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Over the past decade, Social Security-run surpluses went for debt reduction to make it appear the fund's not sustainable. In fact, since 1986, it produced $2.4 trillion more than it spent.
Much of the surplus came from increasing the payroll tax and indexing to inflation. Its share of total federal tax revenues rose from less than 30% to 44%. At the same time, corporate income tax amounts fell from around 20% to under 10%.
In other words, for a generation, Social Security revenues subsidized corporate handouts, tax cuts for the rich, and America's wars. Its surplus could be sustainable well into the future if government policies stopped draining it irresponsibly.
Moreover, if the full payroll tax is restored and annual $108,600 income cap lifted to make America's wealthy pay the same percentage cost as others, potential Social Security shortfalls could be eliminated for generations. If draining the trust fund also stopped, surpluses could be generated in perpetuity.
In addition, if capital gains were taxed like income, huge amounts would be raised for traditional Medicare, prescription drugs under Part D, Medicaid, and other social programs on the chopping block for big cuts or elimination.
Medicare would be just as sustainable with real healthcare reform under a universal single-payer system. By eliminating private insurer middlemen, costs would be drastically cut.
In its September 2007 report to Congress, the Congressional Research Service (CRS) compared 2004 US healthcare spending with other OECD (Organization for Economic Cooperation and Development) countries.
It found America spent $6,102 per person, well over double the $2,560 average for other OECD countries. Much of the difference comes from insurer administrative costs providing no care. Other OECD countries deliver better services overall at less than half what Americans spend.
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