Everyone’s been worried about Social Security for a long time and how to make it “sustainable” in the long term. We could cut spending on other programs and try to make a go of it, or we could cut benefits, or just watch the whole thing collapse. Or…
Why should rich people get Social Security? When I ask people this, they reply that “We all pay into it, we should all get something out of it.” But we all pay taxes and we don’t all get food stamps, day care subsidies, Medicare or government kickbacks like some people do, do we? Why should we all get Social Security even if we all pay into it?
Any time I hear an argument for keeping Social Security, it involves helping poor elderly people, not sending checks to Robert Redford or Clint Eastwood.
So why should a rich person get Social Security? They’re rich. They don’t need it. Money is going from poor kids fresh out of college– and even teenagers working hard to buy their first car, or save up for college– straight into the bank accounts of Warren Buffett and Carl Icahn and that rich kid you knew in high school’s grandma down the road. In many cases, it’s going from a middle-class grandchild straight to their affluent grandma in Florida.
If you don’t think Social Security is in trouble, take a look at one of the Democrats’ plans for fixing it that failed in 2004-2005, because people don’t want to face up to reality:
I believed Social Security wasn’t in much trouble at all–just needed a few “tweaks”–until I looked at the tweaks the Two Peters were proposing. In addition to the benefit cuts outline above, Diamond and Orszag have the current 12.4 percent Social Security payroll tax rising to 15.4 percent in 2078 and continuing to rise “slowly over time thereafter.” Even if the Medicare tax is kept at its current 2.9 percent (a seeming impossibility) that means total FICA payroll taxes in excess of 18%. You want to try to finance universal health care on top of that? I don’t.
If Democrats want to know what a benefit cut that really zings the rich looks like, they should go to Australia, where (last time I checked) the top quarter of recipients gets no benefits at all. Zero. The bottom half gets full benefits. The people in between get in between. Now that’s a means test! Not coincidentally, after means-testing was introduced in the 1980s, Australia’s pension system cost a little more than half what ours costs, in terms of GDP.
Some people are dead-set against this idea. For instance, according to the “misguided demagogue” Saul Friedman, Max Skidmore wrote in his book, Securing America’s Future:
“Means-testing Social Security would change its nature and destroy the system. Universal coverage, regardless of need, is one of Social Security’s strong points. Millionaires do receive benefits, but they also pay into the system. Their benefits represent a smaller return on what they pay than do the benefits of lower-paid workers… Building in ‘need’ as a criterion to qualify for benefits would require the majority of Americans to contribute for a lifetime to a program from which they could draw no benefits.”
In other words, they don’t get back nearly what they paid in, but if we didn’t send checks to these millionaires, the system would be destroyed? How does that make any sense?
They’re already getting a bum deal by not getting back what they paid into the system, and they already pay far more in taxes above and beyond that for things they’ll never use– Medicare, state taxes for welfare and public transit and all those things that rich people have no need for. Is Medicare destroyed by not giving it to everyone? Is public transit destroyed because more people pay for it than use it? I don’t follow this argument.
Skidmore also wants to lift the income cutoff for paying Social Security taxes and dedicate death taxes to the Social Security fund… so he wants rich people to still get their “benefits,” but pay millions more dollars more into the system. How is that more fair to rich people than just telling them they won’t get benefits at all?
Social security pays rich people because it is a scam, and paying everyone enables the scam to be kept afloat.
If it was not a scam, it would have been designed just like food-stamps: with payouts to the poor, and coming out of general tax-funds. Instead, the intellectuals who designed it wanted people to think it was a scheme where their money would go a a fund, and they would get paid out from that fund.
Until the government talks about social security in honest terms, we’re not going to get anywhere. The SS contributions should be called income taxes, the employer’s share should be made visible, the government should stop pretending there is a fund somewhere, they should stop pretending to pay interest into this fictitious fund. Once there is honesty in terms and conversation, there may be a little more hope to figure out where to go next.
The government has no legitimate role providing retirement income and security. The system should be wound down. Still, we’ve got to bring honesty to the discussion first.
softwarenerd
October 20th, 2008
Everything you say is true.
