To the editor:
In regard to the ongoing debate about the earnings cap on Social Security payments, let’s give a couple of examples:
– John Q. earns $110,000 per year all his working life.
— John W. earns $2 million per year all his working life.
Each pays the maximum Social Security withholding, or $4,485.60 per year, based on the 2011 rate, which was lowered temporarily in order to stimulate the economy. John Q. pays 4.08 percent of his earnings toward Social Security and John W. pays .02 percent of his earnings.
At age 66, as of 2011, each gets the maximum benefit of $2,366 (www.socialsecurity .gov) per month, regardless of his then-current income. Assuming each starts working for their respective salaries at age 21, each has paid into Social Security $201,852 (again, assuming the 2011 rate). Yet, John W. has maintained $89,798,148 of his earnings while John Q. has maintained only $4,748,148 of his earnings (before taxes, assuming you pay any).
Please explain to me how this does not “create a privileged rich class.”
Of course, the examples above do not apply to everyone, but given the salaries of professional athletes and Wall Street executives, it is not that far-fetched. You can label me a socialist, communist, Marxist or just a struggling retiree, whatever. It just seems to me that if you live in a country where you have the freedom to accumulate that type of income and wealth, you should be willing to contribute to the whole.
Just my opinion.
Michael R. Stilley
Get the rich?
To the editor:
Some Review-Journal readers have suggested that the way to fix Social Security is to increase the tax on a millionaire’s income based on a belief that the millionaires made their money on the “backs of the middle class,” as one put it. Let’s take the two richest men in the United States, Warren Buffett and Bill Gates.
Mr. Gates, who dropped out of college, with a couple of his buddies started up a company called Microsoft. In the process of building his company, he became the richest man in this country. Many of the people he employed also became millionaires, and thousands more earned above-level income.
Mr. Buffett became a billionaire from a humble beginning. In his teenage years he began trading stocks. As a teenager, one of the stocks he bought was from a company called Geico. Years later, he purchased the company. He bought more stocks and companies throughout his lifetime using his money. Many people who invested with him over the past 30 to 40 years have also become millionaires.
These are two examples of billionaires who did not become rich on the backs of others, as many would like us to believe. They became rich by being capitalists.
Some of these readers also suggest raising the earnings cap and taxing citizens on the full amount of their income to fix the Social Security problem. They say that the top 5 percent of income earners would have to pay more, and that would benefit the other 95 percent.
Well, taking more money from people who earn over the current Social Security tax limit amount (a little over $100,000) will not solve the problem, and is not the answer, but only theft of another person’s income.
Michael O. Kreps