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Jkrou,

"Comment: the wage base is increased annually which makes sense as the inflation rate increases. doing away with a wage base does not make sense to me in that benefits have a maximum payout, so if the base were eliminated then the payout max would have to go with it. I do not think that the pool could handle the long term effect this would create."

There are two possible advantages to eliminating the wage base.

1. Putting aside the question as to whether or not there really will be coming shortfall in the reserves (the deficit), ending the wage base now boosts the amount currently invested and increases the reserves by the added interest (in theory, the reality is more complex). That adds a small but appreciable cushion to the total monies set aside. It wouldn't solve the problem, but it would give a little more leeway.

2. Perceived fairness is at the core of Social Security. Which is why it was intended as a universal system (although it actually isn't, there are a few groups, which have been allowed to opt out of SS, but they constitute a very small fraction of the population). With a widening gap between the top 20% of households in terms of average income and the rest of American households, the "burden" of Social Security taxes falls less and less heavily on that cohort as compared to all others - which upsets the contract of equally shared responsibility.


I do think that the wage base issue is the least important of those being discussed. The benefits of changing the current method are relatively minor.

I do find interesting that, so far, there has been little response to my first point - that the estimates of any deficit at all may be fundamentally flawed. Do you have any thoughts on that?
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