By Randolph Brandt
There is a Roadmap for America’s Future that actually will work.
Raise the Social Security, Medicare payroll tax and net earners’ tax by 1 percent.
That’s right, just 1 percent. And then make it applicable to everybody, including the nearly 20 percent of Americans who make more than $106,000 a year and, thus, are further exempted from paying anything more into the Social Security system at all.
While you (probably) and me (certainly) never got the chance to escape paying a payroll tax for Social Security on every single dollar we ever earned during our entire working lives, people who are rich escape paying that tax once they start earning more than you and I ever dreamed of earning in our entire lifetimes.
Now, for the median income wage earner in the United States, and the vast majority of their employers, that “tax increase” would amount to considerably less than a dollar a day.
But for, say, somebody who makes a million dollars a year, that means they’d pay somewhere around 25 dollars a day, about what they’d leave as a tip at dinner at some fancy restaurant for a waiter or waitress who’s still paying Social Security taxes on their meager earnings while the customer they’re serving has long since been exempted from the tax.
Remember, you and I paid that Social Security tax on every dollar we ever earned, for every hour, for every week’s pay, all our working lives.
I don’t think it’s too much to ask rich people to do the same thing that you and I have always done.
That’s not “soak the rich” or “class warfare.”
It’s just just.
And let’s not let the lobbyists exempt anybody from the pain of the extra 1 percent. Since we’re all in this together, let’s insist that everybody pay the same on all income, regardless of whether it’s $500 a week or $50,000 a week.
Are rich people so much better than everybody else that they should be exempted from taxes on their additional gross earnings because it’s assumed they’ll somehow use their money better than we use ours?
I don’t think so.
What I do think is that if everybody forked over a dollar a day (or $25 a day for people making $1 million a year), Social Security and Medicare would last, in complete solvency, as it stands, forever, which also seems like a pretty good idea.
Now, there are many charlatans out there who’ll cry wolf about Social Security and Medicare going bankrupt.
(A) That isn’t really true, even now; andBut let’s look at the charlatans’ proposed changes: Instead of guaranteed Social Security and Medicare at 65, people would instead have to work until they’re 70. That’s a pretty dismal prospect, since most people now retire at 62. So, the charlatans are just taking it for granted that you can and will work an extra eight years, by which time nearly half of your age cohort will already be dead, saving another huge bundle in costs. (Now, that’s what I call a government death panel!)
(B) Very minor changes in the Social Security system would avoid all that doom and gloom anyway.
And as for Medicare, it would be scrapped by the charlatans, in favor of an $11,000 voucher to pay for your medical costs every year for the rest of your retirement. That means instead of Medicare paying all your necessary medical costs, with an administrative fee of 3 percent, you’ll be forced into the private insurance market, where administrative costs now hover around 30 percent.
Do the math. That’s a huge increase in your administrative fees and a nearly 30 percent reduction in your medical care.
And wait until the next year, and the year after that, as medical-cost inflation continues to eat away at your care.
Let’s say that somehow, magically, the charlatans’ changes occurred today. That would mean you’d be working an extra eight years, and by the time you retired, your medical care voucher would be worth only 20 percent of what it was worth when you would have preferred to quit!
The 1 percent solution makes more sense, and doubly so if and when we insist that everybody – rich and poor – pay their own fair share.
Randolph D. Brandt is the retired editor of the Journal Times.