What should we do with Social Security Benefits?
1- Make people who don't get W2's pay their taxes.
Those of us who are salaried are subsidizing the whole
country while the self-employed, the sub-s people, the
"contractors", claim expenses that don't exist
and declare no profit...therefore, they owe no taxes.
Amazing. And every day, there's another company laying
off employees then bringing them back as "contractors"
(no benefits, among other things), creating more people
who won't pay their fair share of taxes. This would
not only increase contributions to Social Security but
it would also help end the deficit.
2- Bring back the annual earnings test for Social Security
benefits. It used to be that you lost $1 for every $2
you earned over the limit (now $12000) if you worked
while getting Social Security. Only at age 72 (later
age 70) could you receive your whole Social Security
benefit no matter how much you earned. In recent years,
that limit has changed. Once you're full retirement
age (65 to 67), you can get your whole Social Security
benefit even though you're not retired, no matter how
much you are earning! That's ridiculous. It's a retirement
benefit. If the Civil Service Retirement System worked
under the same rules, we would already be drawing his
pension even though he is still working.
Of course, the annual earnings test, in practice, mostly
affects W2 employees. The self-employed have a zillion
ways of getting around it...if you don't report earnings,
nothing needs to be withheld. How cool is that?
The chances that any politician will subscribe to either
of the above views are zip. Elimination of the annual
earnings test at an earlier age (even though people
are living longer) is a big deal for older people (who
vote in disproportionately high numbers). As for making
people pay their taxes...that's the real "third
rail" of American politics, especially for Republicans.
You can't interfere with Americans' "right"
to cheat on their taxes.
Finally, I advise everyone to read the Social Security
for Dummies that is going around on the internet.
Commenting on the 2005 Motley Fools' article 7
Social Security Myths:
I thought the Motley Fool was about 3/4 right. One
of the big problems is that Social Security was supposed
to supplement private pensions...and employers are doing
everything they can to cheat their employees out of
them if they ever offered one. Social Security is supposed
to create a guaranteed base for your retirement. It's
not supposed to be the whole thing. If it were, your
Social Security taxes would have to be higher, like
our Civil Service Retirement System contributions are
(over 7 1/2 per cent and on top of that we pay Medicare tax--but CSRS pays very little in disability benefits
and very little in survivor benefits, unlike Social
Security. Note that Civil service employees hired after
1983 also pay into Social Security but have a lower
retirement contributions.
-Submitted by Sheri of Georgia
- Send us your view on Social Security or any other
money related issue by writing to webmaster (at) banklady.com
|
