by John Koraska

February 26, 2005

 

For Social Security updates please visit my new website US Public Policy

 

 

The debate over raising or eliminating the cap ($90,000 6.2% 2005) that limits how much higher-paid workers contribute to the Social Security system are heating up. The President is losing support from his own party because he left the issue on the negotiating table.

 

Not surprisingly, recent opinion polls show over 2/3 of those polled support raising the income ceiling. Supporters of the increase are, of course, those who are NOT subject to pay the increased taxes. Among the opposition are those required to pay the extra tax and their employers who have to match any increase.

 

Ironically, thousands of working couples already have combined incomes that exceed the existing $90000 cap. For example, an employee with a $75k income and a spouse with $60k income pay FICA taxes on $135k (50% more than the cap). There are no provisions in law that allows a refund of the cumulative amount paid in excess of the individual cap. Even more peculiar is the fact that the working couple will not get the maximum benefit accorded to one who continuously pays taxes up to the ceiling. The couple gets to make a choice when they apply for Social Security ? Combining their incomes to determine their benefits IS NOT one of them.

 

Interestingly, a working couple's combined wages determine their nominal federal income tax bracket; but this principle does not transfer to the amount of benefits they should receive based on their combined excess FICA taxes paid into the program.

 

  Pay More! Get Less! Is that American JUSTICE? What are the thoughts of a working mother after working fulltime and paying for years of Day Care as she ponders the leisurely life of a spouse of an EXCESSIVELY compensated Executive or Politician, lazing, with martini in hand, overlooking the 18th green WHO is guaranteed by LAW to receive a higher Social Security benefit JUST by virtue of marriage. Who's welfare is being attended to? Where is the EQUITY, and where is EQUAL JUSTICE UNDER LAW?

Looking for a legitimate issue for your Congressman? Look no further!

 

Social Security Taxation Income Ceiling - (Art#8)