* A figure of speech in which apparently contradictory terms appear in conjunction (e.g., Microsoft Works, unbiased opinion, and jumbo shrimp, just to name a few).
Social Security is one of those rare issues in which everybody has an interest. Either because we are currently receiving Social Security money, or because we hope to one day. A smaller percentage of us have an additional concern because we actually pay for it through the FICA tax on our paychecks.
Depending on your source, it is generally agreed that Social Security will run out of money in 15 to 18 years.
This problem is a can that that been kicked down the road by our favorite “establishment politicians” for many, many years.
We have some options to help fix Social Security, but we typically have people in office that don’t have the political courage to do what needs to be done.
John Stossel of Fox News agrees, and he says, “Social Security is running out of money. You may not believe that, but it’s a fact.”
“That FICA money taken from your paycheck was not saved for you in a “trust fund.” Politicians misled us. They spent every penny the moment it came in.”
This practice started the day our politician friends created the Social Security program.
So Social Security is going broke. This year, the program went into the red for the first time.
Stossel continues by saying, “Presidents routinely promise to fix this problem. George W. Bush said he’d ‘strengthen and save’ Social Security. Barack Obama said he’d ‘safeguard’ it, and Donald Trump said that he’ll ‘save’ it.”
Bush and Obama, of course, didn’t actually DO anything. President Trump on the other hand has been very good at keeping his promises. I’m betting that he will address the issue, but the odds of him getting the votes he needs in Congress will be pretty slim.
Oh, and if this wasn’t good enough news, it is estimated that Medicare will run out of money in just eight more years!
These “politicians” need to realize they are “elected representatives” first and politicians second. We the People need representatives who are looking out for us Americans, and representatives who are capable of making wise and prudent decisions. Believe me, I know I am asking a lot!
As an example of what we don’t need, Senator Elizabeth Warren (better known as Pocahontas), a democrat from Massachusetts, recently, and proudly announced, “Nearly every Democrat in the United States Senate has voted in favor of expanding Social Security!”
Again, we don’t need an “expansion” of Social Security. We need responsible leadership to insure Social Security remains a viable program for those who depend on it now and those hoping to get something back from all of the money they have put into the program. We are also aware that when every democrat agrees on something we’re in trouble and we better grab our wallets!
Here is what MrEricksonRules suggests we do to fix Social Security:
First, lift the payroll ceiling. Currently, no income is taxed that is over around $128,000. Why is that? There should be no income ceiling in my opinion.
Second, phase out of Social Security benefits for those who already have income over $75,000/year ($6,250/month) and/or have over $1 million dollars in assets, savings or investments. If this is the case you can live without an extra $2,000 a month. Of course this can always be re-evaluated if needed year by year.
Third, average in more working years. Social Security benefits are now based on an average of a worker’s 35 highest paid salaries with zeros averaged in if there are fewer than 35 years of covered wages. The averaging period should be increased to 39 years. The reasoning here is since we can retire at 62, we subtract 18 for our first 18 years, which leaves us with 44 years. We then subtract an additional 5 years to allow for schooling, which brings us to 39. That seems fair and reasonable doesn’t it?
Fourth, establish a 1% national sales tax that would go directly to help with the funding of the program. Each year increase the percentage of the national sales tax by 1%, BUT at the same time reducing the amount of income tax and FICA tax taken by the national sales tax revenue $ figure. Continue to do this year by year until the income tax and FICA tax has been eliminated and we are operating via this much fairer means of taxation.
Why is this fairer you ask?
It’s fairer because people will end up getting taxed on how much they spend, not by how much the supposedly earn. People who make a lot typically spend a lot, and therefore pay more tax. Those that don’t make a lot won’t pay much in taxes. That seems fair and reasonable doesn’t it?
Right now, there are millions of people who don’t get paid by employers who process their payroll as they should, or by those who pay cash. In these cases we get no taxes from what they are getting paid. The “consumption” tax solves this problem.
Fifth, allow younger workers to put a portion, not all, of their Social Security money into their own personal retirement accounts. If history shows anything, it is that private accounts would almost certainly pay retirees more than Social Security would ever pay. A huge side benefit here is the amount of investment money that would be funneled back into our economy. It is a win-win situation.
By doing these five things, we will save Social Security, while making the way we collect taxes fairer and more inclusive.
If you think my solution seems fair and reasonable, please forward these suggestions to your Representatives and Senators. The time has come for some real answers to some of these real problems.
NOTE: If you liked my blog today, please scroll down to the bottom of the page and click the “Follow” button. That’ll keep you up to date on my latest posts. Thank you, MrEricksonRules.