Fixing Social Security

The Ivory Madonna has been doing a lot of reading on Social Security. And she's come to some conclusions, all of which seem compellingly obvious.

(Fair disclosure here: The Ivory Madonna is 46 years old. Last year she earned a gross salaray of just a hair under $50,000.)

#1: There is no crisis in Social Security. Sure, the system is going to run into problems, and probably within the Ivory Madonna's lifetime -- but there is no crisis that demands immediate attention.

#2: The looming problems with Social Security (as opposed to Medicare) are minor, and can be adequately addressed by two very simple changes:

(a) Eliminate the ceiling on earnings subject to payroll tax. Currently, payroll tax is applied only to the first $90,000 of earnings. That limit should be abolished. (If not abolished altogether, it should certainly be raised substantially.)

(b) Phase in means-testing for retirement benefits. Retirees with high incomes need fewer benefits than those with low incomes. Benefits should shrink (and eventually disappear) as income rises.

Some argue that both these changes will provide "dis-incentives" for people to earn higher salaries, thus destroying the economy. Yeah, right. You can see the reasoning. A person making $90,000 a year ($83,133 after payroll taxes) is going to say, "No, I don't think I'll go for that position paying $100,000...because with payroll taxes, it's only an increase of $9,237 instead of $10,000."

The real argument against both these changes, coming from the rich, is "we don't wanna pay more or receive less."

The Ivory Madonna's mother had the answer to that argument:

Times are tough. Life isn't fair. Get over it.

-M

---

The Ivory Madonna's story is told in Dance for the Ivory Madonna by Don Sakers.