Americans overwhelmingly prefer raising payroll taxes & increasing Social Security benefits

This should come as no surprise, but the data is now in. While Our Betters have converged on the idea of lower taxes for themselves and benefit cuts for recipients of social insurance programs — Social Security, Medicare, Medicaid — the people they govern have converged on just the opposite idea.

Americans overwhelmingly want to increase payroll taxes and sweeten the benefits paid out. Via NASI, the National Academy of Social Insurance (emphasis mine):

Americans support Social Security and are willing to pay more to preserve and even improve benefits, according to a new survey released today by the nonpartisan National Academy of Social Insurance (NASI).

The new study, Strengthening Social Security: What Do Americans Want? (pdf), finds a sharp contrast between what Americans say they want and changes being discussed in Washington, such as cutting benefits by using a “chained” Consumer Price Index to determine Social Security’s cost-of-living adjustment (COLA).

Large majorities of Americans, both Republicans and Democrats, agree on ways to strengthen Social Security — without cutting benefits. Fully 74% of Republicans and 88% of Democrats agree that “it is critical to preserve Social Security even if it means increasing Social Security taxes paid by working Americans.”

When asked the same question about increasing Social Security taxes for better-off Americans, 71% of Republicans and 97% of Democrats agree. Social Security taxes are paid by workers and their employers on earnings up to a cap ($113,700 in 2013). About 5% of workers earn more than the cap.

That “5% of workers” who earn more than the salary cap are, of course, our wealthiest workers — and also the beneficiaries of the post-Reagan economic policies detailed here (be sure to check out the graph).

From the report itself (page 1), we find:

■ Americans don’t mind paying for Social Security because they value it for themselves (80%), for their families (78%), and for the security and stability it provides to millions of retired Americans, disabled individuals, and children and widowed spouses of deceased workers (84%).

84% believe current Social Security benefits do not provide enough income for retirees, and 75% believe we should consider raising future Social Security benefits in order to provide a more secure retirement for working Americans.

■ 82% agree it is critical to preserve Social Security for future generations even if it means increasing Social Security taxes paid by working Americans, and 87% want to preserve Social Security for future generations even if it means increasing taxes paid by wealthier Americans.

The consensus is stunning. For the following “package of changes” …

Gradually, over 10 years, eliminate the cap on earnings that are taxed for Social Security. This would mean that the 5% of workers who earn more than the cap ($110,100 in 2012; $113,700 in 2013) would pay into Social Security throughout the year, as other workers do.

Gradually, over 20 years, raise the Social Security tax rate that workers and employers each pay from 6.2% of earnings to 7.2%. A worker earning $50,000 a year would pay about 50 cents a week more each year.

Raise Social Security’s basic minimum benefit so that someone who paid into Social Security for 30 years can retire at 62 or later and not be poor.

Increase Social Security’s cost-of-living adjustment (COLA) to more accurately reflect the level of inflation experienced by seniors.

… this is the consensus that prefers it (Figure 1, page 2):

Support for SS Perferred Package (NASI report, fig 1)

The bipartisan desire to sustain and grow this program is real, and Mr. Obama and other Democratic “entitlement” fetishists better understand that. This is still the third rail of American politics.

Centrism 101 — There are two “centrist” positions, not just one

I’ll keep this short, since it should be obvious. Let’s call it Centrism 101. People who perform on TV are fond of talking about the “centrist” position, or the “bipartisan consensus” on various economic matters. This presumes a vertical left-right divide with some kind of center between them.

The real divide in this country is not Left versus Right — it’s the Rich versus the Rest. It’s the horizontal division between the people taking all the money they can, and those they’re taking it from.

Among the rich, there’s a widely-agreed center position — more for us, less for everyone else on the planet.

As the poll above makes very clear, there’s also a widely-agreed center position among the rest of us — keep your stinking hands off of our last protection against poverty.

Oddly, those positions seem to be in conflict, but they are still both “centrist” positions. You just have to ask “the center of what?” The rich agree with each other on money matters; they just don’t agree with us.


To follow or send links: @Gaius_Publius

Gaius Publius is a professional writer living on the West Coast of the United States.

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51 Responses to “Americans overwhelmingly prefer raising payroll taxes & increasing Social Security benefits”

  1. I wonder how many of the 18% of of those who do not agree are eligible for S/S. Many may be those who are not eligible as they have never worked or have worked and been mostly paid under the table and would not receive S/S/.

