Subject: RE: Values: Funding with Payroll Tax Immoral
Walter says that Social Security benefits should be funded through general revenues. Yet on
the "Fast Facts" page on this web site, go to the "Retirement Story" page and you'll find this:
"Sen. Huey Long, a Louisiana Democrat, was making the White House nervous with his slogan, "Every Man a King," and his populist program, "Share Our Wealth." He wanted to guarantee every family, so they could buy a radio, a car and a house. Long wanted federal laws to limit annual incomes to $1 million, inheritances to $5 million, and private fortunes to $50 million."
>From that attempt at redistribution from the wealthy came a program financed by taxes on the working man's wages only up to $3,000. Not only were the wealthy spared but politicians were rewarded because the current benefits received were based upon and scheme that shifted its costs into the future, the fruition of which is only now becoming apparent to a citizenry that doesn't understand such things well.
While Walter advocates general fund financing, what has occurred since 1983 is the reverse; payroll taxes supplanted general fund tax shortfalls. This continues despite the putative outrage politicians express for the practice. Those same politicians, with media co-operation, continue to call the inadequate future funding of the program a unified budget surplus. If they continue to refer to trust fund surpluses in a way that implies the propriety of spending them, you can assume they will. By the way, because the trust fund consists only of government indebtedness isn't the problem. As long as trust fund surpluses are mirrored by a corresponding reduction in debt held by the public, it represents real savings. It's like the difference between refinancing your home to pay off an existing mortgage or doing so to consume.
Walter also wants current benefits means tested. But observe the amount of genuflecting to seniors in reform proposals. I tried to get someone to champion the idea of the Social Security Administration sending beneficiaries Personal Earnings and Benefit Statements that spell out the constant dollar ratio of taxes paid to benefits received and likely to be received along with comparisons to future generations. Apparently even honest disclosure is too much too ask.
