Social Security to start cashing Uncle Sam's IOUs

[gaelic cowboy]

From the article: "Social Security is financed by payroll taxes — employers and employees must each pay a 6.2 percent tax on workers' earnings up to $106,800."

So are earnings over $106 800 not taxed for Social Security?

I would imagine it goes to a higher rate at that point

[johnhughthom]

I would imagine it goes to a higher rate at that point

That's what I would have thought, but the article seems to imply (by omission) you don't pay anything on higher earnings.

[Centurion1]

i would be willing to forego it right now. im sure many middle aged americans would too.

you try telling greedy old people you arent giving them money any more.

It has to be scrapped people plan it into their retirement plans FDR never intended it to go so far.

[Louis VI the Fat]

opt out of this ponzi scheme please?

One shall have to increase the taxation level, decrease the payout, or raise retirement age.

The system isn't broken. It's just a confusing pile of accounting tricks. Social security creates the impression of each taxpayer paying towards his own retirement/disability trust fund. Whereas for practical purposes, it more closely resembles an ordinary tax.

The productive generation will always have to pay for the unproductive generation, whether through a trust fund or taxes. The 'ponzi scheme' effect is created by demographic changes. The US faces the same demographic problems as the rest of the industrialised world. We should've done what Norway is doing with its oil revenue: buy up the newly developing countries. Then let this pay for the pensioner explosion.

Too late for that. The babyboomer generation has borrowed, instead of invested. They leave us with a double whammy: their loans, plus the Social Secutiry explosion. Both will have to be paid off at the same time. The whole industrialised world facing this same problem, we can't borrow from one another. We have to borrow even more elsewhere, or accept a steep decline in living standard. Either way: I suggest learning Mandarin.

I would imagine it goes to a higher rate at that point

Don't be silly. Where do you think you are, the Soviet Union? Social Security is a regressive tax system.