900 Wealthy Americans Are Exempt From Paying Social Security Taxes For The Rest of 2014
There’s two things, they often say, you can never avoid in life: death and taxes. While the wealthiest Americans certainly can’t escape the latter, 900 rich people are exempt from paying Social Security taxes for the remainder of 2014. It was all already paid by Jan. 2, ThinkProgress reports.
Exactly 894 individuals — the wealthiest 0.0001 percent of the country — paid their dues on just day two of the New Year. The maximum amount of income subject to social security tax is $117,000 a year. Nearly 900 Americans made that much in just two days. To do this, “one’s annual income has to exceed about $21.3 million,” LA Times said about the elite group.
According to data from 2012, analyzed by economist Teresa Ghilarducci, about 70 corporate CEOs are enjoying a year virtually free of Social Security taxes, including chief executive officers from CBS, Yahoo, Coca-Cola, and Disney.
Ghilarducci believes that the retirement program would be more financially sound if this $117,000-per-year wage cap was lifted. “What would happen if everyone eligible paid everything all year long?” Ghilarducci asked rhetorically. “The Social Security system would be solvent indefinitely and they still would be the richest and prettiest in all the land.”
On the same page, Democrats have been pushing to lift the cap and successfully raised it from $106,800 in 2009 to its current amount. “Eliminating the cap entirely,” ThinkProgress notes, “could make the program solvent for the next 75 years without cutting a dime from anyone’s benefits.”
Conservatives, on the other hand, are more rigid about raising the taxable income limit. Instead, they have been lobbying to raise the retirement age or campaigning to privatize the program.
Let’s not forget that America’s wealthiest earners have seen a drastic increase in their salaries compared to the rest of the nation. Wages subject to Social Security tax have decreased from 90 percent to 83.6 percent between 1983 and 2006. Adding insult to injury, highest-earners are taxed at a smaller rate than the majority of American taxpayers:
“The discrepancy is stark,” said Ted Deutch, a Democrat representing Florida’s 19th district “A lawyer earning $400,000 pays a rate of 1.71 percent; a CEO earning $2 million pays just .003 percent.”
To improve Social Security’s health, Congress introduced a new measure called the Chained CPI — a proposal that would cut $230 billion in benefits over 10 years by “by gradually shaving dollars off a retiree’s income as they grow older,” RT reports.
Our lawmakers, it seems, are neglecting the issues of inequality in the retirement system and are further antagonizing the very group that are imperiled by Social Security’s failing health — middle-class and working-class retirees.