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Friday, June 5, 2015

REICH: Scrap the cap and fix Social Security now

Robert Reich. (photo: Richard Morgenstein)
Robert Reich. (photo: Richard Morgenstein)

Making the Economy Work for Everyone - Step #3: Expand Social Security

By Robert Reich, Robert Reich's Blog
16 May 15
 
merica is on the cusp of a retirement crisis. Millions of Americans are already in danger of not being able to maintain their standard of living in retirement, and the problem is getting worse.

You hear a lot about how corporations are struggling to make good on their pension promises, and how Social Security won’t be there for you in retirement.
Baloney on both counts.

Corporations are awash in money, and they could afford to provide their hourly workers with pensions when they retire. Years ago, they routinely provided “defined benefit” pensions – a fixed amount every month after retirement.

Nowadays most workers are lucky if their company matches what they’re able to put away. The typical firm does no more than offer a 401-K plan that depends entirely on worker savings.

But many workers get such low pay during their working lives that they haven’t been able to save for retirement.

At the same time, the cost of pharmaceuticals keeps rising, taking an ever-bigger bite out of retiree incomes.

That means Social Security is more important than ever. Today, two-thirds of seniors derive over half of their income from Social Security, and one-third of seniors rely on it for at least 90% of their income. Without it, the poverty rate of our seniors would be 45% instead of 10%.
Social Security will be there for you in your retirement. The problem is it won’t pay you enough.

That’s why it’s important to expand Social Security – not cut Social Security benefits.
How?

We can afford to increase Social Security benefits, as well as help ensure the solvency of Social Security, by eliminating the cap on income subject to Social Security taxes.

Unlike the Medicare payroll tax that everyone pays as a small portion of their total incomes, the Social Security payroll tax is capped. Any income over $118,500 this year is exempt from it. Which means a billionaire pays the same Social Security payroll tax as someone earning $118,500.

This isn’t fair and it’s not sensible. Billionaires and millionaires should pay just like everyone else.

Scrap the cap, and not only is Social Security more secure for you and your kids, but it will be able to pay out even more benefits in your retirement.

America’s seniors, who paid in to Social Security over their lifetimes, deserve enough retirement income to live on.

If wealthy Americans pay their fair share, we can make sure tomorrow’s seniors get the Social Security they truly need.

 Comments

+16 # dheiser41 2015-05-16 09:13
RE: His final sentence...If wealthy Americans paid their fair share, we would not be in this mess. The economy would be working for all and not just the few at the top of the income ladder. For too long they have bought and controlled Congress and perhaps even the White House. Hey, everyone, start making monthly donations to RSN and let's get the truth out there for everyone. We need an alternative to the mass media that has been bought by the wealthy and the corporations and only reports what they want the people to know.
+7 # reiverpacific 2015-05-16 10:54
Ironically, it's the same stinkin' rich -with as always, a few exceptions- and their knee, arm and head-jerk puppets in both houses becoming millionaires in office, who are trying to dismantle what little Social Safety net remains for we "Little people" as we are mockingly referred to in the halls of out-of-touch power.
If we must be honest, it's really a return to feudalism they are after, in which the peasant majority are kept in filth and poverty just sustained enough to bow, scrape and labor to the Lords and Kingmakers without any means of redress, the SCOTUS male majority as their last resource to keep their Lud'ships in absolute hereditary power.
If you take a hard, honest look at the pyramid that is the US, it's not as much of a fantasy as it appears.
The much-touted "Civilization" and "Democracy", never fully achieved, are in fast-reverse gear as far as this "furrier" can observe.
+5 # Robbee 2015-05-16 11:23
if we, by con-am, get money out of politics, rich folks will be unable to buy politicians, and government can start working for we the people again.

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