  2. htfd says:

    I always thought you could. I stand corrected, Thank you.

  3. htfd says:

    Yes, in very loud voices.

  4. John Gavel says:

    If you are treating the stock market as income- and day trading, you are getting taxed as income- bc its short term gains. However for long term investors there is an incentive to keeping your money with a company for an extended period of time- that is a flat tax rate of 20% (was 15% in 2012 which was nice).

  5. John Gavel says:

    Capital gains held under a year are taxed as income. Anything held over a year is considered long term capital gains and is subject to a flat tax of 20%. Take me for example- my investment income comes from my paycheck (which is taxed as income.) So I do my research, find some companies which I feel is worth my investment and I place some of my money in that particular company (i could totally lose all my investment- nothing is guaranteed). Nothing happens for 10 years and finally the company sees a share increase- lets say 50%. So I turned 500 dollars profit on my original $1000 investment (it took ten years and this is all a gamble- i could lose my money). Why should this be taxed as income again? Why should my $1000 which has already been taxed once as income be subject to the same tax once a gain? Its doesnt fit the definition of income- it took me ten years to get a 50% return? Is your retirement investments subject to an income tax? Everyone hated on Mitt Romney bc he took money which he worked for and smartly invested it- they all want him to pay an income tax on it but if he lost all his money- everyone would say tough luck, should of been smarter with your money

  6. GaiusPublius says:

    Yep. See next post of mine. Thanks, Nico.


  7. lynchie says:

    I am not an Obama fan but to be fair he inherited a pile of shit. He did expand the war in Afghanistan and failed on a number of promises but American industry is choking on the cash it has in the bank. Stock market at record highs. Jobs still flowing like a river overseas and our Congress is worried about Bengazi. How about rewarding companies who create jobs here in America and penalizing companies for closing plants and moving out. Part of the problem is Congress is owned by corporations and what they want they get. Stop welfare for corporations. No rebate for corn, oil etc. Make all corporations pay taxes on everything they earn, if not move out but they don’t get to ship their products into the U.S. Waste is a drop in the bucket when you look at giveaways to corporations and the 1%. Why do you pay less tax on capital gains than salary. It is still income no matter how you earn it.

  8. John Gavel says:

    War on weed too- thats something like 42 billion a year- trillions over the life of the failed operation

  9. John Gavel says:

    And medicare is self funded- not largely funded by a 2.9% payroll tax? In addition to other taxes?

  10. John Gavel says:

    Id look at grants that have been issued- whether it be 25 million for moroccan pottery classes or 300k for robo-squirrel research. Id look at what the government is spending on TSA workers- thirty something standing around metal detectors seems like a pretty big waste.

    I know this is in the past but I think alot has been learned from the federal bail out of the auto industry- Our government should evaluate its involvement in bailing out public companies- that yes, like hostess- could of gone thru public bankruptcy- dodge is failing and chevy is losing thousands of its revolutionary volt.
    Also the stimilus package- it seems projects such as cell phones for the poor and providing towns with funds for shovel ready projects didnt create the revenue that the govt thought it would. We should evaluate those as well.

    Looking at our involvement in the green energy sector shows a huge amount of waste. Companies such as the infamous Solyndra (who received 500 million in funding in 2010 even tho the company never turned a profit since its creation in 2005),Evergreen (25 mill), Fisker Automotive (500 million), First Solar (1 billion)- It seems the government has wasted over 90 billion in flawed projects.

    Im not sure the government owning a large percentage of the mortgage market is a very good idea either- but well I guess its our tax dollars. Running a 1 trillion dollar deficit for 5 years straight when Obama said he would eliminate it along with our forever increasing 17 trillion dollar debt is never a good look. Printing money at record rates, low interest rates and an inflate bond market is setting up for an interesting 2013- recession is not out of the picture. If I was Obama and I made all these promises- id forget about immigration for a second and start worrying about the economy which has shrunk for the first time since 2009 (recession yr).

  11. lynchie says:

    You still didn’t tell me what you want to cut. Medicare and SS are self funded with contributions by the employee and employer. Successive Congresses have stolen from the fund and never paid it back. Give me specific cuts not anecdotal incidents. Sure there is waste but what and how will you cut.

