No increase in SS tax base for 2010
There has already been a lot of press coverage of the fact that there will be no increase in the monthly benefits paid to Social Security recipients in 2010 because of the low inflation rate for the past year.
For the first time I can recall, we also have a freeze in the other side of that equation, the maximum earned income that is subject to the Social Security (aka FICA) tax. The maximum for 2010 will be the same $106,800 as it has been for 2009 according to IRS and the SSA.
I still stand by my prediction that it is only a matter of time before that ceiling is completely removed, as it was a while ago for the MediCare tax. The politics of class envy and soak the rich rhetoric are as hot and heavy as they’ve ever been; so forcing those “evil rich” people to pay more SS tax will be a very popular move.
Likewise, there will be also a stronger push to “means test” eligibility for future Social Security benefits, with those having an AGI and/or a net worth over a certain limit established by our all-wise rulers in DC phased out of receiving anything back from the SSA.
So, people earning over $100,000 will be forced to pay in more to the SS system with the probability of receiving even less of it back than ever before. If this doesn’t encourage more people to take legal steps to reduce what they pay in to the SS system now, such as by the effective use of corporations, it’s hopeless for those folks.