The Social Security Debate continued

Gar W. Lipow lipowg at sprintmail.com
Tue Aug 25 17:17:29 PDT 1998


I want to take issue with the political realism of one point you raised, and suggest an alternative -- basically to remove the nuttiness of Carrolls point and examine a sane version of the basic idea.

You said (and I am paraphrasing from memory -- the disadvantage of subscribing in digest form, you cannot easily find an old post) that the basis of the opposition to social security was it's progressivity and thus that proposals to increase that progressivity play into the hands of it's opponents.

If I am distorting your meaning please correct me -- but that does not seem a valid point. Ending progressivity may be a motive behind these forces -- it is not their means of winning popular support. Any time I run into some one who opposes social security, they usually claim "there won't be any for me when I retire".

I have never run into any working or middle class person who hates social security because it has a net redistributive effect. In fact making social security more progressive would indeed build popular support.

Now let's examine Carrolls proposal step by step

1) removing the wage cap and taxing all income not just wages

Not bad politically -- I can't see someone making 30,000 a year objecting to someone making 90,000 having their taxes raised especially if it ensures that social security will be there. And it is certainly would "save" social security

2) exempting the first 50,000 in income-- a lot of people pay more in social security than they do in income tax. Even a 25,000 dollar exemption would turn social security into a progressive tax. A very small part of the national income goes to people making 25,000 a year and under. Removing the wage cap and including non-wage income makes up for it and a lot more besides.

3) 75,000 guaranteed income -- plain nuts -- we could not do that under socialism, let alone capitalism. But why not raise and equalize the benefits, to the point where all recipients would get the same and 90% or 95% would receive more than under the current system. EPI contains some number crunching gurus. For that matter so does this list. Why not see how high you can get the benefits and make the numbers come out with the above new tax structure.

Now if you want to build a pro-social security movement you can do it on the basis of a proposal that would raise benefits and lower taxes for the vast majority, eliminate social security race and gender bias and put in a "stable" basis even given the privatizers assumptions. I think you might well get some popular support around a proposal like that. And I'll bet it would be the privatizers turn to say "wait a minute, there's no hurry, we have 75 years." Well?

(Sigh, and I'd promised myself that I'd just say no to posting for a while.)



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