  12. John Gavel says:

    Who said anything about military cuts?
    My friend works for a company that is under contract from the govt- they work on intersections- making them safer and such. The govt gave them the intersections in the cities that they wanted corrected, signed the contract and my friend was on his way. They completed the work rather efficiently but are still under govt contract- so they are now just “messing around” (as he says) with intersections that are fine just because “they have nothing else to do.” Living in Washington DC I come across this all the time. The government has expanded so much that there is inefficiency all around and its to big to keep up with. Medicare and Medicaid has been a broken system for years- instead of fixing the issues it has been expanded. Look at social security- same thing. Everyone wants bigger government, more programs and are willing to pay but until it is efficient, streamlined, and effective- whats the point. You have the Department of Interior spending hundreds of thousands on bathrooms- ridiculous. Look at what politicians retire with- look at their packages. They are set for life because they chose to serve us? While we all live and scrape they get full retirements with full benefits? People need to wake up and realize you start to make cuts where it hurts them- then things will change. Sandy victims are still waiting for aid

  13. perljammer says:

    I don’t believe there is any mechanism allowing an individual to make voluntary FICA payments. At least, an extensive search for such a mechanism came up empty. If you can cite a source to back up your assertion, that would be very helpful.

    Something that did turn up in my search, from the IRS web site:

    “In general, U.S. social security and Medicare taxes apply to payments of
    wages for services performed as an employee in the United States,
    regardless of the citizenship or residence of either the employee or the
    employer. In limited situations, these taxes apply to wages for
    services performed outside the United States. Your employer should be
    able to tell you if social security and Medicare taxes apply to your
    wages. You cannot make voluntary social security payments if no taxes
    are due.”—Medicare-Tax-and-Self-Employment

  14. lynchie says:

    It only works if they replace someone else younger in your job.

  15. Lawyers would love that scenario. Age discrimination lawsuits!

  16. You missed my point that there just won’t be enough entering the workforce to replace retiring workers. In both my jobs,there are workers in their 70’s. The federal goernment is going to face the reality of revenue shortages indefinitely. Therefore, it will more vigorously enfoce the laws against age discrimination (more money from fines) and further encourage workers to retire later. Ironically, Reaganomics may ultimately enforce the concept of 70-year-olds still work, even as president.
    Technology has passed from physical to knowledge, so employers, if they are smart, will retain knowledge workers. It all depends upon the kind of work. Some jobs have severe shortages, which is why I’m looking at growing industries. My basic premise is that the 1930’s, when Social Security started, is quite irrelevant to the 2030’s.

  17. lynchie says:

    Besides the military give some examples of where you would cut spending.

  18. lynchie says:

    they don’t want to pay matching funds for payroll tax. They don’t care if we can retire or not.

  19. lynchie says:

    If you are 55 or older your employer is trying to find a way of moving you out. In Pa. you can be fired without cause, no severence, no health care and in this job market not a real chance to get a job other than a greater at Walmart.

  20. lynchie says:

    Because they have the money for health care. the rest of us play roulette. Many have to decide whether to buy food, pay rent or pay health care.

  21. John Gavel says:

    I remember the days when people hated taxes, miss those days

  22. John Gavel says:

    or you could keep more instead of getting taxed more and save for your own retirement- wowww what a concept, actually doing something for yourself

  23. John Gavel says:

    wait- why should I pay even more taxes on my capital gains? Bc I have done research, bet my hard earned money that I worked for on a company that I found? My investments are my retirement. hopefully, so why should I be taxed more to pay for others retirements? Im not the 1%. Obama has eliminated the 10% capital gains tax bracket and combined it with the 15%- 1% can absorb a hit like that- that increase is only taking away from my future. People need to realize that increasing taxes is not the answer to everything. The govt wastes so much money, if they streamlined their processes and cut out the ridiculousness this wouldnt even be an issue

  24. condew says:

    Like oil companies, the most profitable business the world has ever seen. Why are they entitled to so many subsidies and tax benefits? Isn’t that the “entitlement” we should be talking about?

