Ms. Clinton argued in the debate last night that raising the FICA cap results in a tax increase on the middle class, including firefighters. The current cap is $102,000. Do any firefighters make more than $102,000? If so, do any make enough more than $102,000 such that the tax increase is more than $100 or so? Is there any reasonable definition of middle class that includes those who make six figures?
Is there any chance that she was just mistaken?
I suppose that’s always a possibility, as we’ve learned over the last seven years. But the circumstantial evidence suggests she was not just mistaken, since she has repeated this line for a while now in the campaign.
When you say the current cap is $102,000, do you mean for an individual, or is that for a couple filing jointly?
Well, were her lips moving? That’s the tell.
Seriously though, I have to know if the $102k is for a single or joint income. But a single person making anything much more than $100k does not match any definition of middle class that I find reasonable, even if they are a firefighter.
I’m wondering if some of the larger metropolitan areas (such as New York City where she currently lives) have a cost of living such that $102,000 would be deemed upper middle class income. With some New York City rent figures being what they are, I could find it quite believable. Atrociously high figure, and symptomatic of issues wrong with America, but in no way Sen. Clinton’s fault.
The current cap is $87,000, not $104,000.
For 2008 it is $102,000. It was 87,000 in 2003.
I have no idea if she was lying or not, but I absolutely think that if a person has to pay NYC housing prices, a low 6-figure income is still middle class. The teachers at the local public high school where I live make in the VERY high 5 figures, and I believe some in the low 6 figures, but I’d have to confirm that.
Never mind. I see the 2008 number is indeed $102,000.
Yes, but most of the people in the U.S. (including the vast majority of firefighters and teachers) do not live in NYC. I have no problem with paying them more; but they shouldn’t be used as a benchmark for tax policy.
She was probably talking about combined incomes but I still favor removing the cap anyway. Why should rich people be able to skate on their responsibilities? I say make them pay through the nose. If anyything there should be a floor. Only those who make more than 100 grand should have to pay.
I wouldn’t dispute that, but (I can’t believe I’m giving Hillary the benefit of the doubt, here) considering that she is a senator from NY, her experience is with her constituency, which is completely skewed from most of the country. Perhaps she has a lack of perspective due to this.
Living in a high-rent city the way I do, this is a sticking point for me in regards to tax policy. If you make more money than the average person, but your living expenses are much higher, then how can you necessarily be considered “rich?”
Recently, when I mentioned what I pay for daycare here, someone commented that they thought they’d move to Chicago to become a daycare provider, based on what she is earning per kid ($6 an hour). I can assure everyone that my daycare provider isn’t rich by any means…what I pay for my 2 kids probably doesn’t even cover the rent on her house. And due to licensing, I think she can only take 6 total, so it may sound good, but housing costs WILL take a bite out of it.
What responsibility? As we were constantly told during the Social Security debate, this program is a form of government insurance for old age (and things like disabilities, etc.). The amount of money you put in is related to the amount of money you get out. The cap is in place because of that reason.
If you want to turn SS into a government program that helps old people in poverty with a payment, then fine. Let’s restructure the program so that the rich don’t get it. That way there is more for those who really need it. But if you are goig to have a system that’s sold to the public as a social insurance program for all and have the payment out related to your contribution, then there should really be a cap in place.
Yes, let’s. Can I count on your vote? 
Here in California, base pay for a regular fire fighter, I don’t think so…
But they usually work a ton of overtime, and if you add that in, or count other benefits, than possibly.
From http://www.signonsandiego.com/uniontrib/20060325/news_1n25fire.html :
My understanding is that $102,000 is the 2008 cap per wage earner. But I’m no expert on tax policy, so I welcome correction.
A fair question. I live in Manhattan very comfortably on much less than six figures, for what it’s worth. I’d be curious to see some numbers on cost of living.
mlees, thanks for the stats. Do those salary figures include benefits or not? Are benefits taxed under FICA?
To go back to the original question, the payroll of all public employees of San Jose, and many other California cities, was recently made public, because of a California Supreme Court decision.
It turns out that there are MANY firefighters that make more than $102,000. True, it’s not the salary for a starting position, but lots of people higher up in ranks make that, and much more.
Ed
You can. If I was dictator, I’d do away with it completely. But since that will never happen, I think it makes sense to stop pretending that every single old person in this country deserves to get SS (and, while we are at it, Medicaid). I think that to qualify for both of these programs you should have to prove that you have a low income and few assets. Not as low as Medicaid, but there is no reason that Warren Buffet should qualify for either program. Phase this in over the next twenty to thirty years, move away from payroll taxes and pay for both programs out of general revenue, raise the retirement age to the mid-70s, and I think we’d be in a lot better position than we are today. It would cost less for taxpayers (pleasing conservatives) and still give the poor a safety net (pleasing liberals). But of course the AARP would never go for this type of middle ground proposal, so it will never happen.
Exactly what I was thinking, along with the fact that this is why central planning for governments is such a stupid idea. A hundred grand is a completely different thing in Manhattan than it is in rural North Carolina. Taxing them the same is far more onerous on one than the other. It’s too bad that the notion of “equal protection under the law” doesn’t extend to issues like this.