According to a recent Letter to the Editor in the Asbury Park Press, one Hurricane Sandy survivor and Social Security Disability Insurance (SSDI) benefits recipient makes a call to lift the income cap from the program funding tax.
As the author describes, he and his wife, both retired, had saved for years and created a sound financial plan. However, they never planned for anything like Hurricane Sandy. After having to spend most of their savings to rebuild their home, they would have not been able to survive without Social Security Disability Insurance benefits.
He describes SDDI as one of the most successful programs ever created by the United States government, but it is in trouble with respect to future spending cuts. He also claims anyone calling disability benefits an entitlement program is not telling the truth, as it is a program every worker pays into for the duration of their working life, so they can receive benefits should they ever become disabled. However, as this author was having his entire paycheck taxed, that is not true for other people who make more money.
There is a cap of $118,500, meaning everyone pays taxes on their first $118,500 of income toward Social Security Disability Insurance. Any money earned in addition to the cap is not subject to SSDI taxation. For most people who earn less than the cap, their entire wage is subject to taxation. For a person earning millions of dollars each year, only a very small portion of their income is subject to taxes to fund the SSDI program.
SOURCE: Massachusetts Social Security Disability Lawyers Blog – Read entire story here.
