Yes, I did know that. It's technically $110,100 btw :P
Zero is deducted after that is incorrect...they still pay, just not the 6.2% of FICA that goes to SS.
If you earn $110,100 you pay 6.2% into SS or $6,826.20
Then it's capped there.
So at $250K you pay that $6,826.20 (2.73%)
So at $1 mill you pay that $6,826.20 (.68%)
It is regressive but saying they dont pay above that is a lie or a misunderstanding.
Here are my issues with removing the FICA cap:
Liberals always talk about those super wealthy...well removing the cap would hit the upper middle class as well.
$110K to $250K let's say. Seems a bit unfair to me, those are not elitists...and pay a lot of tax already.
The ONLY way I could ever support doing that is if we lowered the income taxes to balance things out, otherwise you're crushing the middle class.
Here's the thing SS benefits are skewed to benefit the lesser off, which is understandable, but higher earners already get a poor rate of return, and it even gets negative at one point. So raising taxes more just makes it worse.
Besides, the program is horribly inefficient...it yields poor returns for what we pay, and it's gunna get worse with time. If you want to call yourself "fair" then you have to realize SS is not.
This could be fixed but neither solution to doing so is gunna be popular.
btw I've been researching a lot of topics lately, SS is fresh in my mind so you couldn't have picked a better one
Edited by JJLehto - May 03 2012 at 14:03