Obama's Social Security welfare

Discussion in 'Politics' started by jreeves, Apr 22, 2008.

  1. jreeves
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    jreeves Senior Member

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    Social Security as a "Welfare Program"

    The United States already collects far more Social Security taxes from high earners than other countries do. While payroll tax rates are often higher in other developed countries, the level of wages to which these rates apply is generally lower.

    The current U.S. wage cap equals around 2.9 times average earnings, far above the 1.9 times average among OECD countries. In Canada and France, payroll taxes are levied only up to the average wage; in the UK, to 1.15 times the average wage; and in Germany and Japan, to 1.5 times.[6] Social Security is already more progressive than the typical OECD country's pension program, and Obama's plan would make it more so.

    This aspect of Obama's proposal presents perhaps the greatest potential cost: the effect on the character of the program itself. Unlike traditional welfare programs, Social Security has never been strongly progressive. In fact, as originally conceived by Franklin Roosevelt's Committee on Economic Security, high earners would have been exempt from the program, meaning there would have been no redistribution from these individuals to lower earners. Social Security currently has a modest tilt toward low earners, but not enough to impose a stigma on the poor or a work disincentive on the affluent. Many believe the system's relatively low progressivity has helped retain the program's political support over time. In the aphorism of Social Security's founders, "a program for the poor is a poor program."

    While Social Security benefits are progressive up to the wage ceiling, the cap prevents Social Security from imposing a confiscatory burden on high earners. As of 2005, roughly 84 percent of total wages are subject to Social Security taxes. While down from around 90 percent in the early 1980s, this level is slightly above the program's historical average of 83.3 percent.[7]

    President Clinton considered lifting the wage ceiling modestly but was skeptical of plans that would, in his terms, "soak" high earners with taxes many times what they could expect to receive in benefits. Eliminating the wage cap outright, Clinton said in 1998 at an event promoting Social Security reform, would "tremendously change the whole Social Security system. . . . We should be very careful before we get out of the idea that this is something that we do together as a nation, and there is at least some correlation between what we put in and what we get out," Clinton said. "You can say, 'well, they owe it to society.' But these people also pay higher income taxes, and the rates are still pretty progressive for people in very high rates."[8]
     
  2. jreeves
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    jreeves Senior Member

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    Yet another example of Obama taxing the middle class. He would eliminate the Social Security tax cap, forcing the middle class and rich to be burdened with prolonging the inevitable failure of Social Security.:rolleyes:
     
  3. jreeves
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    jreeves Senior Member

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    Here's the link....
    http://www.aei.org/publications/pubID.27704/pub_detail.asp
     
  4. ReillyT
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    ReillyT Senior Member

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    He hasn't proposed eliminating the cap altogether.

    I don't think he has indicated exactly how he would alter the cap, but has given a couple of suggestions. One would be raising it (but not eliminating it), and the other would be creating a doughnut hole, which would eliminate the cap at higher levels of income (around $250k), but maintain the cap at for amounts earned between the current cap and the elimination threshold.
     
  5. AllieBaba
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    AllieBaba BANNED

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    Thanks goodness he won't be our next prez. He'd bankrupt us and trainwreck the economy.
     
  6. rayboyusmc
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    rayboyusmc Senior Member

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  7. jillian
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    jillian Princess Supporting Member

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    unlike the imbecile in the white house now, right?

    do you read current events at all??
     
  8. AllieBaba
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    AllieBaba BANNED

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    Yes, I do. Which is why I know our president isn't responsible for the economy taking a nose dive.

    You think this is bad, you're in for a nasty, nasty shock if a dem gets in the white house and starts setting up huge, cumbersome programs that will leach the life out of the middle class.
     
  9. rayboyusmc
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    rayboyusmc Senior Member

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    :redface:

    I see, Bush is the president and is not responsible for the mess were in, but if a Democrat gets in he/she will be responsible if it gets worse?

    I have some really good beach property here in Florida to sell you Ali.:rofl: :rofl:
     
  10. AllieBaba
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    AllieBaba BANNED

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    If Bush had enacted policies which raped our taxpayers and built up huge programs, then I'd say he was responsible. But I haven't seen that.

    I guarantee if a president pushes for big government spending on new programs, that president is the one who will be held accountable when we crash and burn.
     

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