Monday, August 16, 2010

Social Security

I am amazed and appalled that conservatives continue to get mileage out of the idea that we need to change the way Social Security is funded, either by partially privatizing it or by extending the retirement age and minimizing benefits. Social Security is one of the triumphs of the modern, industrial state. As Paul Krugman points out today in the New York Times, it funds itself quite efficiently and is in no danger, either immediately or in the foreseeable future, of running out of money.

So why the hysteria? Krugman says it's all about ideology, that conservatives simply can't countenance the idea that this government program works so well and will consequently have to continue to be funded at a fairly high rate in perpetuity. Somehow, I can't believe this is the whole story. There is a missing piece, something else that the right can't stand that isn't being talked about.

Let me suggest that what they are really afraid of is the thing that probably should, in fact, be done to ensure Social Security's long-term stability, but which they have been very successful at keeping out of the conversation altogether. It is simply this. Tax everyone at a 6.2% rate, regardless of income. Right now, Social Security taxes only come out of the first $106,800 of income. After that, for those making more than $106,800, there is no tax at all. Which means, of course, that this is one of the most regressive of taxes in which those most able to pay actually give a surprisingly small percentage of their income. Someone, for instance, bringing in $500,000 a year, is paying a net percentage of just a little over 1%. Even someone making, say, $200,000, is paying only about 3% of income. This is ridiculous, in any case, but especially when so much hot air is being expended about the Social Security crisis when it would be so easy to make this change, with little or no discomfort for those making more than $106,800.

So why isn't this discussed or seriously considered? I can think of only one reason. Greed. The rich control the conversation about taxes and about funding government programs. They have kept the rest of us poor schmoes in the dark. We should be outraged about this. There should be marches in the street. But because of the hegemony that the privileged hold over the poor and middle classes, hardly a word is breathed about this. It is a reminder to me that the rich had better watch out. A revolution is coming and unless more is done to support the needs of the less well off, there will eventually be a backlash like nothing this country has ever seen.

In the meantime, think of the good that can be done to ensure that Social Security is paid out to all those who both need it and deserve it. That's virtually everyone. A simple and relatively painless change in the way this program is funded would absolutely ensure its long-term solvency. We just have to muster the will to make it happen.

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