Why a sudden shift in earned income to the already well-paid?

According to a Wall Street Journal analysis, the percentage of total wages and salaries paid to top executives rose from roughly 28 percent of the national total in 2002 to 33 percent in 2007, just five years later. (The figure excludes non-salary compensation, such as incentive stock options, which would tilt the ground even further.)

Now, that’s a pretty remarkable shift of earning power over a very short time, and as the Journal points out, it has serious implications for Social Security. That wage shift toward the already well-paid puts more of the nation’s paycheck out of reach of the payroll tax, which isn’t collected on salary and wages above the legal ceiling, which this year is $106,800. (In effect, the payroll tax operates as a surtax on the income of the working and middle classes, with much of the income of upper earners exempt.)

Because of that shift toward high earners, an additional $1 trillion in annual salary is now out of reach of the payroll tax, meaning the Social Security Trust Fund is projected to use up its surplus by 2037, four years earlier than expected.

I’d propose three basic ways to explain that sudden shift in earning power:

One, top executives and other well-paid employees became considerably more productive and worked even harder in that time frame, while the rest of the American work force slacked off. Thus, the shift is purely the product of personal merit and anybody who dares to even raise the issue is a socialist. (See comments below, no doubt). This is the merit-based, classic free-market explanation that pretends the market is an exacting judge of each person’s contribution to the overall good, and rewards each person appropriately.

Or two, for reasons ranging from technology to global trade, the overall economy is simply shifting in ways that reward the upper managerial class and penalize those who make their living in other ways. This global megatrend means that earning power is being transferred from one group to another regardless of the personal merit or hard work of those involved, and is totally impersonal in its operation.

Or, option three, those in the managerial and executive class control the compensation process and have tilted it in their own favor, skewing it to reward themselves and their peers at the expense of others. That doesn’t necessarily make them evil or even particularly greedy; given human nature, any group of people, granted such power without a countervailing power to offset it, would do the same thing over time and have no conscious sense of doing so. And in 21st century America, the forces that once discouraged such behavior — social and cultural norms, taxation policies, corporate bylaws, etc. — have weakened to the point of being ineffective.

Of course, no single explanation probably applies, and the real answer is a combination of the above. But we ought to talk about it as a nation, because the phenomenon is real, and the explanation we settle upon will determine what, if anything, should be done about it.

336 comments Add your comment

USinUK

July 22nd, 2009
8:05 am

I’ll go for Option One … cuz everyone knows the market is ALWAYS right …

DB, Gwinnettian

July 22nd, 2009
8:08 am

the payroll tax, which isn’t collected on salary and wages above the legal ceiling, which this year is $106,800.

I sometimes wonder what percentage of Americans even realize this.

Doggone/GA

July 22nd, 2009
8:10 am

“I sometimes wonder what percentage of Americans even realize this”

I’ve know it for years. I’ve often wondered WHY there’s an upper limit.

DB, Gwinnettian

July 22nd, 2009
8:11 am

(See comments below, no doubt).

heh.

But we ought to talk about it as a nation

Good luck with that. Sociamalist! Crypto-FASCIST!!!!111!!!ELEVENTYS!!!!

Mrs. Godzilla

July 22nd, 2009
8:11 am

I pick door number 3!

Don Pardo show me what I have won!

I Report :-) You Whine :-(

July 22nd, 2009
8:12 am

Nothing should be “done” about it except by individuals, let me guess, bookman advocates the government penalizing the highly successful.

You too can overcome the “unfairness” of it all, graduate from high school, study hard in college, build a profitable business plan, work the hours necessary to make it happen.

Another route to highly compensated success is to become beloved by the democrat party and sell government favors in return for cushy jobs and book deals like the Obozo’s did.

Or you can whine from your high chair until the government gives you a whopping 400 bucks to stifle your crying.

Whoop dee do.

Government ain’t the answer, it is the problem.

ugaaccountant

July 22nd, 2009
8:12 am

Because social security is designed to pay for yourself, not to be a socialist redistribution of wealth. It’s just not well designed and probably needs an overhaul.

Doggone/GA

July 22nd, 2009
8:15 am

“Because social security is designed to pay for yourself, not to be a socialist redistribution of wealth”

Actually, no it isn’t. It’s the biggest, legal Ponzi scheme going.

DB, Gwinnettian

July 22nd, 2009
8:16 am

I’ve know it for years.

Well yeah, me ‘n all, most of my working life, but I’m frequently shocked at how little the average American understands about the taxes that they’re baited to gripe about incessantly by right wing elements.

And not just little guys, either. After reading Thomas Oliver’s incredibly stupid anti-healthcare legislation screed in Sunday’s paper, I’m thinking he–the AJC’s gosh-durned BUSINESS PAGE editor!–doesn’t understand it either.

(Or he’s just lying, which is a decent side bet.)

Must run. Later, all.

