Why Can’t Our Politicians Agree on Big Issues?

My friend, Greg Barsh, and I were discussing Social Security and Medicare. These entitlement programs are running out of money.  None of the politicians that I know of are tackling the issue. No one, Republican or Democrat, wants to be the bearer of the bad news, that we either have to raise taxes, curb benefits, or some combination of the two.

FICA (Social Security and Medicare) deduction (now 7.65%) caps at $160,200 of income. That means that the bottom 93% of US earners pay FICA on their entire income, while the top 7% only pay it on the first $160,200 of income. There is an additional 0.9% Medicare tax on top earners, though.

According to my friend Greg, the top 7% of earners are about 2.5 million people, and 84% of what they make is not subject to the 7.65% FICA deduction. Lots of people make way more than $160,200 annually.

Lower earning people pay the full FICA charge, while lots of big earners’ income is exempt. This is regressive taxation.

Even among conservatives, not many are saying that they want to cut Social Security/Medicare benefits. Macron had the courage to increase retirement age (a decrease in benefits) in France. He showed courage to do the right thing. We have brave soldiers – where are the brave legislators to make difficult choices?

Glad to have your comments.

Lee@TABASFUNDING.com