I also believe everyone should be made to write out a monthly check paying their “bill” to the government just as they pay the cable company or any other bill. It would really hit home to them that they are giving the government so much of their wealth.
libertariangirl
October 22nd, 2008
[...] Libertarian Girl » Blog Archive » Throw Rich People Off the Social Security Rolls "Is Medicare destroyed by not giving it to everyone? Is public transit destroyed because more people pay for it than use it? I don’t follow this argument." (tags: policy politics socialsecurity class money) [...]
Being Amber Rhea » Blog Archive » links for 2008-10-25
October 25th, 2008
Frankly, I only made it through the first part of this and had to stop. This type of thinking is exactly why this country is headed downhill as we speak.
First, if given the choice, I guarantee most rich people would agree to not receive any SS ever if they did not have to pay into it. That is the only correct way your plan could take place.
You cannot force someone to pay into something because you see them as “rich and evil” and then tell them they will never see this money again. That is socialist, and simply morally wrong.
The law of unintended consequences escapes you I see. So you have established that SS is a failed system, which I agree with (although for clearly different reasons), then what do you think would happen if all the “evil rich” stopped paying into it because they will no longer be receiving anything out of it?
The system would collapse even more quickly than it already is and all those you are trying to help will be SOL.
Now, those you want to help no longer have that extra income from SS, what do you do?
I agree SS is bad, but I think it should simply be eliminated. Give everyone who payed into it their money back, stop collecting payments for it, and let it go away (along with all other socialist programs in this country).
Promote conservative (in the true definition of the word, no political affiliation) fiscal choices and promote saving and preparing for the future. Let people do this on their own through hard work, and you will have a much better society and a much better economy.
Then, uphold the 2nd ammendment for all of those who still choose to try to take from others and the problems will work themselves out. Much cheaper too than supporting a govt. program and all its related employees, buildings, etc.
Craig
March 9th, 2009
I don’t think any of these taxes should be imposed, but if they are they should at least be a transfer of wealth from the rich to the poor than from the poor to the wealthy (as SS often is).
You act as if this could never happen because rich people won’t allow this socialism. But the government certainly forces rich people to pay taxes every year that they will never receive back– income tax is only the best example, estate taxes sometimes the most devastating, the capital gains tax and others. I don’t see many people objecting to those taxes even though they obviously “discriminate” against rich people who will never get a check in the mail with that money back. Why would getting rid of Social Security for the rich be any different? The estate tax would be much more of a hard pill to swallow for an older person, and we have that going up to 55% in 2011.
I think getting rid of the system would be best in the long run, but I don’t see why the current system takes money out of my paycheck to pay to Warren Buffett and George Soros when I’m sure they’re doing fine anyway (yes, it’s true, Buffett has actually publicly stated he receives SS every month and always cashes the check).
libertariangirl
April 4th, 2009
You want to complain about not having enough money?! GET A BETTER EDUCATION! DO SOMETHING WITH YOUR LIFE!
Bob
May 18th, 2009
I never said I was complaining about myself, Bob. Perhaps I’m complaining on your behalf. As one example of how SS makes it more difficult for more people to take your advice, if young workers didn’t have to pay into Social Security they could afford an entire year of classes at a public university.
libertariangirl
June 8th, 2009
Craig wrote:
Then, uphold the 2nd ammendment for all of those who still choose to try to take from others and the problems will work themselves out. Much cheaper too than supporting a govt. program and all its related employees, buildings, etc.
***What a joke! How do you think rich people got rich? They got rich taking from others(greed). As an example, a rich man, or business owner, buys a product for a dollar (wholesale), and then turns around and sells it to the consumer for
$20.00(retail). After overhead ($5.00), the profit margin is enormous.
And we all pay to send his children to college, at the expense of our own children.
So, the rich man gets richer, “taking from others,” as you state. To my mind, this is tantamount to stealing, and an abomination in the eyes of God.
I think the wealthiest among us, who take social security checks, when they don’t need the money, or can afford to sustain themselves without it, should be ashamed of themselves.
Further, speaking on the subject of money, and profit, when is enough, enough?
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September 2nd, 2009
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david baer
December 18th, 2009