Wednesday, May 18, 2011

Guest Editorial - Matthew A. Woodmancy on Social Security

Saving Social Security

Social Security has been called the third rail of American Politics: if you touch it, you die.

That is exactly the kind of thinking that has led to Social Security reform falling not only between the cracks, but has so endangered the program that experts are telling us by as early as 2020, the program will no longer be able to sustain the millions of Americans who will be depending on it to survive.

The streak of not talking about Social Security ends now. We have a real problem in this country and now is the time for real solutions. Taxpayers pay 6.2% in Social Security taxes while their employers pay a matching amount. Self-employed workers pay it all themselves. But it caps at 12.4% and nobody pays any Social Security tax at all on any income over $108,600 a year. That means individuals pay a maximum of $6,733.20 and their employer pays the same amount. Once again the Republicans are protecting their power base of wealthy donors while leaving 98% of Americans out in the cold.

If we were to raise the tax on Social Security 2.2% and split that increase equally between taxpayer and employer, we would ensure that Social Security is there for the next 61 years. In 1998, a general tax increase of 2.2 percent was planned out to aid in social security, but in 2011 it still has yet to happen. The idea of a 2.2% solution is simple, but short-term, at best. With the current funds, Social Security can exist until 2032, and with the 2.2% it could last until 2072. So that isn’t the only step that needs to be taken.

A CEO, a major sports figure, or actually anyone making more than $108,600.00 a year gets a free ride on all income above that level. If that CEO makes $6 million dollars in a year, his Social Security contribution has been paid in the first week. The rest of their income is not taxed for Social Security. The average American will always be paying Social Security tax on 100% of their income while the richest among us will never pay more. Somehow they think their obligation to their employees ends at the failed pension plans and diminishing health plans that now permeate our society and threaten to destroy our economy. They are wrong.

America is a land of opportunity, a land where everyone deserves to receive a living income when they have reached the age where they can no longer work. I am not talking about a free ride for the poor or the rich, but a level playing field where the wealthy can still enjoy the fruits of their labor while allowing the average Americans to live out their lives in comfort, not poverty.

If we level the playing field and make everyone pay the same 6.2%, no matter of how much they make, we can save Social Security. Employer contributions would cap at 6.2% of $200,000.00, and the remaining income above $200,000.00 would be paid fully by the employee. In this way, we shift the burden of Social Security on all Americans, preserve the ability of employers to create jobs and pay decent living wages, and protect our senior citizens from poverty.

No comments:

Post a Comment