TnGelding

July 22nd, 2009
8:16 am

Doggone/GA

July 22nd, 2009
8:10 am

Because of the limit on benefits. That said, it should probably be eliminated at this point, along with several other simple modifications.

The Teacher

July 22nd, 2009
8:19 am

Nah, it’s just greed. Most of the executives do know what they are doing. Some deserve that money, most don’t.

pat

July 22nd, 2009
8:19 am

Why the jealousy? I suppose you want the government to get involved and control the pay of private companies? Perhaps you should would about the “plank in your eye, rather than the spec in your brothers”. You too can be a top earner if you are willing to do what it takes to get there, so quit whining about what other people are doing. Nobody is robbing from the poor to give to the rich, those who do deserve prison, but economics is not a zero sum game.

America’s biggest problem is that people are far to concerned about what others do and not concerned enough about what they themselves are doing. Don’t worry about these people, worry about yourselves. If everybody took care of themseleves, then nobody would need to be taken care of save for the sick and injured.

Doggone/GA

July 22nd, 2009
8:20 am

“Don’t worry about these people, worry about yourselves”

Translation: I got mine

TnGelding

July 22nd, 2009
8:21 am

Doggone/GA

July 22nd, 2009
8:15 am

A Ponzi scheme is known fraud. SS is a pyramid scheme. The scary thing is we’re the first generation to be able to draw full benefits. That said, it has been a successful program and can continue to be with minor tinkering. The automatic annual COLA put in during the Nixon administration, tho needed, threw it out of balance.

Kayaker 71

July 22nd, 2009
8:28 am

Raising the ceiling on Social Security FICA tax collection is a sure way to raise taxes on those who make less than 250K/yr. Or did I miss something in Bozo’s rhetoric about how that group would not have a “dime” of increased taxes? If it’s the “evil filthy rich” you want to target then you are pointing your guns at the wrong guy.

I Report :-) You Whine :-(

July 22nd, 2009
8:29 am

If your economic policies caused a sunstantial deepening in unemployment, massive losses in federal revenue, wage depletion, equity value losses on a scale not seen since the 1930’s, and, you are a democrat, then just lie like a rug to the American people, who you have no respect for and think are too stupid to understand-

White House Chief of Staff Rahm Emanuel told The New York Times Obama intends to use the news conference as a “six-month report card,” to talk about “how we rescued the economy from the worst recession”

laughable

Redneck Convert

July 22nd, 2009
8:31 am

Well, the shift Bookman is talking about is just some good old boys jumping ahead of the curve. If y’all are going to raise such a fuss about bonuses the big boys got no choice but to raise their own pay. See, except for the CEO, nobody pays any attention to what other execs make in salary. But everybody notices what they get in bonuses.

So the shift is your own fault and you need to stop griping about it. If you’d of stopped carping about the bonuses the shift wouldn’t of happened.

As for putting more pay out of reach of this Social Security scam, I got three questions. Ain’t there no Walmart greeter jobs the old codgers can get? Is begging on the street corner too good for these Unproductive old coots? Ain’t they ashamed of stealing money out of our wallets to give to theirselfs?

Anyhow, that’s my opinion and it’s very true. Have a good day everybody.

Rick

July 22nd, 2009
8:31 am

SS is an insurance, benefit are based on amount paid in. If we eliminate the salary cap, we should increase the payment cap. The more you pay in, the higher your payments. No need to change that. We need to eliminate SS in the long run. The old need to get what they have been expecting and the young need to realize that there will be no money left with or without SS.

Doggone/GA

July 22nd, 2009
8:32 am

“A Ponzi scheme is known fraud. SS is a pyramid scheme”

That’s a distinction without a difference. And I did say LEGAL. And yes, like all pyramid schemes…if you want to keep it going, you have to adjust it occasionally…otherwise it will get out of balance.

jt

July 22nd, 2009
8:33 am

Sheesh Jay, you’ll get a raise if, and only if, this gentleman deems it warrented.

What an incredible story.

JAMES C. KENNEDY
Chairman
Cox Enterprises, Inc.

James C. Kennedy is chairman of privately-held Cox Enterprises, Inc., a leading communications, media and automotive services company. He is the grandson of former Ohio Governor and presidential candidate James M. Cox, who founded the company in 1898. He also serves as chairman of the board for Cox Radio, Inc.

Kennedy has been with Cox since 1972, starting as a production assistant with Atlanta newspapers, where he held various positions including reporter, copy editor, advertising salesman, business manager and executive vice president/general manager. In 1979, he was named president of Grand Junction (Colorado) Newspapers, Inc. and, a few months later, publisher of the Grand Junction Daily Sentinel. While at the Daily Sentinel, he served as Chairman of the Colorado Division of Wildlife Commission and was awarded Conservationist of the Year.

In 1985, Kennedy transferred back to Atlanta as vice president of Cox Newspapers, a subsidiary of Cox Enterprises. He was named executive vice president of Cox Enterprises the following year, and in January 1988, Kennedy was named chairman and chief executive officer.

