Thursday, May 05, 2005

Turning Social Security to Welfare

President Bush has proposed reducing the growth in future social security benefits for all but the lowest income individuals. If enacted, this proposal, along with other measures designed to penalize high income workers, will push the social security system more to a welfare program. As it currently stands, high income workers pay 5.7 times the social security taxes as low income workers yet receive only 2.5 times the benefits. Thus even the current system is biased in favor of low income workers (source: )

In addition to President Bush’s penalty for high income workers, many in Congress have proposed eliminating the income cap on social security wages. Currently, income above roughly $90,000 is not subject to the social security tax—both the individual & employer contributions. Thus the mood among lawmakers is to force workers making more than $90,000 to pay the brunt of their overspending mischief. Not only will this ravage the retirement characteristics of the current system, it will slow economic growth in the economy as workers and employers send a higher share of their paychecks and profits to Washington in the form of higher taxes disguised as a down payment on a revamped retirement program. The only thing these proposals revamp is federal spending at the expense of the most productive members of the work force.

Ernie Goss

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