Time to remove the cap on earnings and replace it with a floor. No FICA taxes on first $X amount of earnings, then FICA on all the rest.
Congratulations are in order.
You have successfully destroyed Social Security.
At the risk of talking over your head -- and your 4th Grade Math teacher can back me up on this....go find them on FacePuke -- the funding formula for Social Security is very simple:
FICA Revenues = # of Workers * Wages * FICA Tax Rate
We know from our 4th Grade Math that if we alter any of the factors, we increase/decrease the product.
You are 13 Million workers short on top of the 6.3 Million that are currently unemployed, or in simple terms, you are 19 Million workers short.
Might I suggest you send your Army and Marines to foreign countries, kidnap 13 Million workers and their families, and bring them back to the US, and create 19 Million jobs
overnight for them and the 6 Million currently unemployed.
If you did that, and if you had exactly 0.0% unemployment for the next 500 years, Social Security would be solvent.
Somehow, I don't think that's gonna happen.
So.....can you increase wages?
No, because benefits are tied to wages and increasing wages is a zero sum game that changes nothing. Social Security is insolvent and will always remain so.
Can you increase the FICA Tax?
Yes, and the good news is you only have to increase it once to 8.0% to 8.4% each for employer and employee and Social Security will be solvent for the next 500 years with no additional tax increases needed.
Why? I just told you why. Look at the funding formula again and have your 4th Grade Math teacher explain it to you.
The FICA Tax of 1% for employer and employee was never enough and everyone knew that. The goal was to get the Social Security Act of 1935 passed and then fix the funding problem later.
In 1940, you had 159 workers for every beneficiary.
By 1945 that had dropped to 42 workers for every beneficiary.
The ratio of workers to beneficiaries continued to decline.....
1950 it was 16:1
1960 it was 5:1
1970 it was 4:1
1980 it was 3:1
At present, it is 2.8:1
By 2040 it will be 2.3:1
The good news is that from that point and for the next 500 years, it will always be 2.0:1 to 2.3:1.
Why? Because of your near ZERO birth-rate.
Removing the cap on Social Security will not save it and it will not fix it.
At most, it will generate enough to pay benefits for 1 month.
For the other 11 months, well, you'll have to cut benefits by 28%-35%.
Now, notice I never said do not remove the cap. I simply said removing the cap will neither fund nor fix Social Security.
If you keep the current cap, create a donut-hole and not tax the gap between the cap and a $400,000 base-point that is adjusted upward just like the cap is adjusted upward annually, then you only need to increase the FICA Tax Rate to 8.0% to 8.2% and that will be the last increase for the next 500 years.
Overall, it's a good program and one that is worthy of support by Conservatives (and Ultra-Conservatives like me) provided we stay with the original concept and logic behind the program.
That concept and logic is that Social Security was never intended to be someone's income.
Social Security is an insurance program. That is the "I" in OASI which is Old Age and Survivor's Insurance.
It is not an investment program in spite of what morons claim and so arguments about Return-on-Investment are moronic.
Do you get a high ROI on your auto insurance? No, you don't, so get over it already.
We are all responsible for getting a retirement program through are employer, and for saving and investing for our own retirement.
When we cannot get a retirement program through our employer, it is up to us to save/invest more of our own money.
Sadly, when we are born, are Crystal Balls never function properly, so we don't always see the curve-balls that Life throws at us.
I mean, if you knew in advance that 20 years down the road your spouse was gonna take the whole planet in your divorce and leave you with nothing but your bones, you probably wouldn't have gotten married right?
I wouldn't kick a person that someone else knocks down.
But for those whose, um, you know, "pain and suffering" is self-inflicted, well, sucks to be them.
So long as Social Security remains an income supplement and doesn't turn into an income substitute, I got no problem with it.
Additionally, time to place FICA taxes on those that derive their wealth from investments also.
General Welfare Clause or not, your Constitution doesn't provide for that.