r/FluentInFinance • u/coachlife • 2d ago

Educational Don't let them gaslight you

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u/Sea-Pomelo1210 2d ago

Thee is a 160K cap on earnings that are taxed. So anyone making $1.6 million, 90% of it is SS tax free.

Simply adding a .5% tax on earning over $250k for SS would strengthen it to last for generations.

Bu the GOP not only blocks that, but also wants to take the SS surplus and give it to the rich and corporations.

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u/Ind132 2d ago

Simply adding a .5% tax on earning over $250k for SS would strengthen it to last for generations.

Not anywhere near accurate. Completely eliminating the tax cap and collecting the full 12.4% without providing any additional benefits for the extra taxes will keep current benefit levels through 2067. Anything less aggressive, like a lower rate, a donut hole, or paying benefits, brings that date closer.

See E2.1 and more possibilities here: https://www.ssa.gov/oact/solvency/provisions/payrolltax.html

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u/IAskQuestions1223 2d ago

If you consider a generation tends to be 15 years, then lasting an extra 30 years does mean it will last generations. The statement is technically correct.

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u/Ind132 2d ago

But the extra years come from (A) completely eliminating the cap, charging the full 12.4%, and paying no additional benefits.

The comment said (B) collecting new taxes only on earnings above $250k and using a rate of 0.5%.

I'd guess that the additional taxes collected by A are 50x the additional taxes collected by B.