One of the Tax Increases enacted or, more correctly, reinstated by the ,,Fiscal Cliff’’ Legislation is the additional 2% Social Security Tax. This Tax was reduced from 6,2% to 4,2% by the Bush Tax Cuts; in one of the more bizarre Offshoots of the ,,Theory of Reaganomics,’’ take in less and pay out more, don't worry, as an old Sales Manager used to say, we'll make it up in Volume.
Of course, it doesn't work that Way but, then again, Economics was not Mr. Bush's Forté. We don't know what his Forté was, actually, but certainly Economics was not one of them.
As a Result of this Action and previous underlying Actions, the Social Security Fund is facing a Deficit (Loss) of around $ 100 Billion in 2013; nobody knows for sure, really, but this Estimate is as good as any. Reverting to the 6,2% Rate will alleviate the Problem somewhat but nowhere nearly enough.
Everybody who gets a Wage pays this Tax (matched by an equal Amount in Employer Contributions; the Employer Contributions Rate had not been reduced so it did not have to be revised - interestingly, no ,,Job Creation’’ Argument was made for that by the Bush Administration); however, the more interesting Part is that this Tax applies only to the First $110.000,00 or so of Income that everybody earnes; after that, one is home free; no 6,2% for Employee nor Employer. This Policy, which interestingly, is not practiced by any other major Country which has a Social Security Type System merely exacerbates one of the most regressive Taxes imaginable. Doubling the Social Security Tax Ceiling would eliminate 40-50% of the Annual Deficit and eliminating it altogher would allow for financing of Social Security and Medicare without straining any other Part of the Federal Budget.
Raising or eliminating the Ceiling would affect only that Part of Salaries in excess of $ 110.000,00 which would allow the Tax to become less regressive (although it would still be regressive) and bring a slight Modecum of Equity to the Social Security System as well as resolving another Piece of the Federal Budget and Deficit Dilemma.
The one Caveat would be, not to let the Clintons get Wind of this (admittedly, a hard Feat to accomplish) and throw the additional Revenues into the General Fund (as they did before), claim that somehow they ingeniously balanced the Budget and then leave for someone else after them the Task of straightening out the Mess once again.
Of course, it doesn't work that Way but, then again, Economics was not Mr. Bush's Forté. We don't know what his Forté was, actually, but certainly Economics was not one of them.
As a Result of this Action and previous underlying Actions, the Social Security Fund is facing a Deficit (Loss) of around $ 100 Billion in 2013; nobody knows for sure, really, but this Estimate is as good as any. Reverting to the 6,2% Rate will alleviate the Problem somewhat but nowhere nearly enough.
Everybody who gets a Wage pays this Tax (matched by an equal Amount in Employer Contributions; the Employer Contributions Rate had not been reduced so it did not have to be revised - interestingly, no ,,Job Creation’’ Argument was made for that by the Bush Administration); however, the more interesting Part is that this Tax applies only to the First $110.000,00 or so of Income that everybody earnes; after that, one is home free; no 6,2% for Employee nor Employer. This Policy, which interestingly, is not practiced by any other major Country which has a Social Security Type System merely exacerbates one of the most regressive Taxes imaginable. Doubling the Social Security Tax Ceiling would eliminate 40-50% of the Annual Deficit and eliminating it altogher would allow for financing of Social Security and Medicare without straining any other Part of the Federal Budget.
Raising or eliminating the Ceiling would affect only that Part of Salaries in excess of $ 110.000,00 which would allow the Tax to become less regressive (although it would still be regressive) and bring a slight Modecum of Equity to the Social Security System as well as resolving another Piece of the Federal Budget and Deficit Dilemma.
The one Caveat would be, not to let the Clintons get Wind of this (admittedly, a hard Feat to accomplish) and throw the additional Revenues into the General Fund (as they did before), claim that somehow they ingeniously balanced the Budget and then leave for someone else after them the Task of straightening out the Mess once again.
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