Quote:The reality is that social security is an essential part of our economy.
In its current state, for how long? Social Security is a timebomb waiting to detonate. With continued advances in medicine, people will continue to live longer – and retire earlier – putting a constantly increasing strain on the system. It's already happening in Europe, a continent experiencing a slow (or static) birth rate. The decreasing number of young workers will find it harder and harder to fund the increasing number of seniors living on the dole.
Quote:You may say, "people should save and be responsible for their own retirement", but you know as well as I know that there are a good deal of people that aren't responsible enough to do that.
(hypothetical example)
OUWave, I've been pretty irresponsible in my budgeting lately. For instance: I went to the bar last night, blew a wad of money on drinks, cigarettes, and women. Then, to top it all off, this morning I bought a new fancy cell phone-camera combo because my friend has one. Now I don't have enough money to cover the mortgage that's due September 1st. I don’t really want to ask my friends and family for help, nor will I politely ask strangers for a few bucks to cover.
However, I
am going to insist that a government agent knocks on your door and demands you pay the rest of my mortgage for this month. If you refuse, you'll be arrested. All because I wasn't "responsible enough" to set my priorities straight when it comes to money. I mean, really. I can't be held responsible for my own actions. You all know how tempting wine, women, and electronic gizmos are! Besides, I just didn't pay attention to my education in high school, so I'm disadvantaged when it comes to budget decision-making. Thus, it’s not my fault. Since you saved up well and made better decisions, you have an
unfair advantage over me. So, pony up.
(/hypothetical example)
I don't mean to come across as snide or sarcastic. But I'm just illustrating how Robin Hood Economics oftentimes doesn't result in the warm, fuzzy stories you tend to believe. The above example is happening everyday, and there are millions of voters who would take my side in the above example in that it's "unfair" (read: your fault) that I didn't set aside money for the house payment.
Now, back to the issue at hand... Let the irresponsible stay within the social security system "as is", if they so desire. Why not have an opt-out clause for those who are responsible? In other words, to use a popular term championed by leftish types, let’s make social security "pro choice" and keep government's hands off your financial "body".
Here is a plan commonly circulated around by those wanting to reform the system:
Quote:-Individuals would be allowed to divert their half (6.2 percentage points) of the payroll tax to individually owned, privately invested accounts. Those who chose to do so would agree to forgo all future accrual of retirement benefits under the traditional Social Security system.
-The remaining 6.2 percentage points of payroll taxes would be used to pay transition costs and to fund disability and survivors' benefits.
-Workers who chose the individual account option would receive a "recognition bond" based on the accrued value of their lifetime-to-date benefits. Those bonds, redeemable at the worker's retirement, would be fully tradable in secondary markets.
Those who wished to remain in the traditional Social Security system would be free to do so, accepting a level of benefits payable with the current level of revenue.
Younger workers who chose the individual account option would receive benefits substantially higher than those that could be paid under traditional Social Security. At the same time, the plan would treat women and minorities more fairly and allow low-income workers to accumulate real wealth.
Most important, this proposal would reduce Americans' reliance on government and give individuals greater ownership of wealth, as well as responsibility for and control over their own lives. It would be a profound and significant increase in individual liberty.
As far as the national sales tax proposal, Boortz’ commentary is right on the mark. It’s also refreshing to see a columnist actually use numbers and examples to illustrate a potential idea, as opposed to shouting class-war slogans (with no backup research) merely for political gain and vote begging as politicians enjoy doing. Since the poor and middle class don’t buy boats, winter homes, luxury cars, designer clothes, Italian suits, sporting event tickets, time-share condos, TiVos, etc, as much as the wealthy do, it’s obvious the tax engine would still be fueled mostly by the rich. So there’s not a significant difference there…
But the key difference is that a national sales tax punishes you the more materialistic items you buy. Compare that to the IRS, which punishes success and advancement.
Quote:Also, I want to make sure I understand things better. Presumably this wouldn't affect local taxes. What about taxes on telephones or other services/utilities? Finally, what about "sin" taxes? I don't necessarily have a problem w/ all of those, but I'm wondering about them.
Actually, I do agree with Torch here. Very good questions.
Despite my interest and favor for a NST, I'd like to hear more before I give a full endorsement. Additionally, I wouldn't mind seeing some items (i.e. water, milk, vegetables, asprin...?) either exempt from the NST, or have a reduced tax. In fact, I would be curious if anyone will propose a hybrid... i.e. a significantly reduced income tax coupled with a modest NST.