Funding Social Security from General Funds

John K. Taber jktaber at
Mon May 14 06:35:40 PDT 2001

Christopher Rhoades =?iso-8859-1?Q?D=FFkema?= <crdbronx at> wrote:

<< Thanks to Carrol for bringing this up again.

Carrol Cox wrote:

> For example, Christopher Rhoades Dÿkema recently wrote as follows:
> <<<
> Is there some technical objection to what, to me, seems an obviously
> appealing demand -- for straightforward abolition of the FICA and
> Medicare taxes, and financing of Social Security and MC out of income
> taxes?
> I understand that that would be a political departure. But a political
> departure, under the right circumstances would be a way to attract
> support to a progressive position. But is there some complexity of
> implementation that I don't get?
> Why haven't progressives put forward this seemingly obvious and clear
> demand, which would lead to a drastic reduction in most people's tax
> burden and a democratization of the tax structure? >>>
> John K. Taber replied as follows:
> <<<
> The objection is political, not technical. The fear is that the
> imperative for Social Security will lose moral force if it is funded
> directly out of general funds.
> There are people who want to end Social Security, and they work hard
> doing so. One impediment to their goal is the feeling of entitlement
> that paying FICA taxes gives taxpayers to the benefits. I read
> that Roosevelt was quite conscious of the point.
> Your point about the tax burden is well taken, it is regressive,
> however, the benefit computation compensates for the regression. I
> someplace that the regressive tax vs the progressive benefit
> comes out a wash.
> If we didn't have such a troglodyte political system, your suggestion
> would be quite reasonable.>>>
> Here we see another bit of evidence of how disastrous was the decision
> of the CPUSA in 1936 to back Roosevelt.

I don't think backing Roosevelt was so bad an idea, but I would point out that the passage of the Social Security Act did come from Roosevelt responding to pressure from below for social insurance.

Is it too adventurous to think of coherently forming an organized presence, in unions, other progressive mass groups, to advocate for funding Social Security out of general tax revenues? The reason I asked if there are technical, as opposed to purely power-political reasons why it would be difficult is because technical complications are what can make it harder to make a political point. Maybe the political point is one we should be making.

I want to think about this for some time. You should realize that I am dependent on Social Security, and have a stake in its survival.

Thus, I would fear anything that would divide those groups defending and supporting Social Security. So, I might oppose even a good idea out of caution.

Second. There is the opinion on this list that government is merely the executive arm of the ruling class. I think Doug has said that. So, why wouldn't the ruling class finally determine how general funds are allocated? As I see it, the ruling class has been forced to attack the special funding of Social Security with weird arguments (based on

"you can't trust the government" [but we can trust the

ruling class, eh?],

"the trust fund isn't there, it has been spent, gasp!"

"it's unfair to poor blacks, who earn little and die young

before they can enjoy their benefits" [watch out when the

Right starts bleeding sympathy for poor blacks]. Which makes me think Roosevelt did something unusually clever in structuring Social Security to survive in a hostile environment.

I want to think about this.

-- John K. Taber

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