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Originally Posted by loquitur
Interesting set of principles, designed to retain progressivity while minimizing economic distortions and increase everyone's sense of civil obligation. The post is here.
I can almost predict who is going to say what about which parts of the package, but what the hell, let me toss this out and see what comes back. It struck me as notable mainly for focussing on what tax systems actually do rather than on what they are aimed at doing. I'm a homeowner who gives a fair amount of money to charity, so this plan will slam me, but I still think it's a pretty good concept. |
My objections are that housing valuations are distressed enough without removing the tax incentives in place to promote home buying.....and
2) Eliminate FICA and pay for Social Security and Medicare out of general revenue. It's time to stop pretending it's a pension system, when there are no assets in the "trust fund"
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http://www.signonsandiego.com/uniont...1n6socsec.html
Bush portrays Social Security fund as worthless paper
KNIGHT RIDDER NEWS SERVICE
April 6, 2005
WASHINGTON – Using a government filing cabinet as a prop, President Bush yesterday played to fears that the Social Security Trust Fund is little more than a stack of worthless IOUs.
But if the IOUs are worthless, so is the "full faith and credit" of the federal government, independent financial analysts said. The reality is a little more complicated than Bush acknowledged, and it goes to the heart of the debate over Social Security's future.
Experts say both sides in the debate over Social Security mischaracterize the trust fund's worth to make the case that the retirement system is essentially sound, as many Democrats contend, or that it's on the verge of crisis, which is Bush's message.
Bush visited the Bureau of Public Debt in Parkersburg, W.Va., yesterday to highlight the fact that there's no actual cash in the trust fund, even though Social Security has piled <h3>up a $1.7 trillion surplus</h3> since it was created in the late 1930s. Payroll taxes collected from workers have exceeded benefits paid to retirees every year since 1984.
Instead of socking the surplus away, the government spent it on other programs and promised to repay it later, with interest. The IOUs are in the form of special-issue Treasury bonds that are stored in an off-white, four-drawer filing cabinet in West Virginia.
"There is no trust fund, just IOUs that I saw firsthand, that future generations will pay," Bush said after inspecting the storage site. "Imagine – the retirement security for future generations is sitting in a filing cabinet."
The Social Security Administration has tried for years to downplay fears that the IOUs are an empty promise. The agency's Web site addresses the question, "Is there really a Social Security Trust Fund?"
The SSA's answer: "Yes."
Another SSA Web section address concerns that the bonds are of little value.
"Far from being 'worthless IOUs,' the investments held by the trust funds are backed by the full faith and credit of the U.S. Government. The government has always repaid Social Security, with interest," the agency says. "The special-issue securities are, therefore, just as safe as U.S. Savings Bonds or other financial instruments of the federal government." ....
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Under Bush's, "leadership", since the above article was written, exactly 3 years ago, the federal government has borrowed an addtional $500 billion from the SSA trust fund, and instead of the $1.7 trillion surplus....at the end of 2007, the surplus was <a href="http://www.ssa.gov/OACT/STATS/table4a3.html">$2.238 trillion</a>. SSA has been issued US Treasury bonds for that amount, in exchange for the government taking the actual $2.238 trillion and spending it. At the end of the year 2000, the government only owed the SSA trust fund $1.049 trillion.
7) Get rid of the estate tax, and tax the capital gains on whatever is sold.
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http://www.cbpp.org/3-16-05tax.htm
March 16, 2005
ESTATE TAX REFORM COULD RAISE MUCH-NEEDED REVENUE:
Some Reform Options With Low Tax Rates Raise Very Little Revenue
By Joel Friedman and Ruth Carlitz
Related Report:
Estate Tax "Compromise" May Differ Little From Permanent Repeal
View Additional Reports
Under current law, the estate tax will be repealed in 2010, and then will be reinstated in 2011. This strange sequence of events will occur because the tax cuts enacted in 2001, including those related to the estate tax, expire after 2010, restoring the law that was in effect prior to 2001. The Administration has called for making the repeal of the estate tax permanent after 2010. The Joint Committee on Taxation estimates that this would reduce revenues by $290 billion through 2015, including $72 billion in 2015 alone. But this estimate essentially captures only the cost of four additional years of estate tax repeal; the revenues losses associated with 10 more years of repeal — for the period 2012 through 2021 — are much higher, about $745 billion. And when the associated $225 billion in higher interest payments on the debt are taken into account, the total cost of repealing the estate tax for a decade would be nearly $1 trillion.....
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Before Mr. Bush took office, there was an estate tax, other taxes were at a higher level on higher incomes, and the national debt only increased $18 billion in the fiscal year ending 9/30/00. Spending was under control, and there were real reductions in non-defense related federal employment. Contrast that with the end of this fiscal year, on 9/30/08.....the national debt will have increased $700 billion, just in the current fiscal year....12 months....that's a rate of borrowing of nearly $60 billion per month.
What changed since 9/30/00? New federal government management, temporary elimnination of the estate tax, and income tax cuts that overwhelmingly benefited the wealthiest, and the expense of long, long, war.
War that comes with an expense that is arguably higher than the cost of the potential damage it claims to keep us from.
IMO this "reform" would accomplish nothing that returning tax levels back to their pre-2001 levels, and sound management of the federal government and it's budget would not accomplish, as it did before the Bush era.
Social Security is sound, it is privately financed....it is the federal government that is a fucking mess. The government borrowed all of the surplus from the privately funded SSA trust fund, and issued bonds to "cover" the debt it owed. It was the height of fiscal and moral irresponsibility to cut taxes, go to war, while advocating further, permanent tax cuts, and at the same time borrowing $1.3 trillion from the SSA trust fund to cover the gap created by increased spending and reduced taxation.