A question
I have a question for the ages. Or for anyone reading this blog.
If someone were to base a candidacy for government office on a platform of implementing a tax on the poorest working people of society and giving the funds yielded by such a tax to some of the richest, nonworking people of society, would you vote for that candidate? Would you like that idea?
I don't.
Are you wondering how I came up with such an awful plan?
I didn't. The plan is the modern form of something Franklin Delano Roosevelt (President, United States of America), Frances Perkins (Secretary, Department of Labor), Henry Morgenthau, Jr. (Secretary, Department of the Treasury), and a host of other co-conspirators on the Committee on Economic Security and in both houses of Congress liked to call: "Social Security."
Are you asking how I can so cavalierly state that "Social Security" taxes the poorest people and moneys the richest?
Well, no one who works for anyone else is (legally) exempted from paying the 7.65% (actually 15.3%) FICA tax, no matter how poor that worker is, or how little he earns. And what he pays in his FICA tax goes straight to seasoned citzens without any limit on how wealthy the seasoned citizen can be and still receive benefits. Those who work for themselves also pay a FICA tax, except theirs is (openly) 15.3%. The self-employed who don't pay the FICA tax are those wealthy enough to afford lawyers to take advantage of tax loopholes (or, as in the case of John Edwards, are themselves wealthy lawyers).
Perhaps you're protesting that not all of those paying FICA are poor, neither are all those receiving SS benefits rich.
You're right that it would be folly to think everyone receiving SS benefits is rich, and even greater folly to think everyone paying FICA is poor, but the median net worth of those paying for "Social Security" is far below the median net worth of those receiving its benefits. Of course, these older folks have already payed off the mortgages on their homes, and with a smaller home and a lower standard of living, they could still have larger net worths than younger folks with a higher standard of living and a large income and a large mortgage bringing down their net worth. But even when you take home equity out of the equation, the over-65 crowd still trounces the under-55 crowd in net worth. According to the U.S. Census Bureau, which divided the age groups -- Under 35, 35-44, 45-54, 55-64, 65 and up -- each into quintiles by net worth, and also factored home equity out of the equation, each quintile of the over 65 crowd has a higher net worth without their home equity than the higher quintile of the under-35 crowd with their home equity. Also, all but the lowest of the over-65 quintiles beats the under-35 quintile two quintiles higher (i.e. the second poorest quintile of those over 65 have more non-home net assets than the second richest quintile of under-35-year-olds... and by more than 300%). In fact, the over-65 age group is far wealthier than the under-35 group who will be forced to pay them well into the future.
How about abolishing social security benefits? That way you wouldn't have the moral issue of using the government to coerce the poor to fork over their money to the rich. And everyone would be a little bit freer. And the poor would be a little (no, actually a lot) richer. And posterity would no longer be slaves of wealthy retirees.
SRS
P.S. To check my facts: go to http://www.census.gov/ and run a search on "net worth age" and click on the first link that appears. The pertinent information is on pp.9-12 or so, with a very handy graph on p.11. Also go to http://www.ssa.gov/ and select "Taxes and Social Security" from the pulldown menu labeled "Questions about" and click "Go." Then click question 7 "What is the Social Security tax rate?" This is, of course, if you don't have a pay stub you can look at; for instance, if you're not into that sort of thing.
Note: this blog entry used to be found at Backlog Bob's Blog. It no longer appears there.
If someone were to base a candidacy for government office on a platform of implementing a tax on the poorest working people of society and giving the funds yielded by such a tax to some of the richest, nonworking people of society, would you vote for that candidate? Would you like that idea?
I don't.
Are you wondering how I came up with such an awful plan?
I didn't. The plan is the modern form of something Franklin Delano Roosevelt (President, United States of America), Frances Perkins (Secretary, Department of Labor), Henry Morgenthau, Jr. (Secretary, Department of the Treasury), and a host of other co-conspirators on the Committee on Economic Security and in both houses of Congress liked to call: "Social Security."
Are you asking how I can so cavalierly state that "Social Security" taxes the poorest people and moneys the richest?
Well, no one who works for anyone else is (legally) exempted from paying the 7.65% (actually 15.3%) FICA tax, no matter how poor that worker is, or how little he earns. And what he pays in his FICA tax goes straight to seasoned citzens without any limit on how wealthy the seasoned citizen can be and still receive benefits. Those who work for themselves also pay a FICA tax, except theirs is (openly) 15.3%. The self-employed who don't pay the FICA tax are those wealthy enough to afford lawyers to take advantage of tax loopholes (or, as in the case of John Edwards, are themselves wealthy lawyers).
Perhaps you're protesting that not all of those paying FICA are poor, neither are all those receiving SS benefits rich.
You're right that it would be folly to think everyone receiving SS benefits is rich, and even greater folly to think everyone paying FICA is poor, but the median net worth of those paying for "Social Security" is far below the median net worth of those receiving its benefits. Of course, these older folks have already payed off the mortgages on their homes, and with a smaller home and a lower standard of living, they could still have larger net worths than younger folks with a higher standard of living and a large income and a large mortgage bringing down their net worth. But even when you take home equity out of the equation, the over-65 crowd still trounces the under-55 crowd in net worth. According to the U.S. Census Bureau, which divided the age groups -- Under 35, 35-44, 45-54, 55-64, 65 and up -- each into quintiles by net worth, and also factored home equity out of the equation, each quintile of the over 65 crowd has a higher net worth without their home equity than the higher quintile of the under-35 crowd with their home equity. Also, all but the lowest of the over-65 quintiles beats the under-35 quintile two quintiles higher (i.e. the second poorest quintile of those over 65 have more non-home net assets than the second richest quintile of under-35-year-olds... and by more than 300%). In fact, the over-65 age group is far wealthier than the under-35 group who will be forced to pay them well into the future.
How about abolishing social security benefits? That way you wouldn't have the moral issue of using the government to coerce the poor to fork over their money to the rich. And everyone would be a little bit freer. And the poor would be a little (no, actually a lot) richer. And posterity would no longer be slaves of wealthy retirees.
SRS
P.S. To check my facts: go to http://www.census.gov/ and run a search on "net worth age" and click on the first link that appears. The pertinent information is on pp.9-12 or so, with a very handy graph on p.11. Also go to http://www.ssa.gov/ and select "Taxes and Social Security" from the pulldown menu labeled "Questions about" and click "Go." Then click question 7 "What is the Social Security tax rate?" This is, of course, if you don't have a pay stub you can look at; for instance, if you're not into that sort of thing.
Note: this blog entry used to be found at Backlog Bob's Blog. It no longer appears there.
posted by weblogbob83 at 4:40 PM
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