Homestead mailing list

[Clansgian AT wmconnect.com]

In a message dated 2/11/2005 11:41:35 AM Eastern Standard Time, 
genegerue AT ruralize.com writes:


> Still, it is highly undesirable to raise taxes by the equivalent of 2.5 

> percent of GDP over the next several decades to pay Social Security 

> benefits. That would be equivalent to raising income taxes by 34 percent 

> this year. This is the real reason to reform Social Security today — not 

> because of looming bankruptcy, which will never be allowed to happen.

> 

> It may be politically useful to use apocalyptic rhetoric to sell a 

> controversial Social Security reform plan. But the real reason to reform 

> the program is to prevent a massive income-tax increase, not because 

> anyone’s benefits are threatened by inaction.

Not the best written,  Bartlett usually does much better.  But it does 
contain the essential point.  That is:  SS and Income Tax are essentiall just 
two 
different names for general taxation, some of which gets disbursed each year 
as 
SS benefits.  As is pointed out here, Income Tax, SS tax, and the [wink, nod, 
nudge] "trust fund" are all the same thing - taxes you are collecting that 
year to pay that year's expenses.  When you get ready to distribute funds to 
SS 
recipients in 2018 and there are no longer any  [wink, nod, nudge] "trust 
funds" to "draw" upon, the only options yu have are to cut benefits, raise 
taxes, 
or borrow money.  What happens in 2018 and beyond (and in fact any year) is 
the 
rate of taxtion THAT YEAR that the taxpayers are willing to tolerate in order 
to pay THAT YEAR's SS benefits.  It doesn't matter a fig what you call it.  

James