"If the scare-mongering over Social Security isn't a cause for rebellion, I don't know what would be

[Better Believe It]

Protecting Social Security: It's a Flat Tax, Stupid!
by Dave Lindorff
May 19, 2010

Look at the latest study out of the Senate Special Committee on Aging titled: "Social Security Modernization: Options to Address Solvency and Benefit Adequacy."

That just-released report, prepared by committee staff with the help of the nonpartisan Congressional Research Service, lays out the shortfall facing Social Security as America's Baby Boomer population begins to retire. It concludes that the alternative to raising the retirement age to 70 from the current 66, increasing the already onerous Social Security payroll tax by another 1% of income for both employees and employers, and reducing the annual cost-of-living adjustment for benefits by 1% (meaning retirees would fall further and further behind the cost of living each year), would simply be to eliminate the cap on the income that is subject to the Social Security tax.

Let me make that clear by putting it another way.

The committee report states that if the Social Security tax applied to all income instead of just the first $106,000, as things stand now, then Social Security would be completely funded at least through 2075. In fact, instead of a $5.3 trillion shortfall, there would be a 16% surplus! The report states that even if those wealthy folks who had their higher incomes taxed were able to collect higher benefits--as much as $6000 a month in current dollars--the added tax dollars raised would still ensure that the system would remain funded through 2075 and beyond.

Yet despite this obvious solution, we are continually warned in grave tones by the corporate media, by members of Congress, by President Obama and by Wall Street hucksters like Peter Peterson, that Social Security faces a crisis. We are continually told that benefits will have to be reduced, especially for current workers. We are continually told that the retirement age will have to be raised, so that people who work at strenuous, stressful, mind-numbing jobs will have to wait until they are 70 to slow down and spend time with their families.

Social Security .... is threatened not because of demographic changes, but because of corporate lobbyists and ideologues who want it killed. And these twisted, greedy people are desperately trying to keep the vast majority of American people who are depending upon Social Security for their old age from doing the logical thing, which is to tax the rich and make them and their employers pay the same flat rate that they pay on their income--15%--so that the system will be secure indefinitely.

If the shameless scare-mongering over Social Security isn't a cause for rebellion, for a wholesale "throw the bastards out" rejection of the rat's nest of corporate whores currently filling the halls of Congress, I don't know what would be.

Read the full article at:

http://www.commondreams.org/view/2010/05/19-7

A link to the Committee report is available here:

http://aging.senate.gov/letters/ssreport2010.pdf

[Autumn]

1. Yeah, but we can trust Obama, and

our Congress and Senate to fix this nasty entitlement problem. So we shouldn't get our panties in a wad.:rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl: :rofl:












:sarcasm:

[DURHAM D]

2. +10000000000000000000000000

[Better Believe It]

3. The Big Lie: Social Security payments are adding billions to government deficits. and therefore .

benefits must be cut.

That's false.

The Social Security Trust Fund has built up a 2.5 trillion dollar surplus over the past 25 years.

Those funds are invested in government bonds.

Just like other government bonds, the special-issue Treasurys pay interest and are backed by the full faith and credit of the U.S. government, which has never defaulted on its debt.

They can be cashed in and used by the Social Security Administration to cover any deficit.

[damntexdem]

4. For those sincerely concerned with Social Security, raising or eliminating the cap is the answer.

And instead of 2075, figure "forever," or at least for the foreseeable future. We Boomers will be putting the stresses on Social Security in the coming decades, but by 2075, we will have died off. True, every age cohort is living longer; but the big issue is the large Boomer cohort. Get past that, and Social Security is fine. As to the worsening of the dependency ratio more generally (those paying in to those receiving benefits), there is a fix: reform immigration so as to allow many more immigrants. If there are too many older folks relying on too few working younger folks, then expand the numbers of younger folks in the workforce.

Now, Medicare is a different matter; but let's save that for later.

[tonysam]

15. Or simply abolish "opt out" for state and local employees in about 14 or 15 states. n/t

[glitch]

5. K & R nt

[katmondoo]

6. Social Security is constantly being raided for wars

Started with LBJ. Medicare too. All that money coming in every month to the government is tempting. No one listened to Gore that this money should be in a lock box.

[Hannah Bell]

7. It's a flat tax with a progressive payout. Raising the cap = the top

10% making more than half of social security payments & not getting much in return = automatic creation of interest group supporting elimination of SS.

Besides which, SS taxes only LABOR, not CAPITAL.

The cry to "lift the cap" = trojan horse, & guarantee those who STOLE 30 years of extra SS payments will NEVER HAVE TO PAY THEM BACK.

[kelly1mm]

9. I agree. As a small business owner I pay almost no FICA tax as

I give myself a very small 'salary' and take the rest as member distributions. If I were to take more in salary, it would be taxed at 15.2% FICA, 25% Fed tax and 6% state tax - or about 49%. (I do get to deduct 1/2 of the FICA though). I think making all income subject to FICA tax would be even more politically risky though.

[Hannah Bell]

10. not suggesting that, either. suggesting that the top 1% pay back the 1 trillion plus

they "borrowed" from social security in the form of tax cuts before raising SS taxes so they can steal even more.

[kelly1mm]

11. If you are proposing to raise taxes on te top 1% going forward

in order to generate $1 Billion in new revenue then that would be fine. However, a "claw back" of the tax cuts since bush for those that were then in the top 1% would be an unconstitutional ex post facto law. Granted, there will be much, although not total overlap in the two populations (top 1% from 2002-2009 vs. top 1% from 2010- ????).

Interested in hearing why you do not (if that is the case) support levying FICA taxes on interest/dividends/rents?

PS - your posts are always thought provoking!

[Hannah Bell]

12. i'm suggesting rescinding the bush tax cuts on the top 1% that put 1 trillion in their pockets in 10

years. is a trillion enough for you? cause i'm in favor of piling more taxes on the thieving sob's too.

if you're proposing a guaranteed income funded out of progressive income taxes, fine, tax everyone.

if you're proposing levying taxes on capital to fund SS, forget it. just gives them more ammo to mess with it -- because now they're its funders.

My proposal =

1. Raise their income taxes to make them pay back the money they "borrowed".
2. Aside from that, keep SS as it is, except keep SS taxes on a pay-go basis, pass legislation that makes it ILLEGAL to have more than 2 years' outgo in the Trust Fund - so the sob's can't "borrow" 6-10 years worth of outgo -- & call it good.

[kelly1mm]

14. My point was the "them" you want to tax now going forward would not

necessarily be the same "them" that got the benefit of the bush 2002-2009 tax cuts. Lots of overlap but not entirely the same individuals in the top 1%. I suppose the confusion on my part was the term "borrowed" that was in your first post. Thanks for the clarification.

[Enthusiast]

13. I would vote for your suggestion.

Too bad the Obama Administration appears to be convinced that the other 'solution' is preferable. Why do they want to do this to those that can afford it the least? I do not understand their motive.

[Lugnut]

8. K&R

Bingo!

"The committee report states that if the Social Security tax applied to all income instead of just the first $106,000, as things stand now, then Social Security would be completely funded at least through 2075. In fact, instead of a $5.3 trillion shortfall, there would be a 16% surplus! The report states that even if those wealthy folks who had their higher incomes taxed were able to collect higher benefits--as much as $6000 a month in current dollars--the added tax dollars raised would still ensure that the system would remain funded through 2075 and beyond."