Payroll taxes of workers, rather than general revenue taxes, support retiree income. Social Security determines the formula that shifts a portion of wage earners to retiree income. No matter how it is sliced, diced or construed, the present OASDI system is almost a National Pension Plan; the government raises funds by taxes and distributes these funds to give retirees a fixed income. The system only needs improvements; a more just retirement income for everyone and a certainty that the funds will always be there.
Social Security, modified to be a national pension plan, has the capability to provide a secure, stable and advantageous pension for retirees. Security results from the strength of the government system. Stability results from the guaranteed income. The added advantages: Government control allows quick adjustment of retirement benefits according to family status, cost of living and total income.
If the nation accepts the original objective of the Social Security system as "to pay benefits that provide a minimum degree of social security," and realizes the obligations to the retirement community with SS functioning as an income distribution plan, then SS becomes a national pension plan financed from the budget. A modified framework for the Social Security system uses the forecasted expenditure for Social Security as a budget item in a unified budget. One modification would be to have tax revenue support the budget item termed Social Security Benefits. The individual's W-2 tax form would become an accounting entry for determining future benefits.
Placing SS benefits in a unified budget, and making certain that general tax revenue finances the budget item, has several advantages:
(1) The present payroll taxes are regressive and unfairly affect lower incomes. Income taxes are progressive.
(2) The Social Security budget is mandatory. If it increases, other budget items can decrease in order to maintain taxes at the same level. Taxpayers will not complain if the Social security budget increases, as long as their total tax bill remains constant.
(3) Since Social Security is a major portion of the Federal budget, other budget items will be forced to compete with it and will have increased scrutiny. Wasteful and unnecessary budget items will be "under fire."
The SS system cannot escape the fact that its outlays are beginning to exceed its revenues.
How will its own budget be balanced?
As of now, the distributions of payments to retirees are well accepted. Continuing those distributions and refining them as economic changes occur are a matter of priority, and Social Security deserves high priority. After all, Social security payments are only a transfer of payments from children and grandchildren to their elders - a family affair. Instead of family wage earners directly supporting their parents, the wage earners will be indirectly supporting them. In other words, no matter the costs involved, as long as they are reliable and sensible, the public will be prepared to pay them.
The costs of the retirement program have a greater return than other government programs. As mentioned previously, its payments instantly recirculate in the economy and do not prevent the economy from moving forward. Defense programs often result in production of weapons of dubious benefit to the economic structure. Many government programs are wasteful, resulting in no advantageous to the American community. Foreign aid, either subsidizes purchase of American goods or moves money and resources out of the country.
Securing the National Pension Plan
The American constitution states that everyone is created equal, and America does everything to make its citizens unequal. Why is a Wall Street broker, who already earned huge sums during a lifetime and has sufficient funds for retirement, worth any more to the public than other workers who worked hard and received insufficient earnings to secure a satisfactory retirement? A National Pension Plan equalizes public benefits and enables private pension plans or other retirement income means to complement the public plan.
Regardless of previous income, aren't retired workers who worked equal years and hours and exceeded some minimum wage in each year entitled to near equal public pensions? This concept conjures a socialist vision of equalizing the wealth. No relation. Government operations - medical, defense, and schooling all provide equally for citizens. Earnings don't determine Medicare benefits. Retirement income deserves equal treatment, with qualified workers receiving a basic income that allows for acquiring the staples in life - food, housing and clothing. The Department of labor can determine what constitutes a basic income.
Preparing huge sums for a financial future clouds the future and skews the present. Â There is only one guarantee; the U.S. populace will fulfill an obligation to their retired parents and grandparents. The National Pension Plan makes Social Security more relevant, more simple, and more equitable. By making it a budget item, its solvency is resolved. Rather than treating social security as an adjunct to America's economy, it is preferable to integrate the needs of the retirement community into the needs of the entire society. A responsible society distributes resources and shares sacrifices.
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