  25. htfd says:

    Gaius Publis thank you for keeping the Social Security, Medicare and Medicaid issues in the picture. With the Republicans and especially the Democrats all to willing to have shove the “entitlements” into a dark corner where they can chew on it till they come up with a horrid bi-partisan solution to cram down the throats of the populous while flapping their gums in the MSM spotlight on a gun control bill that will come out looking all too much like the filibuster rule correction. It is important to keep eyes on this matter. Since the people ‘we’ the voter (not all of us, some have brains) put in charge of the matter seem to like calling it ‘entitlements’ we should call it social entitlements to differentiate from the ‘financial and business entitlement’ -substitutes- that add big time to the deficit. Sometime just a play on words cause favorable shifts in public onions.

  26. condew says:

    This article neatly explains why no committee on the future of Social Security will ever be created where multimillionaires are not the vast majority, even when such a committee is appointed by a Democratic President like Obama. Only a committee of very rich men will come to the conclusions that very rich men want.

  27. condew says:

    An who the hell do you thing is going to employ all those 65-70-year-olds? If you’re in the high side of 55 now, a good job is almost impossible to get. Besides, Social Security was adjusted for the demographics in the 80s, under Regan.

  28. condew says:

    Yes, I’ve been saying for years, take the taxes from me while I am still earning, not when I’m old and probably living on a lot less, and have no options to make more. If I’m getting $20K from Social Security and some austerity nitwit cuts that to $12K, it will be the biggest and most painful tax increase in my life.

  29. htfd says:

    Definitely time to revise the tax codes and add a ‘robinhood tax at the same time.

  30. htfd says:

    Well if people didn’t keep voting for them they wouldn’t be clowns in office in Washington. Just because it’s “seen on TV” doesn’t mean you have to go out and buy it. Same goes for all those political ads…don’t buy the politician, try third party candidates.

  31. htfd says:

    Unless they make voluntary payments, which they can do.

  32. Makes sense–’cause you barely feel a slight increase of taxes taken from your paycheck, but you will, SURELY, feel it when you are elderly, without enough resources.

  33. pappyvet says:

    For me,the reason is simple, it shows a people who despite the best efforts of the selfish,the hate mongers,and the far right propaganda machine , are a courageous and generous people .

    However, in our government its not just the rightwing,they are just the more obvious . Our government would seem to be now a bought and paid for instrument either wholly owned or blackmailed with the threat of lay offs,and job loss if they act forcefully with any regard towards fair play and decency.

    What we seem to have is not unlike two sports teams who claim advantage when the cameras are rolling but in the backrooms where the money is discussed are more like blood brothers. We are quickly becoming a banana republic and it took a lot of work and a lot of silence to get us here.

  34. I agree that life expectancy has remained stagnant along with income for the nonrich since the god became king in 1980. However, it’s in the seventies, not 59 when retirement age became 65. Furthermore, we baby boomers will leave the workforce in larger numbers than the entering workers, and we face larger possibilities that we will outlive our money. It’s a demographic shift similar to when retirement age dropped to 62 some fifty years ago because of the huge number of boomers who were coming into the workforce.

  35. perljammer says:

    A Red Herring is a fallacy in which an irrelevant topic is presented
    in order to divert attention from the original issue. So no, my comment was not a red herring. The original question was whether people whose income is non-wage income, pay into the system, and that is what I responded to.

  36. perljammer says:

    I haven’t been able to find any information that would back up your contention that the payroll tax was intended to cover 90% of the wages. If you can cite a source, that would be great.

    The original plan drafted by President Roosevelt’s Committee on Economic Security focused on poverty alleviation and would have exempted from the program nonmanual workers with monthly earnings of $250 or more. Get that? Only manual workers earning less than $250/month would contribute or get benefits. That would have been a far, far cry from the 90% figure you mentioned.

    The House Ways and Means committee instead instituted the “tax max” concept, with an initial limit of $3,000. This meant that the first $3000 in wages for ALL WORKERS would be subject to the payroll tax, and that ALL WORKERS would be eligible for benefits, in proportion to their contributions.

    For the first couple of years, less than 5% of covered workers, earned more in wages than the tax max. That number passed 10% in 1939, and didn’t get back down to 10% for 40 years — in 1965, 36% of workers earned more than the max. The number has been hovering around 6% since 1983, which appears to contradict your statement about covering “less than 80% of the wages…” Again, I would be interested in any authoritative source for that.

