Letter to the editor: Social Security is still viable

Many young people have expressed concern about the long-term outlook for Social Security funding; however, credible projections show current Federal Insurance Contributions Act assistance will be sufficient to maintain full retirement benefits for the next 20 to 30 years. Currently, employees and employers are each charged 6.2 percent tax on the first $110,100 of wages and salaries to support Social Security; raising the cap to $150,000 would guarantee financial security of this vital insurance program for several decades.

Under current law, income from investments (almost 10 percent of total income taxes collected by the Internal Revenue Service) is taxed at a favorable rate of 15 percent instead of the progressive, generally higher, rates charged to ordinary income; this type of income also enjoys immunity from payroll taxes. Furthermore, hedge-fund managers (the top 25 collectively earned $22 billion last year) enjoy a special tax break called the “carried-interest loophole” which allows money they receive from investors to be taxed at the favorable capital gains rate. Basic fairness would demand that all income (regardless of source) be taxed at the same rate and that all compensation be subject to FICA charges.

Revising tax regulations to raise the cap subject to FICA assistance and to tax all income at the same progressive rates would ensure the financial viability of Social Security indefinitely. The long-range funding problem for Social Security can easily be resolved; what is missing is the political will to implement necessary changes in our current laws. Young people should recognize they have a vested interest in this vital program and are entitled to reap the full benefits; they should not be fooled by those who are currently spreading blatant misinformation designed to undermine the future of Social Security.