For what it is worth, I would love for you to get a big raise.

You deserve it.

TnGelding

July 22nd, 2009
8:34 am

I Report :-) You Whine :-(

July 22nd, 2009
8:29 am

The economic crisis of 2007-2009:

http://www.historycommons.org/project.jsp?project=credit_crisis

pat

July 22nd, 2009
8:34 am

You do know that the politicians you want to control private pay are dirty stinkin’ rich, right? What ever congress imposses on the private citizen, must necessarily apply it to themselves. They cannot exempt themselves like they did with government healthcare.

USinUK

July 22nd, 2009
8:35 am

pat –

“Nobody is robbing from the poor to give to the rich”

and that’s where you’re wrong … during the period in question (2002-2007), average wage growth remained below the headline inflation rate from June 2003-June 2006 … so, for 3 years, the majority of Americans couldn’t keep up with price increases

when companies overinflate their executives’ salaries, from whose pocket do you think that money comes???

Rick

July 22nd, 2009
8:36 am

Do you mean that the CEO of Cox got his job by birth? Doesn’t that hurt the little people trying to be successful.

Doggone/GA

July 22nd, 2009
8:38 am

“Nobody is robbing from the poor to give to the rich”

You need to learn your history. The rich has ALWAYS exploited the poor.

wbk

July 22nd, 2009
8:40 am

Social security benefits are a joke! Those who benefit from social security beneftis are those who have never paid in. However, you can not win elections if you do not pay off the dependent society the democrats have created.

Those who pay in and are entitled to receive the SS benefits are getting a lot less than they should because of the redistribution of money to those who do not pay in. If you want to help those dependent citizens, then write a check from your bank account and send it to them. It is allowed.

You want SS to survive? Then do away with the liberal democrat giveaways to those who do not earn it. Problem solved.

Sounds like Jay wants to tax the rich one more way. I guess I am lucky that I am not rich. I do not have to worry about people like Jay trying to steal my money.

TnGelding

July 22nd, 2009
8:40 am

Well, stockholders have to become more involved and put an end to the overcompensation. The skimming of profits for and by the top execs has to stop. That’s bad enough, but to continue the obscene raid during hard times when companies are losing money is unethical and immoral.

Turd Ferguson

July 22nd, 2009
8:42 am

How dare those Execs/Mgr’s receive more pay than the mailroom cart pusher. This is an OUTRAGE!!

pat

July 22nd, 2009
8:42 am

If you people have evidence of wrong doing, bring it to the courts. Ill gotten wealth is illegal already. Being jealous of others because they are rich is laughable.

It also makes you look pathetic and petty. Why don’t you look in the mirror and figure out what you can do to fix yourself? When you have perfected yourself, then go after others.

TnGelding

July 22nd, 2009
8:43 am

wbk

July 22nd, 2009
8:40 am

If you don’t pay in, you don’t get a benefit. What about all the ones that do pay in and never collect a dime? SSI does not come out of the SS trust fund:

Supplemental Security Income (SSI) is a Federal income supplement program funded by general tax revenues (not Social Security taxes):

It is designed to help aged, blind, and disabled people, who have little or no income; and

It provides cash to meet basic needs for food, clothing, and shelter.

http://www.socialsecurity.gov/ssi/index.htm

Kamchak

July 22nd, 2009
8:44 am

A five percent raise on pay that is already nontaxable while organized labor is making wage concessions. Trickle down is a warm yellow stream.

Trust me

July 22nd, 2009
8:45 am

Jay,

I did not spot any discussion regarding the trickle-down effect. I think it is reasonable to assume that the Republican party’s laissez faire philosophy and practices have also aided and abetted the money hungry even without listing specifics.

TnGelding

July 22nd, 2009
8:45 am

Turd Ferguson

July 22nd, 2009
8:42 am

How much money does one household need? At some point they accumulate so much that they can’t manage it effectively, hence the current recession. If pay was more equitable, we wouldn’t have to redistribute the wealth.

Kayaker 71

July 22nd, 2009
8:48 am

Gelding,

I don’t want the government “redistributing” any of my money. How absurd!!

TnGelding

July 22nd, 2009
8:49 am

pat

July 22nd, 2009
8:42 am

We’re not jealous, at least I’m not. I admire them. But the rich wannabe conservatives that complain about the rich being overtaxed are simply wrong. You can’t get blood out of a turnip and if they continue to earn so much of the available income then they can expect to be heavily taxed until we can get spending under control.

USinUK

July 22nd, 2009
8:49 am

“How dare those Execs/Mgr’s receive more pay than the mailroom cart pusher. This is an OUTRAGE!!”

that’s right, TF, totally miss the point and pat yourself on the back for doing so.

