Total taxable income currently is around 7 trillion dollars per year. A 2% increase in ss and medicare would decrease the annual deficit by at least 140 billion dollars a year. This little increase provides a potential breakeven since total taxable income will increase each year, along with the population. From one perspective, its easy to say that the payroll tax rates were never properly set, if it has run away from us, but the increased rate of inflation in the medical field likely accounts for most of the runaway effect. Medicare tax rates (and ss, to a small degree) have just never been adjusted accordingly. Waiting till people are in retirement to admit that a mistake was made seems pretty irresponsible, considering that budgets are already pretty tight in most every direction. This new system we seem to be borrowing for ahead of time. Not really sure yet why it's costing so much.

Well, it looks like there was a lot of wrangling about the initial cost, starting from 634 billion ranging up to 1.5 trillion. A substantial amount was estimated or allocated for a reserve fund to cover unforeseen circumstances, IIRC. With all of this new debt on the books, I can see why there is a lot of resistance to raising any taxes, but it's just a matter of time. I think most people wouldn't have cared about a measly one or two percent while they were still working to adjust for inflation properly rather than wait till it got out of hand. Tax rates are pretty low right now.

Reality; Look at it from an employers viewpoint...If you raise the cost to employ one person by 2%, say for SS, the employer would also need to add 2%. Regardless the amount, if you have 100, a 1000 or more, that end raised cost without question, will cost even more jobs.

 

Taxes on everybody, in some manner will happen, out of necessity to meet future obligations, but this is simply not the right time, noting other programs that will cost much more...

I agree that now isn't exactly a good time, since we put so much debt into it. Was it this argument that initially caused it to be paid for with debt, I wonder. I've seen lots of posts and articles lately deemphasizing the relationship between tax increases and spending habits, after all its only 2% of payroll (5-10%).

 

Excuse me, regarding the cost, I was forgetting some of the costs of the overhaul and its all-encompassing nature.

Edited August 26, 201114 yr by Realitycheck