It’s inequitable to raise taxes solely on people who are already paying more than those who make more money than they do, just because they don’t have the power to stop us. We need to actually tax the actually wealthy.
It’s inequitable to raise taxes solely on people who are already paying more than those who make more money than they do, just because they don’t have the power to stop us. We need to actually tax the actually wealthy.
Of course the super-rich need to be taxed more. That doesn't mean that, for example, higher wages should continue to be taxed less than lower wages for Social Security.
Because of how benefits are calculated, the flat payroll tax that everyone pays on income up to the cap, returns a lesser percentage the higher the wage on which taxes are paid (all else equal). The return on the last dollar paid is less than 1/6th that on the first dollar paid. The folks paying up to the cap are already subsidizing the system substantially. The donut hole idea (which I generated independently over 20 years ago before ever having capped out myself), has a strong basis in equity. The slowly closing donut hole much less so.
I'm not really understanding you, but I do know that higher income is taxed less for Social Security, and there's no possible way anyone can justify that to me.
Social Security isn’t just a tax, it takes with one hand and gives back more with the other. Ignoring the insurance value, which makes it a net positive for pretty much everybody, if you look at the cost net of benefits received back, it’s effectively a time delayed negative income tax for low earners with huge returns that decline as you go up the income scale until the marginal rate goes positive, and top contributors are subsidizing others, with the cap coming before the overall effective rate becomes a positive tax. Everybody benefits, but without the cap that’s no longer true.
As I pointed out before, when all forms of tax are considered, the people in the donut hole are mostly already paying significantly higher effective tax rates than most others, including the people who make more than they do.
It’s inequitable to raise taxes solely on people who are already paying more than those who make more money than they do, just because they don’t have the power to stop us. We need to actually tax the actually wealthy.
Of course the super-rich need to be taxed more. That doesn't mean that, for example, higher wages should continue to be taxed less than lower wages for Social Security.
Because of how benefits are calculated, the flat payroll tax that everyone pays on income up to the cap, returns a lesser percentage the higher the wage on which taxes are paid (all else equal). The return on the last dollar paid is less than 1/6th that on the first dollar paid. The folks paying up to the cap are already subsidizing the system substantially. The donut hole idea (which I generated independently over 20 years ago before ever having capped out myself), has a strong basis in equity. The slowly closing donut hole much less so.
I'm not really understanding you, but I do know that higher income is taxed less for Social Security, and there's no possible way anyone can justify that to me.
Social Security isn’t just a tax, it takes with one hand and gives back more with the other. Ignoring the insurance value, which makes it a net positive for pretty much everybody, if you look at the cost net of benefits received back, it’s effectively a time delayed negative income tax for low earners with huge returns that decline as you go up the income scale until the marginal rate goes positive, and top contributors are subsidizing others, with the cap coming before the overall effective rate becomes a positive tax. Everybody benefits, but without the cap that’s no longer true.
I'm not buying that as a good argument. Taxing higher salaries at a lower rate is regressive, period.
As I pointed out before, when all forms of tax are considered, the people in the donut hole are mostly already paying significantly higher effective tax rates than most others, including the people who make more than they do.