FIXING SOCIAL SECURITY

Let's face it! We're never going to solve the Social Security insolvency problem until we get this whole global warming thing under control. As long as the arctic ice is receding, there won't be enough room to set our old folks adrift on an ice floe and watch them float away into oblivion.

Actually, America doesn't have a Social Security problem. What it has in a political will problem. By that I mean that there are not enough political leaders who are willing to place their own political careers on the line to do what is necessary to honor America's long-standing social contract that was established to take care of our retirees and disabled citizens. The Social Security ledger sheet could be placed in order for the next hundred years without raising the current social security tax rate in one simple step: require citizens to pay social security tax on all their earned income, without exception.

Right now, a person who works a 40 hour per week minimum wage job earns $15,080 per year. The Social Security tax is 6.2%, and on an income of $15, 080, the wage-earner pays $935.00 in Social Security tax. Wage earners making $20,000, $30,000, $40,000, $50,000 and $60,000 per year pay the same 6.2% of their earned income (earned income = income from working) in Social Security Tax. So does every other wage earner making up to $113,700 per year in earned income.

This is where things get interesting…or unfair…depending on how you view the situation. Once a wage earner starts making more than $113,700 per year, the percentage of Social Security Tax that wage earner pays actually decreases, and the more a person is paid the lower the percentage a person pays. For example, the Social Security Tax rate on a person having earned income of one million dollars in a year is seven/tenths of one percent. In real numbers, a millionaire will pay $7,049 dollars per year in social security tax. When you compare the millionaire to the minimum wage worker, the millionaire makes 63 times more money, but only pays 7.5 times more Social Security tax. Where's the fairness in that system? Why should a guy working at a minimum wage job pay a higher social security tax rate than a guy earning a million dollar per year salary?

Social Security was created as a financial safety net, but for the wealthiest earners in our society, it's actually a financial windfall. Assume a millionaire pays $7,049 dollars into Social Security for forty (40) years. The millionaire will have paid $281,960 in social security tax over that time span. Now, assume that same individual collects social security for 20 years following their retirement. At the current top rate of $2,162 per month, the millionaire will have collected of total of $518,880 dollars. That's a tidy sum considering the millionaire already had forty million dollars in earned income. This is one place where Republicans never, ever talk about an across-the-board flat tax rate.

If one Social Security tax rate applied to all earned income, American would never have to worry about the insolvency of the Social Security Trust Fund. The baby boomer generation would come and go without bankrupting the security net that has protected seniors since the days of the Great Depression. This fix is not rocket science. It just takes something we're in short supply of lately: political will!