Just as I approach the magic retirement age of 65, possible changes to social security are all over the news. Okay, I’m a boomer, and my retirement age has been raised to 66. I’m not complaining about that. What has me concerned is the possibility of cuts in benefits to retired people, in the form of reduced cost of living increases.
What is wrong with taxing upper income levels to produce more revenue for social security benefits for everyone? According to the AARP, social security will be able to pay full benefits for everyone for the next twenty-five years. The average retirement benefit is about $1,200 per month. And we are seriously considering reducing that amount?
For middle income seniors, social security provides 54% of their income. Social security did not cause the deficit and should not be used to reduce it. Earnings above a certain level, currently about $106,000, are not subject to the social security payroll tax. I say, raise the cap. The current 12.4 percent tax is split between the employee and employer. Why not require those making up to $200,000 to pay the tax? Heck, why have a cap at all?
Twelve percent of a million dollars is – wait for it – $120,000. Multiply that by the number of millionaires in this country – 8.4 million – and voila! Social Security solvency.
It’s not that complicated. Social Security is not the problem.