Responses to "Values" questions

[Ken Diamond <kd@bmwinc.com>]

	"What is Social Security? Is it a pension plan? Is it
	disability insurance? What about benefits for the families
	of people who die prematurely?"

Social Security is complex, multifaceted program that does many
things. Its affect on an individual varies greatly depending on
when you were born, your marriage status, whether you have children
and your income among other things. But I believe the most useful
distinction to be made in understanding it is whether the taxes
and benefits of an individual have a sound actuarial relationship
or are they rather a function of social welfare decisions. An honest
debate requires making this distinction as transparent as possible.

	 "What are your expectations for yourself and for others?
	 Should Social Security be universal? Should coverage be
	 optional?"

Since much of what Social Security does is to meet the social
welfare needs of the society, I expect that everyone should be
required to participate. There is no good reason why we all shouldn't
be required to share in the burden of redistribution of the
progressive benefit system that give extremely generous benefits
to very low income people relative to the taxes they paid into the
system. Those now able to opt out, primarily state and local workers,
escape this burden and consequently get much higher pensions because
their contributions are not redistributed.

But state and local workers aren't the only ones able to shirk is
sharing the social welfare burden. Unlike welfare funded out of
general revenues, Social Security taxes are assessed only on wages
up to a certain point and not at all on the income of capital. Why
is meeting social welfare needs not something for which all of our
national income should be taxed? By making actuarial sound pension
and insurance benefits separate from those given for the cause of
social justice, we can fund the former with something more like
premiums and the later through a broader tax. Transparency also
enables us to honestly consider both the justification of a benefit
and it adequacy versus other choices we could make.