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| Re: Conservative's View of Social Security (751058) | |||
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Re: Conservative's View of Social Security |
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Posted by SMAZ on Sat Mar 12 18:14:25 2011, in response to Re: Conservative's View of Social Security, posted by AlM on Sat Mar 12 16:49:06 2011. Just applying the 6.45% to all income instead of 108K isn't sufficient to make up the deficit.Actually it is. Not only that but it doesn't even have to be done all at once. You can also tack half (3.1%) of the individual rate on capital gains too and the whole individual rate (6.2%) on estate taxes and on otherwise tax-free muni bond gains. When the tax cuts for the rich are set to expire next year, I would make the current income tax rates permanent but tack on FICA at half the rate for currently exempt incomes (while dropping the 28% bracket to 25%). This is essentially a tax cut. I would establish the entire 6.2% employer rate starting at $400,000 and above but freezing it there so that the 0% donut hole between $108,000-400,000 would gradually close with time. Once this is no longer sufficient to keep the trust fund from borrowing from general revenues, that half-rate on the employee side would gradually increase on a pay-as-you-go basis. This would put SS on sound ground for eternity without further sinking the general revenue budget. At that point, that budget would have to be dealt with in order to close its long-term structural deficits. |
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