Wednesday, October 20, 2004

A Simple View on Kerry's Social Security Program

I thought about Social Security today and decided that it was time to explain in plain English what a Kerry plan may do to the people of America. I am using information from a few sources online regarding what John Kerry may do with social security if he is elected. The first article (and there are several more like this) can be seen in the link below

This plan is quite simple and looks good on paper to those that do not make less than $88,000. For anybody making more than that, Kerry has already reneged on the statement "I will not raise taxes for anybody making less that $200,000 per year. “

I will make this example clear to understand using a business which is known publicly in my area, the great Philadelphia Orchestra. If Kerry's plan goes into effect and raises the income ceiling on social security from $88,000 to $120,000 this will significantly impact the musicians, management, and funding of this non-profit organization.

If we say that the average player makes $128,000 per year (this average is not fact). Under current law, each musician has to pay $5,456 in social security tax per year. The orchestra has to pay the same amount of money that the musicians pay, $5,456. If the Kerry plan goes through each musician would have to pay $1,984 per year more in taxes. The Orchestra would have to pay that for each musician as well. The total extra burden on the orchestra members would be $210,304 ($1,984 times 106 musicians). The extra burden on the orchestra would be same $210,304.

What would happen if Kerry decides to remove the cap on social security payments just like the government did with medicare? The average musician would now have to pay $2,480 more than they are paying now, the math is the same for the Orchestra.

Let’s put these numbers in perspective with health care. Let's say the average doctor (this is not based on fact) is paid $200,000 per year. The Kerry plan for social security if it removed the ceiling on payments would now force that doctor to pay $6,944 more per year into social security. That's fine he/she can afford it (according to Kerry), but remember with social security that the business paying the worker has to pay an equivalent amount as the worker, so your hospitals or doctors offices will also have to pay an additional $6,944 tax per year. If we say that the normal hospital employees 50 doctors, that is now a burden of $347,200 that the hospital has to recoup in costs from you!

If we keep playing with numbers lets say that the average state has 50 hospitals (this again is not based on fact, but the number is probably much higher). This burden passed to the end customer is going to be $868,000,000 per year! That is just from the hospitals (please keep in mind these numbers are not based on fact but they are probably not too far off).

The idea of raising the income ceiling on social security will impact this country to an extreme never before seen. Keep these little pieces of information in mind as you decide how you vote this year!


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