I don’t care that C-level folks make more than I do – I expect them to. However, when the salary they are making is an obscene multiple of the lowest person’s salary … without including their bonuses and stock options … then, yes, I think that public outrage is in order. Especially when this same public – you know, the ones that actually do the work – are not only NOT reaping rewards, but are seeing their salaries grow at a slower pace than inflation.

Paul

July 22nd, 2009
8:50 am

Jay

I’ll go for option 3 (those in the managerial and executive class control the compensation process and have tilted it in their own favor, skewing it to reward themselves and their peers at the expense of others) because it’s a restatement of that Sunday School saying so many repeat but rarely have the chance to practice: The Golden Rule. Even those who never attended Sunday School can state The Golden Rule: “The person with the gold makes the rules.”

TnGelding

July 22nd, 2009
8:51 am

Kayaker 71

July 22nd, 2009
8:48 am

They wouldn’t have to if every working person was paid a living wage!

Absurd? Well it’s the American way, and has been at least since the Great Depression.

Blue

July 22nd, 2009
8:51 am

Doggone GA; it’s not that I ‘got mine’. It’s that I ‘earned mine’. YOU, on the other hand, have NOT earned mine.

Kay

July 22nd, 2009
8:54 am

“Trickle down is a warm yellow stream” – truer words were never typed! As for me, I am so thankful that my company gave me a .30 merit raise! I scored the highest score on my review and never missed a day of work. Oh and my benefits are going up 20% and my 401k matching went from 6% – 4%. I am grateful to the CEO’s, I mean master!

getalife

July 22nd, 2009
8:54 am

They won the class war,

Paul

July 22nd, 2009
8:55 am

Blue

Fine. So why should a person making, say, 20 times the average household income pay a total tax rate that’s only a small fraction of the average household? I’m speaking of rate, not gross amount.

Trust me

July 22nd, 2009
8:55 am

Nobody is robbing from the poor to give to the rich, those who do deserve prison, but economics is not a zero sum game.

Amazing. Some people even contradict themselves within a single sentence. Fortunately, you did recognize, secondly, that your use of the word “Nobody” was incorrect and Madoff’s victims, for starters, thank you. As for your “not a zero sum game” comment, would you care to present your analysis that led you to that conclusion. I’m quite interested, really I am.

So it ain't so, Joe

July 22nd, 2009
8:55 am

The same men yelling socialism, communism, Obozo, etc., are the same white men collecting more unemployment benefits than any demographic in the nation. Go figure.

MorningStar

July 22nd, 2009
8:56 am

((((any group of people, granted such power without a countervailing power to offset it, would do the same thing over time and have no conscious sense of doing so))))

So much for lack of those pesky little “Government” regulations. Any organization or governmental agency NOT subject to regulations will become a loose cannon.

I must disagree that most are not possessed by innate greed and evil, but merely must do whatever they can ‘get away with,’ without an ounce of regard for their fellow man.

These ‘greedy ones’ will do whatever it takes to line their pockets, and don’t give a twit what happens, as long as them ‘n theirs are OK. Compassionate conservatism at it’s best!

Not every corporate clown falls into the evil and greedy catagory, just most, and certainly the ‘most’ is significant enough to require stringent regulations and laws to protect working class America.

On second thought, perhaps they think they are placed here on earth by the Almighty, and whatever they do is fine. Anyone been keeping up with the 9th Street gang?

Paul

July 22nd, 2009
8:56 am

Kay

Don’t count your chickens… if a disparate impact is alleged, you could lose it all….

lovelyliz

July 22nd, 2009
8:57 am

And it’s not like these executives really “earn” it. Remember the days of pay for play? If LeBron James does play he doesn’t ear full salary. If the Cleveland cavaliers have a losing season, he too loses out.

What we have now are executives with no vested interest in the well-being of the companies they are now running. They didn’t start the companies and they haven’t been working there for years. They also know that they will get their mega salaries and golden parachutes NO MATTER WHAT. The company performs badly and profitable rank and file employees are laid off or lose benefit. Executives drive corporations into the ground AND TEHY GET PAID everything and then some.

lovelyliz

July 22nd, 2009
8:58 am

And it’s not like these executives really “earn” it. Remember the days of pay for play? If LeBron James does play he doesn’t ear full salary. If the Cleveland cavaliers have a losing season, he too loses out.

What we have now are executives with no vested interest in the well-being of the companies they are now running. They didn’t start the companies and they haven’t been working there for years. They also know that they will get their mega salaries and golden parachutes NO MATTER WHAT. The company performs badly and profitable rank and file employees are laid off or lose benefit. Executives drive corporations into the ground AND THEY GET PAID everything and then some.

Kayaker 71

July 22nd, 2009
8:59 am

Joe,

Maybe it’s because there are more of them in the workforce. White working America would have to go a long way to collect enough to match the amount going out in welfare and public assistance to those who don’t think it is necessary to work for a living. Go figure.

