 -- and the recipient earned that many by paying into the fund. (Skeptics should note that the source of the average monthly check is the Social Security Administration.) An important point that we repeat in every article about Social Security is that it is not an "entitlement"; it is an earned pension plan.

Most of those CEOs who have already paid their full Social Security obligation for the year, based on the $117,000 income taxation cap, also receive stock options and other benefits.  As Teresa Ghilarducci implied, they would probably not even notice a ding in their fortunes if they paid their full fair share of Social Security taxes.

Those of us who pay Social Security through December 31st don't get the breaks and subsidies that the wealthy do.  We notice the Social Security and Medicare taxes removed from our paychecks (FICA) because we need to budget our earnings.

Not so for the wealthiest in the land, who get tax break after tax break -- and would rather have the elderly eat cat food than have to buy a third yacht that doesn't have a sauna in it.

When a nation values the accumulation of wealth over the welfare of its citizens, it has lost its soul.  So it goes with corporate honchos and their legal right to have the vast majority of their income untaxed by Social Security.

(Photo: LendingMemo)