If you work for a living, you know all about the Social Security tax your employer withholds from your paycheck each pay cycle.
The total is 12.4%; of which you, as the employee, pay half and your employer pays the other half.
And, God help you if you’re self-employed and have employees of your own. Not only will you have to pay half of your employees’ Social Security tax, you’ll have to pay ALL of your own—the entire 12.4%.
There is a cap, however, on the amount of earnings that are subject to the tax. Currently that cap is $102,000 per year. So, if you earn in excess of this amount, the excess is not subject to Social Security tax.
This drives the dyed-in-the-wool Liberals right up the proverbial wall. They immediately point out how this is a Conservative attempt to protect those filthy rich people.
The political hot air blows profusely—especially around reelection time—hinting at raising the cap or eliminating it altogether.
The proponents of the move claim that it’ll kill two birds with one stone. First it will end the tax-free frenzy for those wanton rich people.
Second, it will help solve an impending shortfall in Social Security benefits to those who retire.
In fact, Barack Obama has already stated that he favors removing the cap… not raising it, but REMOVING it completely.
When I read about this—quite by accident—I called my friends of ten years, Jack and Martha (No last names. They really are friends and I don’t want to embarrass them).
“Barack Obama thinks you guys are rich,” I told Martha over the phone. “Wow,” she replied, “Wait til I tell Jack!”
Jack came on the line and asked me how the hell Barack Obama knows how much he and Martha make.
“He has no idea,” I replied. “He wants to remove the current $102,000 cap on Social Security earnings in order to strengthen the fund and make the rich pay their fair share.”
I further explained that, “by implication, he thinks you two must be rich and he’s promising all the poor folks that he’s going to make you pay up.”
Jack and Martha have been married for ten years. They have three children, ages eight, six, and three.
He has worked for a software developer company for the last eight years, currently earning $65,000 a year plus major medical benefits for which he pays group rates each pay cycle.
Martha works a full-time job outside the home also. I’m not sure of her title, but it calls for a college degree and she earns $46,509.00 a year without major medical because she’s under Jack’s program.
These folks do not live an extravagant life style. She drives a newer model compact car—still making payments. He drives a debt-free old clunker.
Their cost of living has gone through the ceiling like everyone else’s has. Plus, their third child has special medical needs for which their insurance co-pays have skyrocketed over the last year and a half.
In order to meet all of their financial obligations, and to satiate the chronic addictions of eating regularly and living indoors, Jack took a second job writing non-competing code for another software company.
He averages about 30-hours a week, earning an additional $31,000 a year. So their combined family gross income, for the past two years, at least, is $142,500.
And, the way things are going economically right now, this is not going to change anytime soon—at least not voluntarily.
Senator Obama needs to explain how taxing this family an additional $5,022 a year will ensure that those rich people pay their fair share.
Families like Jack and Martha’s outnumber those earning a great deal more… you know, the ones he’s REALLY out to get, by a ratio of 500 to 1.
I think the impact, if any at all, won’t be worth the effort to figure it out. But, hell, this has never stopped an inept Congress before.
There is no denying that Social Security is in trouble. There is also no denying that we have to fix the problem. And QUICKLY!
However, we can do it WITHOUT privatizing it, increasing the cap, or eliminating it altogether.
The problem is that YOU guys down there on the beltway won’t do it if it means cutting into your mad money.
Try this. Leave the rate alone. Leave the cap alone. Just take Social Security tax revenue OUT of the general fund.
Put it into an interest-bearing fund and make it untouchable for any reason other than retirement and SSI needs.
This will mean, of course, that people like Senator Babbling Byrd won’t be able to deliver the same amount of annual pork to their home states.
It will also mean some serious cuts into the rest of the Congress’ spending habits.
We face many problems today that YOU people can solve a lot easier than you want to admit. After all, you people DID create most of them with your knee-jerk reactions to insure reelection.
Everyone in the United States Congress agrees on what they are. So, why don’t you get together and solve them?
I mentioned that I heard of Senator Obama’s desire to eliminate the Social Security cap by accident. There’s a reason for this, too.
It’s due to an alarming increase in the ineptness factor on the part of the reporting media. The 24-hour cable talking heads have too much time to fill.
They devote incredible amounts of energy to meaningless “gotcha” scenarios. The Reverend Wright/Barack Obama saga takes on a surreal precedence over a protracted, failing war effort.
Hillary Clinton swigging a shot of whiskey and a beer chaser hilariously trumps a crumbling economy and the fact that clueless George still thinks we’re doing OK.
The next United States President—regardless of party affiliation—will be facing a national debt topping the $10-trillion mark. It’s already at $9.3-trillion and growing at a pace of $1.45-billion a day!
On top of this, there are tax-cut issues that the next one must address immediately. The luxury of postponing action the way the last one did will no longer be an option.
With the exception of a few objective investigative reporters, we don’t hear much about the things that really matter.
I fear that the reporting media has become a Pavlovian dog. The politicians have trained them to ask the wrong questions—on cue—thereby rendering the answers moot.
Edward R. Murrow and others like him—all long dead—must be turning over in their graves!
One of three sitting United States Senators is going to be our next President. For the first time in our history, both a woman and a black man have a realistic chance of winning.
While I think this is both significant and wonderful, I resent the fact that the press has reduced the contest to nothing more than gender, race, and age, as well as a contest to see which news outlet can acquire the greatest number of meaningless gotchas!
There are millions of other people in this country working two, three, and sometimes four jobs to support their families. On top, most of them fall way short of that $102,000 combined joint gross amount.
I’m not trying to diminish their efforts or plights in life. However, placing everyone in the same situation and reducing society to the classes of the insanely rich and the working poor solves nothing.
Monetary benevolence is a function of monetary affluence. It always has been. While the availability of the latter does not guarantee the former, eliminating the affluence will absolutely guarantee the elimination of ALL benevolence.
I’ll be back next week. I have a lot more questions to ask these candidates irrespective of gender, race, age, or ability to swig whiskey and beer.
Joe Walther is a freelance writer and publisher of The True Facts. You may comment on his column by clicking here.