Letters: Many fixes for Social Security
SOCIAL SECURITY
OBAMA: Has not proposed a comprehensive plan to address Social Security's long-term financial problems. During budget negotiations in 2011, proposed adopting a new measurement of inflation that would reduce annual increases in Social Security benefits. The proposal would reduce the long-term financing shortfall by about 25 percent, according to the Social Security actuaries.
ROMNEY: Protect the status quo for people 55 and over but, for the next generations of retirees, raise the retirement age for full benefits by one or two years and reduce inflation increases in benefits for wealthier recipients.
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Newsday's editorial inexplicably ignored recent reductions in payroll taxes ["Fix Social Security -- again," April 29]. These levies are designed to fund the program. While you recommended raising the FICA withholding tax from 6.2 percent to 7 percent as part of the solution to the problem, you failed to report employees have been paying an effective rate of only 4.2 percent for the last two years.
Based on President Barack Obama's own numbers, this tax holiday has allowed 160 million Americans to pocket $1,000 yearly. Over 24 months, that amounts to roughly $320 billion kept from a mandated insurance program that is bleeding red ink. For the roughly 60 million people on Social Security, this computes to an average $5,300 each being drawn away from their mythical "trust fund" accounts.
Why discuss raising the income cap, or improbable bipartisan agreements, when you ignore the fact that, right now, cash promised to millions of seniors is being deliberately redistributed to another, larger segment of the population? Given Newsday's own well-founded pessimism regarding the likelihood of any Social Security fix, you could at least provide golden agers with the kind of under-reported information they might find helpful before casting their vote this November.
Jim Soviero, East Setauket
I agree with Newsday that it's time to fix Social Security, but not by raising the rates to 7 percent from 6.2 percent for working-class Americans. Instead, we should be closing the tax loophole for high-earners, so that everyone pays their fair share.
Since the early 1980s, the share of annual income going to the top 1 percent of earners has risen from 9 percent to 24 percent. Those with incomes in the top 1 percent are paid well above the existing payroll tax cap of $110,100. In many cases, they pay significantly less than 1 percent of their income in payroll taxes, or FICA. As a result of this income shift, the entitlement shortfall has grown by almost $150 million per year.
We could lower the overall FICA rates if all income were subject to the tax -- including the "carried interest" income of private equity managers -- and still eliminate the projected shortfall.
Phil Heckler, Hicksville
