Ask Terry Questions why not tax all wages for social security

why not tax all wages for social security

By Terry Savage on June 10, 2015 | Taxes & Economy

My wife and I are both currently on social security and will not be probably affected by changes in SS law. I have never understood why all W2 income is not taxed by SS. The current limit probably does not affect most wage earners. The high income people who are better able to prepare for retirement are taxed at much lower (based on their income) rate than low income people. If we raised the wage limit, it should bring more money into the system and maybe eliminate raising the age for retirement and make it more viable for a longer time. Of course, we would have to stop Congress from using it as a personal loan that does not have to be paid back.

Terry Says:  You make a good point, and likely this will be part of the “cure” for Social Security’s actuarial imbalances when the Congress finally gets around to thinking about this issue!  They are already taxing the benefits –and that was never part of the original promise.  And your last sentence makes me smile.  You know, of course, that there is no longer a “shoebox” full of money waiting for your to tap your account. That shoebox is already filled with U.S. government IOUS — “special purpose” notes, promises to “print” enough money to pay them back so recipients can get their checks!  What will those be worth when it comes time to print?!!



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