Wednesday, November 01, 2006

Social Security -- Back Again

OpinionJournal - Featured Article:
"Social Security was supposed to be a killer issue for Democrats this election year after they defeated President Bush's reform plans in 2005. But suddenly the tables are turning on several Democratic candidates because of their endorsement of the tax-increase agenda of the American Association of Retired Persons, or AARP.

The liberal entitlement lobby has asked candidates around the country to fill out a questionnaire asking, 'Will you support a balanced Social Security plan to continue the program's guaranteed benefits for future generations?' That may sound innocuous, but here's how AARP defines its balanced plan on its Web site near the above question: 'AARP believes that a bipartisan plan that balances additional contributions from high income workers with modest adjustments in future benefits can maintain guaranteed Social Security benefits for future generations.'

Those italics are ours, because in Washington 'additional contributions' means a tax increase. And by 'high income workers,' AARP can only mean anyone earning more than $94,200, which is the 2006 income level above which the 12.4% Social Security portion of the payroll tax no longer applies. Employers and workers each pay half of the payroll levy, and the income cap already rises each year with inflation."
Of course I written about social security here before. Increasing taxes for social security is, plain and simple, a bad idea. I think one of the most serious problems with social security is that it is a program built on dishonesty. The program is called an insurance program, but it is not an insurance program. It is often talked about as something akin to a government retirement or pension program, but it is not that either. Plain and simple, social security is a program that redistributes income from today's workers to those who are retired. Increasing taxes is a good way to continue to be dishonest about this program, and in the meantime increasing taxes means more money for government to spend today under the camouflage of "fixing social security." Increasing taxes today means the payroll tax will general more EXCESS tax revenue today, while at the same time committing future workers to greater tax payments (or budget reductions) in the future to "pay off" the Treasury securities "purchased" with the EXCESS payroll tax revenue. Increasing taxes continues the lie that is social security.

There is a second significant problem with social security, in my opinion. Social security is intergenerationally unjust. Increasing the social security payroll tax today also makes this intergenerational injustice more severe. Why? Because increasing the payroll tax today is not just a tax on today's workers, it is also a commitment to an increased tax on future workers. Many of those future workers aren't workers today, many aren't yet voters, and many haven't even been born yet. It is unjust, it seems to me, to have a government program that forces people to pay when they cannot even vote to say no we don't want that.

I don't want my son and my grandchildren to be paying for my golf when I retire, and I certainly don't want to vote for a program that forces my son and grandchildren, as well as your children and grandchildren, to pay for my golf when I retire. I want the social security program to really be fixed by changing it from an intergenerational income redistribution program to a program that truly can be called INSURANCE against the risk of living in retirement beyond a person's assets. Raising the payroll tax does not do this. It is a bad idea. It would continue the lie and the injustice.

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