Whenever I hear Republicans talk about Democrats’ insatiable desire to raise taxes, I always have wondered just how important is this issue. It’s very important! Once we begin to do the figures….
Every year in November, I have to attend two LONG days of income tax school to prepare us for the new filing season. So many political references were made this year — more than ever before — with many mentions of Hillary’s proposed health care plan and Charlie Rangel’s insane bill that has been vetoed by Bush that will certainly pass of a Democrat enters the White House next year.
Take social security for example. Democrats propose that the cap of $97,500 (where taxpayers STOP paying into social security in any given tax year) be removed thus solving the social security crisis as the baby-boomers begin to withdraw in 2008. Sounds almost too easy, doesn’t it? And who in the hell are those greedy rich people to complain about it anyway? Let’s do the math:
Social security is figured by taking life expectancy of 35 years and corresponds those 35 years with the highest years of income. Now, earlier years of income are indexed properly to match today’s dollars. The grand sum of the 35 years of social security wages are then divided by 420 to get their base. If their base is 0.01 to 680.00, they get 90% of that base. If the base is 681.00 to 4154.00, they get 35% of that base. If the base is 4,155.00 or over, THEY GET 15% of it.
Three income levels of 97,500 per year, 30,000 per year, and 8,000 per year:
- 97,500* 35 years = 3,412,500/420months= 8,125.00 * 15% = 1218.75 per month.
- 30,000*35 years = 1,050,000/420months= 2,500.00* 35% = 875.00 per month.
- 8,000*35 years = 280,000/420months= 666.67 * 90% = 600.01 per month
Throughout the working years, Americans pay 6.2% of their gross wages into social security. For the income levels described above, let’s see how each one pays into social security.
- 97,500*35 years = 3,412,500* 6.2% = $211,575.00
- 30,000*35 years= 1,050,000* 6.2% = $65,100.00
- 8,000 * 35 years= 280,000 * 6.2% = $17,360.00
At the end of the day, if you make 8,000 per year in your working years, you will pay $17,360.00 into social security and will receive $252,000 in monthly benefits over your remaining life (35 years).
If you make 30,000 per year in your working years, you will pay $65,100 into social security and will receive $367,500 in social security benefits over your remaining life (35 years).
If you make 97,500 per year in your working years, you will pay in $211,575 into social security and will receive $511,875 over your remaining life (35 years).
Finally, let’s take a look at the Return on Investment for each.
- 8000 per year = 252,000/17,360 = 14.52 RETURN
- 30,000 per year = 367,500/65,100 = 5.65 RETURN
- 97,500 per year = 511,875/211,575 = 2.42 RETURN
This should be printed and it should be carried with anyone who gives a damn about their future.
To think, Hillary wants to do the same thing essentially with health care.
To think, liberals think that high-income tax payers are not paying enough into social security.
To think, liberals want to regulate the wages of doctors. They want more free government income, bigger unions to boss small businesses around, and don’t want to work for any of it.
steveflesher
Philip
Mel Maguire
Mark Ciavola
