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View Full Version : John Kerry to CUT Social Security Benefits......



Section126
08-17-2004, 08:26 AM
In a speech in Ohio and on the Kerry-Edwards Web site, Mr. Kerry has said that he would consider "making sure that high-income beneficiaries don't get more out than they pay in" as taxes during their working years. In practice, the Kerry plan would mean cutting Social Security benefits by about 80% for those whose benefits are reduced.

Here's why: The Social Security payroll tax is paid on income up to a limit -- currently $87,900 -- that rises annually with overall wage growth. Individuals and employers now each pay a 5.3% tax for Social Security retirement benefits, with a maximum individual tax payment in 2004 of $4,659. Additional payroll taxes are paid for Medicare and disability insurance.

Anyone who turns 65 this year and who has always paid the maximum Social Security tax would have paid total taxes from age 21 to 65 of $82,066. Such a new retiree would now be entitled to annual benefits of about $22,000, an amount that would rise with the price level. With an expected remaining life of 17 years and a 2% inflation rate, this retiree would receive $440,000 by age 82. To limit the expected benefit to the $82,066 paid in lifetime taxes, the Kerry plan would require cutting the benefit by 80%. The annual benefit would fall from $22,000 to only $4,100.


Here is the link to the article:

WSJ (http://users2.wsj.com/lmda/do/checkLogin?a=t&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2F0%2C%2CSB109269810281593014%2C00.html%3Fmod%3Dopinion%255Fmain%255Fcommentaries)