USinUK

July 22nd, 2009
9:00 am

“They didn’t start the companies and they haven’t been working there for years. They also know that they will get their mega salaries and golden parachutes NO MATTER WHAT. The company performs badly and profitable rank and file employees are laid off or lose benefit. Executives drive corporations into the ground AND TEHY GET PAID everything and then some.”

lovelyliz … as always, you are my hero

well said.

Bosch

July 22nd, 2009
9:01 am

Oh good Lord, already the “you’re just jealous” card. How juvenile.

Anyway, I like option one. Top executives who make bajillions do not work any harder than the rest of those in a company.

Doggone/GA

July 22nd, 2009
9:02 am

“Doggone GA; it’s not that I ‘got mine’. It’s that I ‘earned mine’. YOU, on the other hand, have NOT earned mine.”

“The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. ”
John Kenneth Galbraith

Bosch

July 22nd, 2009
9:02 am

lovely liz,

Yes indeed. Well said.

Shawny

July 22nd, 2009
9:03 am

Man, that Obama is more like his predecessor than I thought:

http://www.foxnews.com/politics/2009/07/21/obama-irks-democrats-declaring-ignore-legislation/?test=latestnews

“During the previous administration, all of us were critical of (Bush’s) assertion that he could pick and choose which aspects of congressional statutes he was required to enforce,” the Democrats wrote in their letter to Obama. “We were therefore chagrined to see you appear to express a similar attitude.”

Bosch

July 22nd, 2009
9:03 am

Kayaker,

That is an absurd statement. Please, name ONE social program where people get money simply because they are just too damn lazy to work.

MorningStar

July 22nd, 2009
9:04 am

USinUK @8:05AM — Yea right UK! I’m still waiting for the trickle down in the trickled down economy to work!

Doggone @8:20AM- See what I mean! You’re sooo right Doggone. Compassionate conservatism at it’s finest!!!

Gelding @8:21AM- SS has been one of the most successful programs ever initiated, and zillions of elderly and less fortunate would be destitute with the extra little tidbit. Tell that to the “I’ve got mine,” crowd. SS should be left alone and used for what it was intended. No borrowing to finance some stupid whatever.

getalife

July 22nd, 2009
9:04 am

Rahm said they saved the economy.

They did, for the establishment.

cons go bankrupt, go on welfare, lose everything they worked hard for and still their ideology makes them want more of them getting screwed.

Insane.

For the record...

July 22nd, 2009
9:04 am

Then why not have a flat tax, then no one on either side can “biotch” about getting a raw deal. Most people are at the income level they CHOSE by virtue of their sacrifices, whether thru school loans, hard work, and long hours…others CHOSE to leave school, hang with their homeys, and now want the ones who did the work to support them.

YOU ARE WHERE YOU CHOOSE TO BE.

Blue

July 22nd, 2009
9:04 am

Paul; the top 50% of income earners already pay 97% of the federal income burden (check out the IRS site for that). The top 10% of earners pay over 50% of the federal tax burden. Contrary to popular leftist rants, high income earners DO pay taxes…and pay most of it. I am a high income earner and I pay not only a large amount, but a large percentage. How are you going to sit there and make assumptions that I pay a low percentage when even the IRS numbers show that the tax paid by higher income earners is most of the revenue paid in taxes? Taxing people more just because they have succeeded is NOT the answer; lowering spending (which Bush did a HORRIBLE job of and Obama is going to do even worse) is the answer. So tell your nonsense to someone else; I give about 40% of my income to taxes for you already.

TW

July 22nd, 2009
9:05 am

“The recession in Georgia has hit all demographic groups hard, but white men the hardest, according to a report issued today by the Labor Department.”

Poetic justice? Guess egos a loser.

But, but, but, ‘w’ has a chainsaw…and manteats makes me feel like a man…bwaaaaaaaa

Use the time in the unemployment line to grow a brain – and a pair :)

Joey

July 22nd, 2009
9:06 am

A combination of your options and other actions. Because this phenomenon is real, I submit:

Option four, TARP, Bailout and other Rescue funds were strewn freely by our Federal Government to the Upper-management of banks, auto manufacturers, insurance companies and other carefully selected entities such as Fannie and Freddie.

Rather than use this money as the public was lead to believe they would, Upper-management of these companies provided compensation and rewards to Senators, Members of Congress and other powerful Federal Government persons; as well as additional compensation for themselves.

Mrs. Godzilla

July 22nd, 2009
9:07 am

Some funny thinking…..

When we critiqued military policy – we hated the troops.

When we questioned the President’s policies – we hated real Americans.

When we wanted women to have sovereignty over their own bodies – we were baby killers.

When we wanted healthcare for all – we were socialists.

Now, we want fairness in wages – and we are jealous…..

It’s amazing to me just how little the “little” right actually know
about what Americans feel.

TnGelding

July 22nd, 2009
9:08 am

Kayaker 71

July 22nd, 2009
8:59 am

Those days have been over since the Clinton administration.

