The American Spectator

p>I wanted to add another dimension to your “Small Business Buster” analysis of busting the cap on Social Security payroll tax that does not seem to see the light of day enough (especially in Ivins’ writings). I’m a Property Casualty actuary so my direct expertise is not in Social Security but I’ve had to study more about SS in my actuarial training than many people could stomach. The issue is… In exchange for capping the amount of payroll tax contributed by high wage earners (i.e., those making over the cap) high wage earners receive a relatively lower amount of benefits upon retirement by way of a lower wage replacement ratio used in the formula to calculate retiree benefits. The lower wage replacement ratio for high earners does not seem to get a lot of attention in this debate but the fact that there is a cap on SS wages does. The cap on SS wages has been misused to suggest that SS taxes are regressive. The regressive idea is flawed because it does not look at the benefits side of the equation which is higher for low wage earners and lower for high wage earners when measured as a percentage of preretirement wages. The interplay between the cap and the wage replacement ratio instills an element of actuarial fairness in the program. br> — Chaz Yesker /p> p> David Hogberg says it is unfair to raise taxes on those who make over $90,000 and get nothing in return. What about all the schmucks who got taxed and will get nothing in return because, as Hogberg seems to advocate, the surplus that was loaned to other govt. departments is worthless. In other words, all the poor people were paying a huge regressive tax for the last 20 years. They did so with the promise they would get it back. Now conservatives are flipping the script. Is it fair to tax the rich in this case? You bet. br> — Unsigned /p> p> David Hogberg replies: br> Could you explain to me why it is fair to tax the rich because the government screwed up the Social Security system for the poor? (By the way, the poor will still get their Social Security benefits — how that will happen is one of the reasons we are having the debate over reform.) It was not the “rich” who caused this mess, so how is it fair to single them out for fixing it? /p> p> BYRD WATCHER br> Re: Michael Gronewaller’s letter (under “Thanks A Lott”) in Reader Mail’s