SEIU 503 members joined community allies in Portland, Salem and Albany March 15 — the day millionaires get a boost in their paychecks — for informational actions replicated across the nation to dramatize the unfair advantage Social Security contributions rules afford the wealthiest Americans.
In Portland near the MAX stop at Northeast 7th Avenue, commuters were leafleted and by members who offering “free” rides in a large pink cardboard Cadillac for the 1% who stop paying Social Securty in mid-March each year.
Read SEIU 503 member LeeLa Coleman’s account of the March 15 action in Portland.
Social Security’s guaranteed benefits are an integral part of ensuring retirement security for all, after a lifetime of hard work and contributions. But our Social Security tax system has a cap: when workers reach $110,100 in earnings for the year, they no longer get taxed. This means they stop contributing to Social Security while the majority of us continue throughout the year.
For example, an employee who makes $220,200 — twice the cap — will stop paying Social Security taxes halfway through the year. An employee who makes 12 times the cap stops paying within the first month. For the last of the top 1% of wage earners, that stop date is now.
On top of the fact that the Social Security tax doesn’t apply to earnings over $110,000, it also doesn’t apply to investment income and capital gains — popular sources of income for America’s wealthiest. This means that those with the highest incomes effectively end up paying a lower Social Security tax as a percentage of their overall income, even though they may be eligible for higher benefits when they retire.
Take for example Mitt Romney, who paid just 0.1% of his income toward Social Security last year. Most of us paid at least 4.2%, and prior to the payroll tax holiday, which has been extended through 2012, were paying 6.2% toward Social Security.
As private employers continue to eliminate pension plans and cut retirement contributions of all types, Social Security is more important than ever before. For millions of low-wage workers who pay into the system year-round, Social Security benefits are less than $1200 per month, and this is often their primary source of retirement income.
As a basic foundation of many people’s retirement, the program works and has helped protect more than 20 million Americans from poverty. But Social Security benefits are not high enough to provide a secure retirement for all Americans.
So what’s the solution? According to Mitt, the answer is to cut benefits and raise the retirement age. Once again, his ‘solutions’ would only hurt the average American worker more. Romney has earned enough money in his lifetime that he probably has few worries about retirement; the rest of us aren’t so fortunate.
A guaranteed way to fix the imbalance in Social Security’s formula is to simply eliminate the cap, so that all workers pay the same percentage of their overall income into the Social Security Trust Fund.
By expanding the Social Security tax base so that all Americans pay the same rate on their income, we would generate more than enough revenue to raise benefit levels, expand access to Social Security and fill its long-term funding gap. If the 1% paid their fair share of Social Security taxes, we could make Social Security solvent for the rest of the 21st century and improve benefits for our most vulnerable seniors.