Mostly About Social Security – Briefly

Sen. Sheldon Whitehouse (D-R.I.) and Rep. Brendan Boyle (D-Pa.) re-introduced a bicameral bill, “The Medicare and Social Security Fair Share Act.” The aim of the bill is to require taxpayers with yearly incomes of more than $400,000 to contribute a fairer share of their income to the two programs.

This is the opposite of what Angry Bear’s Dale Coberly, Bruce Webb, and Arnie were proposing as a fix for Social Security. Their solution (as accepted by a Congressional Representative) was to incrementally increase Social Security withholding one tenth of one percent each year for 10 years for both employee and companies (each). This was accepted as a solution over ten years ago. As is typical, Congress did “nothing” even after knowing of the potential shortcoming of the Social Security Trust funds.

Similar could still be done at a greater percentage yearly.

Back to the politician proposal . . .

What the Whitehouse and Boyle Bill does is close loopholes which forces the wealthy to pay more based on income. This would be accomplished in two areas.

– Lift the Social Security tax cap to ensure that no matter the source of their income, high-income taxpayers would pay the same tax rate on their income exceeding the threshold.

– Increase the rate for income above $400,000 by 1.2 percent.

– Fix the loophole for owners of pass-through businesses like hedge funds and private equity firms with more than $400,000 in annual income cannot avoid Medicare taxes.

And of course this would work. But why do such a drastic measure when something far simpler can back Social Security. and make it solvent for 75 years. Incremental increases in withholding was the backbone of the Northwest Plan.

When there was still 10 or more years left in solvency, the Northwest Plan as promoted by Bruce Webb, Dale Coberly and Arnie would guarantee solvency in ten years using the same incremental increases. Granted we are within the ten years when the SS Trust is depleted. The nation could double up with a 2 tenths of 1 percent increase in Social Security for five years and reach solvency. It would apply to both individuals and businesses for each employee.

Extreme taxation of the wealthy takes Social Security away from Citizens as being their plan. Over the years such has been the third rail to which no politician would touch. The Whitehouse plan would change such a threat and make it open to benefit degrading adjustments to placate the wealthy as more of their income would be exposed.

Don’t change the political balance.

“Whitehouse, Boyle Reintroduce Legislation to Extend Social Security and Medicare Solvency Indefinitely,” Senator Sheldon Whitehouse