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Old 02-07-2005, 10:46 PM   #12 (permalink)
pan6467
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Location: Mansfield, Ohio USA
Quote:
Originally Posted by KMA-628
The problem with this is the same problem we are having today.

If you give the gov't money, they will spend it, with complete disregard to paying it back (republicans and democrats alike). All that would accomplish is substituting a failed policy with another one that is set-up for failure.

What you are offering is very similar to the trust fund set up to protect Social Security. The only problem is that nobody protected the trust fund.


True, but you are dealing with a real commodity with a real value (i.e. the T-Bill) which is insured by the government and while they can and do include monies from T-Bills in the budget, they also must pay off those notes when the maturity arises. Same as what a bank does with CDs.

Quote:
Originally Posted by KMA-628
I can appreciate the idea, and would be inclined to consider it, but you still leave the money in the hands of the people who shouldn't have it instead of the people who should.

Now, if the money wasn't available for the gov't's use and could not be touched, that would be a different story all together.
You could figure out a way that the worker would choose a bank into which to place the monies, however, banks are bought, sold traded and the monies would quite possibly have to be transferred from bank to bank if the worker was to move. And private banks would probably want to charge a fee.

Again, my proposal while not perfect allows the government to have income, but at an expense and regulated. There would be no fees and short of the government going totally broke the T-Bills would be paid on time.

Yes, it is what SS should have been. And the government had done a decent job of it. The problem is as described above, people started using it as their sole income because companies raided pension plans and so on. What the government was short sighted on was inflation, longer lives and fewer workers paying for more retirees. Also, companies cutting back on pay and benefits has hurt. Less pay, less tax money paid into the system, even if there are more workers.

And yes, you are very right, though they tried the government never truly stayed out of SS's accounts and kept borrowing.


Quote:
Originally Posted by KMA-628
I do, however, have a question about your idea:

Aren't you proposing a system that is based on a 1:1 ratio?

If the tax rate for a ratio of roughly 3:1 is 12.4%, what would be your tax rate to achiece the goal of 1:1?
Yes, it is very much a 1:1 ratio for my retirement plan, because it would be totally dependant on the worker to pay the principle of the T-Bill off. The tax rate would be whatever the principle needed would be. The worker would have the choice to pay less at first and more as he makes more, or maintain a steady rate and pay off the balance sooner.

Say the T-Bill is a million, now the gov't. and the Fed. decide that over the 70 years till maturity, the principle is $50,000. Thus the worker must pay from start of work till retirement (say 50 years) the sum of $50,000. Now, the worker could have $1,000 a year deducted from his pay OR the worker can opt to have $100 the first few years deducted and then build up, or the worker can opt to try to pay as much as possible at anytime, thus paying off the principle fast and going then into an IRA, 401K or nowhere but himself whatever the worker decides.

Plus, that million paid say in increments of $50,000 a year for 20 years should truly help retirees help the economy and be an influence in it. Also, as ghoulish as it may sound, if a retiree dies before the whole is paid, then the gov't keeps whatever is owed minus any principle left.

This money would be an income tax deduction also. Once the principle is paid, if the worker chooses to keep a retirement he can opt to equal the highest payment and maintain a deduction. However, if the worker chooses no retirement then tthere is no deduction.

What about programs such as disability, SSI and whatever that depends on SS money, now? We still maintain these programs, however since we have decreased the companies burdens of paying into SS we tax them a much smaller percentage to help these. So if a company is matching 12.5% of a workers pay now... the corporate tax rate becomes a min 5% a massive savings of 7.5% compared to today.

Companies expanding and showing increases in employment and wages would get the very minimal tax burden because they are helping to keep the economy growing. Those companies that take the savings and give it to their upper managers and choose to remain stagnant and not increase employment or wages would be taxed the maximum.

It's a simple and easy plan, where everyone is responsible for themselves. We can lessen the burden of the worker and corporation while maintaining a social structure to help the disabled.

The only truly huge problem I can see with this is how and when would you change programs. That is the true stake in the heart of any restructuring to the beaureacratic beast, we now have in SS.
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Last edited by pan6467; 02-07-2005 at 10:53 PM..
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