Ben

July 22nd, 2009
9:08 am

Social security, when it was created, was criticized as something that would become an income redistribution scheme. The politicians who created it set the payroll cap to keep it from ever becoming an income redistribution scheme because that was not the purpose of it. And it was promised over and over that it would never become such.

Now people want it to be an income redistribution scheme. This is why you should never trust government programs. When they start, the politicians swear it will be one thing…. And then once it’s become law, it morphs into whatever they want it to be, no matter what promises were made to voters who approved it.

Brad Steel

July 22nd, 2009
9:08 am

Smart executives take their compensation in deferred options and thus pay only the measly 15% capital gains tax on the lion’s share of their pay. That is how Warren Buffet’s effective tax rate is 17%, while his secretary, who makes a tiny fraction of Buffett’s compensation, pays an effective tax rate of 30%.

The pay gap is not nearly unfair as the regressive tax structure.

Curious Observer

July 22nd, 2009
9:08 am

I’m not in favor of phasing Social Security out, as some have suggested. The simple fact is that the majority of American workers simply cannot save enough to fund their retirement years, even with tax-deferred contributions. Yes, it seems at first glance an outrage that earned income after the first $106,000 or so is exempt from Social Security withholding, but raising the threshhold is not a long-term solution to the funding problem, if maximum benefit levels are raised correspondingly, as they should be. Congress exercised the power to raise the required contribution levels over and over (and widen the categories of eligible beneficiaries) since the system was founded; it also has the power to raise them again. That’s the painful but necessary solution to the funding problem.

mm

July 22nd, 2009
9:09 am

I’ll bet each person here defending the pay of executives are probably not even in the top 40 percent of wage earners. But they have to tow the GOP line.

If there’s no cap on executive pay, there should be no cap on the payroll tax.

Food for thought: What was the pay of congress when the cap was enacted?

USinUK

July 22nd, 2009
9:09 am

“Then why not have a flat tax, then no one on either side can “biotch” about getting a raw deal”

I’m happy to vote for that … just not a sales tax – an flat income tax.

although, that does lead one to wonder, what would the GOP do without their favorite “solution” (tax cuts!)

TnGelding

July 22nd, 2009
9:10 am

Shawny

July 22nd, 2009
9:03 am

Does that mean you’re now a supporter?

Blue

July 22nd, 2009
9:10 am

Doggone/GA

“The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. ”
John Kenneth Galbraith

You can pick and choose quotes from people that are obviously liberal all you like, and it has no bearing or validity to me. I consider myself superior to NO man, but consider myself very blessed. I also help a LOT of people who struggle. I live my life by the credo “I believe God has allowed and will allow a lot of money to pass through my hands as long as I don’t let it all stick to my fingers”. I believe my professional success will continue as long as I use it to help others as well. Nice of you to try to use a quote to lump us all in together, though. I would NEVER accuse all liberals of wanting to be lazy and leach off of successful people.

Trust me

July 22nd, 2009
9:10 am

White working America would have to go a long way to collect enough to match the amount going out in welfare and public assistance to those who don’t think it is necessary to work for a living.

Care to translate that into something quantifiable.

Mrs. Godzilla

July 22nd, 2009
9:11 am

Doggona….

I love that JKG quote, I use it regularly…..it’s powerful.

Bosch

July 22nd, 2009
9:11 am

Mrs. G.,

You forgot one:

When we ask why our troops are in Iraq – we are celebrating the death of soldiers.

Ben

July 22nd, 2009
9:11 am

Mrs. Godzille, I have no doubt that were you in the position of any of these CEOs getting very high salaries, the corporate earnings would plummet far more than the salary of said CEO. On the other hand, I’m sure any idiot could replace you in your job without affecting the company’s bottom line at all.

Finn McCool

July 22nd, 2009
9:12 am

Other countries have ways to protect the working classes and the poor and keep them from just falling under the wheels of commerce. The US is not about that kind of thing. That’s just not the American way. You’re on your own here.

I think #2 was a major reason. You protect what’s yours and you build defense around your own needs. I don’t think anyone set out to screw the working class or the poor.

If you watch closely you can see it happening in the legislative process. For example, Phil Gramm and the prescription drug legislation back in 2002 or so which made it illegal for Medicaid/Medicare to bargain on drug prices. Things like that which shift the cost burden down on individuals.

or how about NAFTA? making it easy to move jobs outside the country. This brings down wages for everyone here.

or how about the lack of interest by those in power regarding immigration? Those peopled being in this country help businesses keep wages low. It has a ripple effect that spreads through all industries.

TnGelding

July 22nd, 2009
9:14 am

MorningStar

July 22nd, 2009
9:04 am

The “fix” duing the Reagan administrtaion made that impossible. It’s my guess that only about 25% of beneficiaries really need it. The rest goes to the middle class and wealthy. My question is why? At some point benefits have to be taxed at a 100% rate. It allowed us to retire early, but if we had worked on to 65 we would have been better off financially without it.

getalife

July 22nd, 2009
9:14 am

It’s their ideolgy Mrs. G.

