From the WSJ: "The Obama Tax Hike"
Until recently, Sen. Barack Obama took a responsible position on Social Security, noting the urgency of reform and saying all options should be on the table.Surprisingly, it's Clinton (Bill) who evinced a true understanding at what "taxing the rich" by raising the wage cap means with regard to Social Security:
But having cornered himself among Democratic activists whose attitudes toward Social Security reform range from demagoguery to denial, Mr. Obama has recently veered sharply left. He now proposes to solve the looming Social Security shortfall exclusively with higher taxes.
President Bill Clinton considered lifting the wage ceiling modestly, but was skeptical of eliminating it outright. Doing so would "tremendously change the whole Social Security system . . . We should be very careful before we get out of the idea that this is something that we do together as a nation and there is at least some correlation between what we put in and what we get out," Mr. Clinton said in 1998. "You can say, well, they owe it to society. But these people also pay higher income taxes and the rates are still pretty progressive for people in very high rates."Exactly. If Social Security is to remain a "universal" program - and not another vehicle for wealth transfer - everybody needs to get a benefit proportional to the money put into the system. Otherwise, none dare call it universal.
3 comments:
Bill Clinton is correct in part. Social Security is not an entitlement to be paid out to anybody and not to be confused with disability payments. Social Security is a retirement income program for those who have no other retirement income.The part that Bill Clinton and many other Americans don't remember is the "last resort" nature of the program when it was founded, (which is the strongest argument against privatization!) Social Secuirty should not be part of your "retirement planning". Of couse some of it is Your Money but the idea today should be only to apply for it if you need it to live on. Then yours and boomers and X'ers and Y'ers retirement will be there in case you need it (just ask the people who worked at Enron how important that is).
So the idea today is that all of us have paid 7.5% or or and our companies also paid 7.5% of the first part of all salaries and commissions without our permission for over 40 years and now we should just say the hell with it, I don't need it. How about letting me have that 7.5% to see what I can do with it and let the company have the 7.5% to invest in producing more jobs and see how much better off we all are.
I was never even asked if I wanted to be a part of social security. It was just taken from me from the time I was 16 until the time I retired - and I hit the max all those years completely - and now you say it should not be a part of my "retirement planning"? If I wanted to donate to charity all that money, I would far more prefer to pick the charity I wanted to donate to than have the federal government pay all those people wages to manage it and pay all that overhead and all those consultants (just a note, my best friend has been a consultant at SSA for 8 years now on his second service and was there before for 5 years and that was at high wages and even higher contract charges).
Even worse is that the money was intended to go into a separate set of books and not be a part of the general federal revenues. That ended a long time ago (thank you LBJ) about the same time we got all these entitlements that are so much a part of the government cost of doing business. How about we reverse that one and cut the entitlements down to where they only pay the ones who actually need them. That makes a whole lot more sense that taking my money for over 40 years and then saying that it should be mine if I need it to live on. How dare you make all those decisions for me without my permission at all.
I just did some quick math to see just how much money I'm putting into accounts for retirement....social security and various 401K's . When you add all of the percentages up its very eye opening:
Social security (mine and employer)
15%
My IRA/401K 4%
Employer matching contribution 1%
Employer contribution to retirement plan 5%
That adds up to an amount equal to 25% of my salary going toward my retirement. I never realized I was being so responsible...uh....wait a minute. Jonstrau just said I should not be counting on that SS contribution as part of my retirement. Oh well...the feeling was good while it lasted.
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