Comments on: morans!

By: Dave Sorensen

Dave Sorensen — Thu, 20 Aug 2009 18:14:16 +0000

Thank You ,Resolutionary. Shane’s comment about removing the ” cap on benefits” makes no sense. Unlimited benefits? Say what?

By: Resolutionary

Resolutionary — Thu, 20 Aug 2009 18:13:51 +0000

A quick technical clarification for the benefit of any cringing PDD CPA’s out there:

In Mark’s example he owes 12.4% on 92.5% of his $50,000 salary which equals $5,735 or 11.5% (opposed to 12.4%) of his gross income.

Now, back to the morans…

By: Resolutionary

Resolutionary — Thu, 20 Aug 2009 15:17:07 +0000

Oh yeah, and I love teabaggers too. Cheers to Barney Frank for his appropriate and hilarious response.

By: Resolutionary

Resolutionary — Thu, 20 Aug 2009 15:00:31 +0000

You said, “Do the math.” That’s all a tax policy geek needs to hear.

Social Security tax is paid on 6.2% by both employee and employer on EARNED income up to a cap (in 2009) of $106,800. The cap is indexed to inflation and increases every year.

A flat tax is a tax paid at the same percentage by people of all incomes. A progressive tax is paid at higher rates by people who earn more, and a regressive tax is paid at higher rates by people who earn less. Social Security is generally a regressive tax.

Mathew works at Wal-Mart and makes $18,720/year. He pays $1,161/year in social security taxes or 6.2% of his gross income.

Mark is a self employed contractor who makes $50,000/year. He pays 6.2% or $3,100 for his employee contribution but he’s also regarded as the employer, so he must pay another 6.2% or $3,100 for a total contribution of $6,200 or 12.4% of his gross income.

Luke is a Goldman Sachs investment banker who is still sells credit default swaps. Luke is paid a $450,000 salary and a $500,000 bonus. He pays 6.2% of his income up to the cap of $106,800. This means he pays $6,622 in social security or .07% of his gross income.

John is wealthy and does not work. He earns $170,000 in interest, $385,000 in dividends, $1,200,000 in capital gains, and $320,000 from his commercial real estate, for a total of $2,075,000. He pays $0 and 0% in social security taxes because he has no earned income.

By: Nick

Nick — Thu, 20 Aug 2009 12:44:01 +0000

5% tax rate on $105,000?? I’m firing my tax guy! Who can I go to, to get that rate and not go to jail???

By: Dave Sorensen

Dave Sorensen — Thu, 20 Aug 2009 12:09:06 +0000

I’ve never heard anyone mention removing a ” cap on benefits”. The point is: this is a regressive tax- the rich pay a minute fraction of their income and the rest of us pay a significant chunk towards SS. By the way, Mr “anti-tax” Ronald Reagan raised the payroll tax on working people while cutting taxes on corporations. Thanks Ron. Also: “Passive income” ( I love that phrase), such as stock returns, pays no SS tax.

By: Todd Gremmels

Todd Gremmels — Thu, 20 Aug 2009 02:11:09 +0000

Sorry I missed a point and it is that the cap on benefits would not be removed hence not being a wash as well the people who need it would get it.

By: Todd Gremmels

Todd Gremmels — Thu, 20 Aug 2009 01:43:59 +0000

People like Congressman Oberstar have done the math and the result is more money for the people that need it.

In retort if you make so much money then why do you need the Social Security back?

Also removing the cap on benefits would defeat the purpose of spreading out the money for the people that need it.

Social security and Medicare just need a few tweeks in their incomes not a reduction in service.

By: Shane

Shane — Thu, 20 Aug 2009 00:32:54 +0000

The idea of removing the Social Security cap is political bullshit. If you remove the cap on witholdings, the corresponding cap on benefits also should be removed.

You make more money you pay more in, once you hit 65 you would take more out. It ends up being a wash. People who make over the cap income can save for their own retirement and do not need Social Security. Hence the cap.

Do the math.

By: Todd Gremmels

Todd Gremmels — Wed, 19 Aug 2009 21:28:28 +0000

It needs to stop Dave and it is the main bone of contention in all this blah-blah-blah.

peace
Todd Gremmels

PS I am thinking that mayor is to short sighted-maybe I should run for congressperson or State Rep.