They still cling to it after losing everything.

As long as they think they are right, it is all good.

For the record...

July 22nd, 2009
9:15 am

“although, that does lead one to wonder, what would the GOP do without their favorite “solution” (tax cuts!)”

Or the Democrats “chicken in every pot” vote getting giveaways?

It cuts both ways. But we are in agreement on a flat tax rate.

Kayaker 71

July 22nd, 2009
9:16 am

Bosch,

Look around you. The state of California is broke because they have the most liberal public assistance laws in the nation, much of it going in the form of medicaid, food stamps, housing, medical care and Aid to Dependent Children. It’s the biggest social program in the whole damn country and those who choose not to work have been sucking off of that for a very long time. The Welfare Reform Act was supposed to solve all of that and has done some good but the states are strangled by giving money away to those who sit on their backside. It is not an absurd statement, far from it.

Brian

July 22nd, 2009
9:17 am

So, it’s all about wealth envy this morning huh?

“Many people must be ruled to thrive. In their selfishness and greed, they see free people as their oppressors. They wish to have a leader who will cut the taller plants so the sun will reach them. They think no plant should be allowed to grow taller than the shortest, and in that way give light to all. They would rather be provided a guiding light, regardless of the fuel, than light a candle themselves.”

USinUK

July 22nd, 2009
9:18 am

“Or the Democrats “chicken in every pot” vote getting giveaways?”

um. well, that has nothing to do with flat tax on income … but, okay.

Swami Dave

July 22nd, 2009
9:19 am

“Option One”: Just as a correction, the “market” does not “judge of each person’s contribution to the common good”. It -is- an accurate judge of each person’s value as measured by someone else’s willingness to pay and it -does- reward each person appropriately. To your post, over the timespan measured, it would seem that in a growing competitive global marketplace (which was the case from 2002-2007), the value of creators and leaders was greater than that of clerks, cashiers, and assemblers.

“Option Two”: If earning power is focusing more directly to areas of specific skill and / or leadership qualities, then those enjoying the benefits are simply those who made good decisions concerning what skills to develop and where to direct them. On the obverse, the reality is that in a global market those with “commodity” skills (i.e. they do something that many others do or could do with minimal training) are simply not as valuable as the available pool of workers has expanded. It is probably not so much that the value of leaders has increased as it is the reality that the value of followers (of which there is a ever-growing global pool) has decreased.

“Option Three”: If those outside of the creators / leaders group take issue that this group places greater value on their own skills and talents, then they are free to step out, increase / change their skillset, and move to the more marketable sector. Better yet, they can quit providing commodity skills to someone else’s organization, start their own, and hire others from whom they will collect a portion of what they produce. However, so long as they wish to follow the least resistance path of “get a good job – work your 40 hours – collect your paycheck – spend weekends at the lake / at the game”, then they should not complain that their efforts will simply earn them a living while they are building wealth for others who chose a different path.

Net-Net: We all have choices to make and they have consequences. If one is unwilling to make the hard choices and put forth the effort to see them to fruition, then the ultimate blame for the consequences that follow goes to them.

-SD

TnGelding

July 22nd, 2009
9:19 am

For the record…

July 22nd, 2009
9:04 am

We don’t all start out at the same place. It’s harder for some than others. But it has to start with children at a very early age. In many cases they just don’t know what education, hard work and determination are capable of. But what you say is true in many of us, but not all.

Turd Ferguson

July 22nd, 2009
9:19 am

I must agree with Pat.

If one is doing their job and being HONEST with THEMSELVES about it, which most these days are incapable, then good things will come. Most of these whiners, crybabys think they are entitled to something for nothing.

Years ago I was corresponding with an individual that stated they were the best CSR in the State of GA and were insulted that the local cable company only wanted to pay them $17K annually. Further this person stated they should be getting paid $50K annually. Unfortunately this is type mindset is very common these days.

Most of the persons who complain about such…these so-called “underpaid” dont deserve what they currently earn.

Bosch

July 22nd, 2009
9:20 am

Kayaker,

As TNGelding mentioned earlier – those days are over – Clinton took care of that.

Again, name ONE social program where people get money simply because they are just too damn lazy to work. Answer: you can’t because there isn’t one.

Your stereotypical Welfare Queen doesn’t exist anymore.

Doggone/GA

July 22nd, 2009
9:21 am

“So, it’s all about wealth envy this morning huh?”

Actually, it isn’t…but I can see how it could be interpreted that way. What’s it’s about is embodied in the book so many people love to quote: “For unto whomsoever much is given, of him shall be much required: and to whom men have committed much, of him they will ask the more.”

But there are still too many (as you can see if you read above) who are wedded to the “I got mine” alternative philosophy.

