Monday, April 17, 2006
Social Security
One part of the problem in the big picture is Social Security. Like many of our problems it is projected to get worst in the near future. This is a synopsis on the reforms that are need to Social Security system to bring it in balance for the purpose it was established. There will be many other needed changes to balance and correct other parts of the system that will not be addressed in this article. The perception and impact of Social Security varies greatly among people. As an example the people with lower incomes pay more into Social Security than Federal or State Income Tax. The people who earn the most amount of money pay more income tax than Social Security. The bottom line is the baseball player who makes 90,000 dollars per game pays the same amount of Social Security withholding as the baseball player who makes 90,000 a year. Brining the Social Security system into balance fiscally and socially to meet the needs of society should be the goal. Radical changes will be needed to bring this about and this is where the disagreements will arise. The following is a brief outline to a plan to overhaul the current formula to Social Security.
The first 10,000 dollars of personal income will be free of any Social Security withholdings. The personal income from 10,000 to 30,000 will contribute to the Social Security system with the option of the traditional plan or the private account plan. The Social Security Private plan will be a fifty-fifty split between the private account contribution and the Social Security system. The personal income from 30,000 and up of will pay the same rate of withholding into the Social Security system. This will create two basic plans the Social Security Basic and Social Security Private limiting the financial exposure to the Social Security system as well as to the people.
The private accounts of the Social Security Private will be handled the banks and brokerage firms with the fees for service and the type of investment accounts being regulated by the government. The formula for what the recipient receives between the Social Security Basic and Private Plans will have a stronger impact on people in the lower income range. People in the higher income range have their own private investment accounts depending on Social Security less for their retirement. If the Social Security system is suppose to be financial safety net for those who are less fortunate. Then there should be little relationship between what one pays into and receives from the Social Security system. There will be a ceiling establish for how much one can receive from Social Security in benefits. The benefits paid out in the private sector of our system favor the wealthy and the benefits paid out in the Social Security system should favor the people in the lower income brackets.
The first 10,000 dollars of personal income will be free of any Social Security withholdings. The personal income from 10,000 to 30,000 will contribute to the Social Security system with the option of the traditional plan or the private account plan. The Social Security Private plan will be a fifty-fifty split between the private account contribution and the Social Security system. The personal income from 30,000 and up of will pay the same rate of withholding into the Social Security system. This will create two basic plans the Social Security Basic and Social Security Private limiting the financial exposure to the Social Security system as well as to the people.
The private accounts of the Social Security Private will be handled the banks and brokerage firms with the fees for service and the type of investment accounts being regulated by the government. The formula for what the recipient receives between the Social Security Basic and Private Plans will have a stronger impact on people in the lower income range. People in the higher income range have their own private investment accounts depending on Social Security less for their retirement. If the Social Security system is suppose to be financial safety net for those who are less fortunate. Then there should be little relationship between what one pays into and receives from the Social Security system. There will be a ceiling establish for how much one can receive from Social Security in benefits. The benefits paid out in the private sector of our system favor the wealthy and the benefits paid out in the Social Security system should favor the people in the lower income brackets.
