Solving the Social Security non-crisis
I haven't really researched this much, but just from reading the news fairly thoroughly I'm under the impression that no one has proposed the following "solution" to the Social Security non-crisis.
Why not eliminate the income cap (now at $97,500, as I understand it) completely and simultaneously lower the tax rate so that the total tax proceeds are sufficient to fund the program under the "most likely" economic forecast scenario? Built in to the proposal should be an automatic adjustment to the tax rate each year (or every five years) based on the degree to which the proceeding ten year average performance exceeded or fell short of the forecast scenario. This would have the advantage of a) doing away with the excessively regressive nature of the tax itself, b) lowering the impact of the tax on the vast majority of Americans, and c) insuring the solvency of the system.
The only disadvantage of this that I can see is that it would dispel the illusion that this is an individual retirement annuity. It isn't now, and it certainly won't be in the future. Right now, this is a cross generational wealth transfer from the younger working stiffs to the retired seniors. Under my suggestion, it would become an wealth transfer from the wealthy to the middle and lower classes, which is, frankly, what it should be.
Why not eliminate the income cap (now at $97,500, as I understand it) completely and simultaneously lower the tax rate so that the total tax proceeds are sufficient to fund the program under the "most likely" economic forecast scenario? Built in to the proposal should be an automatic adjustment to the tax rate each year (or every five years) based on the degree to which the proceeding ten year average performance exceeded or fell short of the forecast scenario. This would have the advantage of a) doing away with the excessively regressive nature of the tax itself, b) lowering the impact of the tax on the vast majority of Americans, and c) insuring the solvency of the system.
The only disadvantage of this that I can see is that it would dispel the illusion that this is an individual retirement annuity. It isn't now, and it certainly won't be in the future. Right now, this is a cross generational wealth transfer from the younger working stiffs to the retired seniors. Under my suggestion, it would become an wealth transfer from the wealthy to the middle and lower classes, which is, frankly, what it should be.
posted by walldon | 9:42 AM
1 Comments:
When I was a young working stiff I transferred a measly portion of my wealth across the generations to the retired seniors of my day. Now I'm a senior, not retired, but being supported by younger working stiffs (plus in part the FICA tax on my own annual earnings). Why is this a bad thing? I don't and didn't resent it. It's a fine example of "what goes around comes around"... provided the Forces of Evil don't mess up a nice program with unnecessary and controversial fixes. How is Social Security as currently configured different from my paying school taxes when I have no kids in school (but I sure do have grandkids in school) or subsidizing my insurer's cost of caring for my sick contemporaries through my extraordinary (knock wood) good health? What goes around, in an equitable polity -- a commonwealth -- comes around.
support ross generationalthis is a c wealth transfer from the to the retired seniors
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