A plan for fixing Social Security for decades
The issue is detailed and discussed more and more in newspapers and on websites Denver residents read. The issue is the looming budget shortfall for the Social Security Disability trust fund. As we have noted in this space before, if no funding fix is implemented, the trust will be able to pay SSDI/SSD beneficiaries only about 80 percent of their benefits.
However, Sen. Bernie Sanders has come up with a solution detailed in a 12-page report. The solution is straightforward: eliminate the cap on payroll deductions. That simple step would mean that middle-class taxpayers and millionaires would contribute the same percentage of their pay to Social Security. Sanders says it would make Social Security solvent past 2060.
Right now, a middle-class worker contributes 6.2 percent of his or her salary to Social Security, which then puts some of that into its retirement trust fund and some into its trust fund for disabled workers. But here’s the catch that benefits folks with higher incomes: the Social Security payroll tax is capped at $118,500.
Payroll income above that amount is not taxed for Social Security.
So the maximum someone can pay in this year is $7,347. That is what would be deducted from their income of $118,500. That means if a person makes $1 million this year, the maximum they would pay to Social Security is still $7,347. If a baseball or football player makes $20 million this year, he will still pay only $7,347 to Social Security. If a baseball or football team owner makes $200 million, he or she will still pay only $7,347.
Under Sanders’ plan, all of those people would pay the same percentage of their income into the retirement and disability funds. It wouldn’t matter if you made $118,500 or $118,500,000. You would still contribute 6.2 percent of your income to the funds for retired folks and disabled workers.
It might be a plan for Congress to consider as it mulls its options for fixing SSDI.
Finally, please remember that a Denver attorney experienced in SSDI appeals can help you collect vital paperwork and meet deadlines, and most important, the attorney can represent you in your appeal hearing before an administrative law judge.