    All of the increases to the maximum amount subject to the payroll tax have ostensibly been for the purpose of maintaining revenue at a level that would allow benefits to increase appropriately for Social Security benefits to serve as “income replacement” for retired workers. Under Nixon in 1968 and Carter in 1977, measures were instituted to index the max to changes in the national average wage index, rather than relying on Congress to periodically raise the limit.

  37. BeccaM says:

    Life expectancy for those in the lower 80% of wealth has remained stagnant for decades now.

    It’s only gone up significantly for the rich.

  38. The difference here is that Social Security taxes earned income. Unearned income, like capital gains and rental income, do not fall under Social Security. The thought is that those receiving unearned income do not work for it, so they don’t need Social Security on that income. I myself am looking into generating unearned income, for we ultimately need unearned income for retirement!.

  39. You don’t want to see this, but I think the retirement age is going up, perhaps past seventy. Otherwise, I agreed with all the other options: the end of the cap like Medicaid, etc. When Social Security began, life expectancy had just climbed to 59! Ironically, neither FDR nor LBJ lived to 65 to benefit from their programs. Ronald Reagan, on the other hand, feasted on many sources of income from the federal and state governments, Reaganomics has moved us from one trillion to twelve trillion in debt, plus Schrubs’s silly wars.

  40. monopole says:

    Two forms of centrism Mean vs Median. And with the income distribution the way it is the mean skews very much towards the rich. :)

  41. Guest says:

    That’s only true if they don’t have any wage or salary income. I’d venture to guess that most people in this country who now obtain all of their income from capital gains or other non-wage income have at some time in their lives been salary or wage earners, and most of them have probably accrued enough quarters to be entitled to benefits — often at the highest payout level. Your point is a red-herring. And I’ll bet you very few of them are going to pass up the opportunity to enroll in Medicare.

  42. BeccaM says:

    Our Plutocratic Bastard Oligarch Overlords overwhelmingly prefer otherwise.

    Guess who controls our government at this point?

  43. perljammer says:

    No, they don’t. And they don’t accrue any benefits, either.

  44. nicho says:

    Nice try. The problem is that the payroll tax — and its adjustment schedule — was meant to cover 90 percent of the wages paid in the country. What the actuaries who set it up didn’t account for was the growing inequality of income. The payroll tax now covers less than 80 percent of the wages paid in the country — and it’s even lower when you consider that the one percenters have found ways to turn their salaries into things that aren’t taxed.

    Case in point: Meg Whitman took over HP and a big deal was made that she would get only $1 a year in salary. That’s what she will be taxes on. However, she received tens of millions of dollars in stock options that come due in 2014. In 2014, she will lay off tens of thousands of HP employees, the stock price will shoot up, she will collect on her windfall from the “success” of the company — and she will not pay payroll taxes on it. In fact, it will be taxed as capital gains — at 15 percent.

  45. Guest says:

    No. And that’s a very big problem.

  46. Guest says:

    It’s not just the rich versus the rest. It’s that a lot of the rest allow themselves to be duped. The fact is that, leaving the payroll tax rate where it is would have absolutely no impact — let alone an adverse one — on the overwhelming majority of the American people. How many people in this country earn more than 113,000 a year in wage and salary income? And for those who do, what’s the big deal? Actually, the problem with the payroll tax is that it’s regressive, and it should be graduated. The bigger problem is that our tax system is rigged to tax work instead of wealth. Three or four hundred thousand dollars a year in wage or salary income may sound like a lot in much of the country. In a place like New York City, it’s not. But that salary-earner is paying at a rate three times the rate that Romney or the Koch brothers get off with. Where’s the justice in that? But it’s the very people who are getting hosed that are keeping these consensus clowns in office in Washington.

  47. Dave of the Jungle says:

    It’s the Republican Party’s job to tell us what we want. That way, we know. See?

  48. nicho says:

    But what does the one percent want? That’s all that really matters.

  49. NCMan says:

    No, they don’t. That’s another change that should be made.

  50. jomicur says:

    This would only matter if we had any reason, any reason at all, to think congress and the White House give a damn what the American people want. (And I say that as a disabled American living on Social Security Disability.) Our politicians, even the ones who promise hope and change, know which side of their bread the butter’s on–and it isn’t the people’s side.

  51. therling says:

    Do people whose income is from capital gains and other non-wage income even pay into the Social Security and Medicare systems?

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