Social Security was begun as a national retirement plan. Workers paid into this plan a set percentage of their income, beginning at 1% in the old days, and received a payout when they reached retirement age. Employers matched this contribution, much like a traditional retirement plan. There is an upper limit of income that is taxed, and a corresponding upper limit on benefits. Although not exact, there is a correlation between what's paid in and the benefits paid out. This made Social Security fundamentally different from a welfare program. This resulted in almost unanimous public support. Some Democrats have said that Social Security taxes are regressive. This is total nonsense. Contributions are capped, but so are benefits. If you raise Social Security taxes for upper income groups but not benefits, it is not a retirement plan; it will then become simply a welfare or “spread the wealth” plan.
Obama says his income tax plan will lower taxes for 95% of Americans. There is just one problem with this, 40% of Americans already pay no income tax. Obama’s response to this is that these people pay Social Security tax. Well, that's not income tax, but a contribution to their retirement plan. So if he wins and implements his tax plan, for the first time in the history of Social Security, 40% of the people who will get retirement benefits will have paid nothing for them. Social Security will then loose all pretext of being a retirement plan, and will become a national welfare program.
This will cause Social Security to lose public support in a massive way. If your retirement benefits have no correlation to your retirement contributions, it is just a welfare program. 60% of Americans that will then pay all Social Security payroll taxes will no longer support Social Security politically. This will be the death knell for the Social Security system, as we know it today. This should alarm everyone, regardless of his or her politics. If you support McCain, get out and vote. If you support Obama, and he wins, urged him to scrap this disastrous tax plan. Leave Social Security contributions out of income tax plans. If you take some peoples income taxes to pay others Social Security taxes, Social Security will be destroyed forever.
Wednesday, October 22, 2008
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Obama isn't calling for a reduction in the payroll tax... not one cent. His tax plan doesn't undermine social security in any way at all. Everyone will continue to pay the payroll tax. Your claim is wildly off-base.
I have several posts on my blog about the tax plans.
SpecioiusRiches
htpp://speciousriches.wordpress.com
You post doesn't make any sense to me. Additionally, sources for your numbers are always helpful.
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