Watch this. It’s hilarious, and has a lot of truth to impart. Text continues below the video (which is just a little over 3 minutes lont.
Senator Patty Murray (D-WA) is collecting signatures for a petition to “scrap the cap!”
Here’s what this means.
Some members of Congress want to cut Social Security benefits to pay for Wall Street’s greed. Even though 401(k)s were decimated by reckless bankers, home values have plummeted, and nest eggs are gone, conservative politicians defend a lower payroll tax rate for millionaires than what is paid by middle class families.
Social Security has a surplus of more than $2 trillion – enough to cover benefits for 25 years or more. It is fully funded by the payroll contributions of American workers; it doesn’t contribute a dime to the nation’s deficit. And now more than ever, Social Security benefits are critical to more than 50 million Americans who rely on them.
Instead of cutting benefits or raising the retirement age, our elected leaders should protect working class families and “Just Scrap the Cap”.
What’s “the cap”?
Right now, everyone pays Social Security taxes only on the first $106,800 they earn, which means most people pay Social Security taxes on their whole paycheck. But after $106,800, no contribution is made to Social Security – so a whole lot of wealthy people don’t pay a dime in Social Security taxes on most of what they make. That’s “the cap”.
Social Security could pay full benefits forever if millionaires simply paid the same Social Security tax rate as most other people do. Heck, we could even afford to improve benefits a bit.
But unless we tell Congress to “Just Scrap the Cap,” they could cut Social Security benefits instead.
Please sign this petition to tell Congress – tell them: No cuts to benefits, and Scrap the Cap! To reach the petition, please go to Just Scrap The Cap.
Effect of “Scrapping The Cap”
The Congressional Budget Office (CBO) is a federal agency within the legislative branch of the United States government. It is a government agency that provides economic data to Congress. The CBO was created as an independent nonpartisan agency by the Congressional Budget and Impoundment Control Act of 1974.
The CBO reported in July 2010 the effects of a series of policy options on Social Security’s “actuarial balance” shortfall, which over the 75 year horizon is approximately 0.6% of Gross Domestic Product (GDP.) The shortfall has increased from about .54% of GDP in the 6 years since 2004. There is a cost for delay. On a GDP of $14.5 trillion, this represents approximately $90 billion per year; the dollar amount would grow along with GDP.
One policy options that the CBO studied was to “Tax (At Current Rates) All Covered Earnings Above the Taxable Maximum; Do Not Increase Benefits.” The purpose of not increasing benefits is that over time, wealthy individuals who paid a lot of FICA taxes would qualify for truly enormous Social Security benefit amounts. This policy change would result in an increase to Social Security’s OASI trust fund of about 0.9%, which would entirely cover the shortfall into the foreseeable future and would result in some surplus besides, which could be used to improve benefits over what they are now.