Actually V, the changes that I suggested would probably not reduce the social security tax at all. The system cannot provide for those who are currently drawing. It is a very real perspective that the system will run out of money completely within the next decade or two. Like any business in trouble, you have two options here. Either you increase revenue by raising taxes or you decrease expenses by changing the standards as to who will qualify or you do some of both. My preference would be that we reduce those that receive benefits or change the benefit formula. You have mentioned before the possibility of a national sales tax or value added tax. That is one tax that I would vehemently oppose. The reason is that we have to deal with the intricies of sales tax law every day and I can tell you that it makes the income tax laws look simple. Let me give you a scenario that I could see happening with a national sales tax. Let's say they pass the law. Oh no, we can't let churches, the United Way, Red Cross, and other charities pay the tax so they would have an exemption. Oh no, we can't tax a tax so we would have to change the rules for things that have an excise tax imposed on them like tires, cars, firearms, and even bows and arrows. Oh no, we can't tax things that will become part of other products that will be taxed so we have to have an exemption for that. See where I'm going? The list gets so convoluted that it is again one of those things that sounds great in theory, but in practice it just doesn't work. Also, one other little factor that comes into play is that a national sales tax would automatically put all US made goods at a bigger disadvantage over foreign goods because of the additional tax burden. It is already hard to compete with countries with no unions, no environmental laws, and no safety standards. Add a sales tax to that mix and you won't find anything made in the US.
twinimini wrote: I wondered why you had been so generous in the numbers you suggested: the numbers I suggested most certainly would significantly reduce the amount of money required to fund social security retirement and with it, reduce the need for collecting such large sums of payroll taxes. Every retiree I personally know, who is now receiving social security retirement, either has an annual income, after taxes, of above $25,000; or, an adjusted net worth of more than $500,000 (including one half the appraised value of the family home). Under the plan I suggested, they would all stop receiving social security retirement, paid for by working people through their payroll taxes, until they reached a point in their lives when either their income had declined, or their net worth had declined. Making these relatively well off people fund their own retirement until they can't any longer should be the American way, but isn't. I know we've been taught to talk that way about it but, so far as I know, the "system" has no money at all, and depends entirely on cash flow- from working people, in the form of payroll taxes- to pay social security recipients their monthly checks. I'm also under the impression, and have been from years of reading about this stuff, that the sums collected exceed the sums required, with the difference being siphoned off to the general budget, where it is spent on everything else the federal government funds. Stop this practice, as I've said in an earlier post, and you'd have yet another possible reduction in payroll taxes. The expression "the system will run out of money" means, in my understanding, the there will be a point in time in which the payroll taxes collected will no longer exceed what is required to cover the payouts to social security beneficiaries, and additional taxes will be required, unless benefits are cut. I say, let's make those cuts now, and reduce payroll taxes, now! Disclosure statement: Under the rules I've proposed, I would lose eligibility to receive social security retirement benefits. I work and, as a self-employed person, pay a punishing 15.3% of the total of income derived from that work as "self-employment tax". I also pay 17% of the total of my income in income taxes, after all allowable deductions, exemptions, credits and exclusions are taken into consideration: in saying this, I'm not referring to marginal rates. ______________________ A NATIONAL SALES TAX twininmini wrote: Since you took the time to give us some of your reasons for opposing a national sales tax, I'd like to offer some of my thoughts, in response to your objections. Is there some complexity that I'm missing in a sales tax imposed only at retail, without exemptions of any kind? No, they won't. Under the plan I'm proposing, there would be no exemptions of any kind, for anybody. American citizens should have the choice whether to fund these organizations, not be forced to do so through tax subsidies to those who contribute to them, and higher taxes to those who don't. Easily done: we repeal all federal excise taxes. In its place would be the national sales tax, imposed on all sales at retail, without exception. I've repeatedly said the national sales tax would be imposed only at retail. The U.S. is not at a disadvantage. The U.S. is the world's largest exporter, with Germany second and Japan third. All of these countries have the things you mentioned as making it hard to compete, with Germany paying even higher wages, and giving more generous benefits- such as a minimum of forty paid days of annual leave- to its factory workers. We need to do as Germany does, stop whining about third world countries that can produce things more cheaply than we do, and concentrate on making products that are the envy of the world, and for which the world is ready to pay. China, perhaps one of those third world countries you're talking about, did not buy their ultra high speed rail system from Malaysia, they bought it from Siemens, in Germany, paying whatever it took to get the best. Chinese airlines have, for the most part, decided we build the best passenger planes, and most of their purchases of this high tech product has been from Boeing, in the U.S.A., not Airbus, again paying whatever it takes to buy the best. Opportunities abound, should we decide to stop whining about the rest, go all out to build the best, and compete with those who already do.
