Continuing with the evaluation of the Third Way proposal for Social Security (with the awareness that the Joint Commission on Deficit Reduction is set to begin work soon), this post evaluates the Work Rewards for Seniors plan. Third Way proposes that senior citizens who work beyond a certain age should stop paying Federal Insurance Contributions Act (FICA) taxes. Third Way acknowledges a reduction of FICA revenue but assert that the proposal would produce savings sufficient to make up for the revenue loss.
- I think that there should not be a cutoff for FICA. As long as you earn income, you pay into the Social Security system. That expectation began at the person’s first wage-earning job and continues that way until a person stops working for wages.
- In addition, Third Way’s proposal causes problems when Social Security beneficiaries are not contributing to the Social Security system (from which the beneficiary is receiving funds).