Let’s first understand how the social security system is structured. Many people assume that their payroll deductions go into a social security account with their name on it. This assumption is incorrect. The system was designed to deduct social security withholding tax from all current employees in order to pay social security expenses for current retirees.
This means, there are no accounts accumulating funds for your retirement. Once you are qualified, at the time you retire, it will be the current workforce’s withholding tax that is paying your monthly benefit.
There are many ways to make social security solvent. The single least complicated way is to increase the social security withholding cap. Currently social security withholdings are coming out of your paycheck until you reach the cap of 118,000 a year. Once this earning level is reached, no more withholdings come out of your paycheck until the next year.
Most of us Americans never reach that cap. Therefore, we pay social security taxes through the entire year. If you made an annual salary of one million, four hundred sixteen thousand dollars ($1,416,000.00), you would have reached the $118,000 cap on the last day of January. You would not continue paying social security taxes the next 11 months. It’s not unusual for annual executive salaries to exceed that 1.4-million-dollar figure. If you were a multinational corporate CEO and your executive annual compensation package was $30,680,000.00, you would reach the social security cap after one 8-hour day. This means from January 02 through the rest of the year, you would not pay a nickel more into social security.
Our government is a democracy, that means that the majority should rule. However, I just explained to you how the top one tenth of one percent (0.1%), clearly the slightest of minorities, skewed the social security laws to avoid paying their fair share. This is one reason the Social Security System is underfunded!
It’s time for us, as the majority, to raise the Social Security withholding cap multiple times higher so that the highest 0.1% percent of the population pays their fair share. As I said, this is the single least complicated way to make social security solvent for the next 30-50 years.
I not only want to make social security solvent for 30-50 years, I want to increase monthly benefits and reduce or eliminate withholdings from social security checks. I also want to restore a fairer cost of living index calculated upon lives of retirees, not an unrelated portion of the population as it is calculated now.
My six proposed policies, together, will dramatically increase potential earnings of millions of Americans. Our government can then expect a very respectable rise in employee withholding revenues. In short, the more you make, the more you pay in withholding taxes. That would dramatically raise revenues for the Federal Government allowing increases in social security benefits to the current retirees.