I Report :-) You Whine :-(

July 22nd, 2009
9:23 am

Modern socialism originated in the late 18th-century intellectual and working class political movement that criticized the effects of industrialization and private ownership on society. Karl Marx posited that socialism would be achieved via class struggle and a proletarian revolution and become the transitional stage from capitalism to communism.

Seig Heil, bookman!

Yes we can!

TnGelding

July 22nd, 2009
9:24 am

Blue

July 22nd, 2009
9:04 am

That’s because in order to reduce your tax rate Bush agreed to cut taxes on the rest of us as well and too many got dropped off of the tax rolls. We have got to get them back on and raise taxes back to where they were when Clinton left office. I assume that 40% number includes state and local taxes? The EIC needs to be suspended or eliminated as well.

Finn McCool

July 22nd, 2009
9:25 am

Warren Buffett (paraphrased):

“There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

http://www.nytimes.com/2006/11/26/business/yourmoney/26every.html

IMHO, This is the most important quote to remember.

union boy

July 22nd, 2009
9:26 am

70K a year is not enough to pull a lever all day!

everyone unionize!

fight the power

Turd Ferguson

July 22nd, 2009
9:27 am

“The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. ”

John Kenneth Galbraith

LOL…Superior moral justification…LOL.
Selfishness? I wouldnt use that term, however, why should I give you money I have earned. I all boils down to personal choices…OH MY what a concept.

Trust me

July 22nd, 2009
9:28 am

The top 10% of earners pay over 50% of the federal tax burden.

Some people apparently have a hard time grasping that. They seem to be hung up on the notion that these people must be paying too much in taxes while they should be thinking about how much of a nation’s wealth is going to such a small number of people in order for them to be paying that much of the taxes given that the average tax rate for this group of persons is so low. They do not pay 40 percent in fed taxes or 30 percent or 20 percent. And, of course they earned every penny of it.

Doggone/GA

July 22nd, 2009
9:28 am

“however, why should I give you money I have earned”

Translation: I got mine

Mrs. Godzilla

July 22nd, 2009
9:29 am

Ben says to me:

“”Mrs. Godzille, I have no doubt that were you in the position of any of these CEOs getting very high salaries, the corporate earnings would plummet far more than the salary of said CEO. On the other hand, I’m sure any idiot could replace you in your job without affecting the company’s bottom line at all”"

Well, Ben! What a delightful human being you are! You add so much to the discussion! I bet you are just the life of the party everywhere you go!

Pfui.

union boy

July 22nd, 2009
9:30 am

“Again, name ONE social program where people get money simply because they are just too damn lazy to work.”

you’re right – many folks work harder at trying to beat the system (ex. disability) than they would if they actually went out and got a job!

Gale

July 22nd, 2009
9:31 am

I am ok with the SS ceiling. For one thing, I figure someone in that program making that much money can afford to fund their own retirement. Two, I do not expect to share in someone else’s wealth. Three, I figured out 30 years ago that SS would likely be broke by the time I retire. I will be surprised if I was wrong about that.

On the other hand, the lower middle class, those of us paying into the system are not funding it enough to pay for the many people receiving SS. Hence, my calculation that the SS fund will run out.

Regarding an early comment about “a living wage”, that is a matter of perception. Personally, I do not consider that minimum wage should be adequate compensation to support a family of four. A living wage ought to be enough to support one person in a small apartment with no car. If that person wants more available cash, they can share a living space, get another job, etc. The job is worth what it is worth, not what I would like to earn.

Turd Ferguson

July 22nd, 2009
9:31 am

Thats correct…I got mine via hardwork, arriving early/leaving late, going the extra mile which is something the liberals want to penalize.

So sorry for being successful.

jconservative

July 22nd, 2009
9:32 am

Per Whiner:

“You too can overcome the “unfairness” of it all, graduate from high school, study hard in college, build a profitable business plan, work the hours necessary to make it happen.”

And 20 years from now, after all the present kids have done this, we can have a work force of 100 million CEOs & CFOs all making in excess of $30 million a year.

Is this a great country or what?

Actually Whiner, that statement is the same “pie in the sky” Liberalism that has been ruining this country for the past 75 years. Fact: some are born with a lot of intelligence & focus, some are not. That is how the real world works.

Normal

July 22nd, 2009
9:33 am

This kind of stuff hurts my head. Corporation influence on our Government has brought us to what we have today, but I have managed to pay off my houses, cars and I pay my credit cards off every month. I pay my taxes, or defer them when I can’t with investments. The “Normal Corporation” isn’t big on profits, but it does keep it’s head above water. Can’t worry what the fat cats do, gotta take care of me and mine…that’s all anybody can do.

I have too much to do this morning, talk at y’all later….

Doggone/GA

July 22nd, 2009
9:33 am

“Thats correct…I got mine via hardwork, arriving early/leaving late, going the extra mile which is something the liberals want to penalize”

Well, if you profess to be a Christian…there’s always the advice that Jesus gave to the rich young man.