Lift the Income Cap

The Register Guard (Eugene, OR), September 18, 2010 | Go to article overview

Lift the Income Cap


Byline: The Register-Guard

There is a federal tax problem bigger than the Bush tax cuts over which Congress is in a dither today.

The Bush cuts of a decade ago reduced rates for the personal income tax that is the chief source of revenue for general government purposes. The current battle concerns whether the lowered rates should be extended or allowed to expire at the end of this year, as mandated under current law.

But the biggest tax paid by many Americans is not the personal income tax. It is the payroll tax that supports Social Security. All workers pay 6.2 percent of the first $106,800 of earnings. They pay no tax on earnings above that cutoff.

So far, each year's collections from this tax cover what is owed to retirees and other beneficiaries. But with baby boomers now entering retirement age, the latest estimate is that revenues will begin to fall below the annual requirement by 2037.

That shouldn't happen, because on paper Social Security built up a large trust fund in years when its income far exceeded outgo. But that money has disappeared. It has been borrowed by Congress to pay for non-Social Security needs.

Congress leaves little IOUs in the trust fund piggy bank, but everyone knows they are worthless. Paying back what is owed would take a huge tax increase that would stand no chance of congressional approval or voter support.

But there is another alternative. The amount collected every year could be increased significantly by removing the cap on income to which the payroll tax applies.

Thus, all workers would be taxed on all of what they receive, not just the first $106,800, which itself has been increased periodically.

According to Philadelphia-based columnist Dave Lindorff, a recent study by the Congressional Budget Office showed that if this change were made, "The dreaded wall when current workers' tax payments cease to be enough to pay for current retiree benefits, instead of arriving in 2037, would be pushed back to at least 2075 - a date almost as distant in the future as today is from the founding of the Social Security program. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Lift the Income Cap
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.