From The Archives 4 - Social Security Turns 75 On August 14, 2010

From The Archives 4 – Social Security Turns 75 On August 14, 2010

Today, I am reprinting another article from the BEST Social Security Modernization Plan archives. This article was printed in the Berkshire Eagle on Friday, August 13, 2010. Keep in mind that at the time the BEST Mod Plan was known as The 2009 Progressive Social Security Modernization Plan.

Social Security Turns 75

On Saturday, August 14, Social Security turns Seventy Five. It has been a fantastically successful program serving all American citizens.

Recently there has been a growing debate about what should be done to “Save” Social Security. Some want to increase the retirement age while others want to cut benefits. Defenders of the program say small changes can make the program solvent and continue to be self funded as always for the next 75 years.

Social Security has always evolved with the times. However, in recent years the Social Security definition of WORK has fallen behind the times.

The federal government has always taxed “work” as a higher, more aggressive rate, than wealth. The well-to-do or rich may or may not pay taxes on their wealth while workers/employees pay BOTH income taxes and the Social Security payroll tax (which includes the Medicare tax) of 7.65% or 15.3% for the self employed.

Work is work, and wealth is wealth. Right? Maybe! When someone uses their wealth and actively works to aggressively increase it, it is no longer merely wealth; it IS Work.

The 2009 Progressive Social Security Modernization Plan proposes updating the legal definition of work to include those who make short term investments and increase their wealth. Thus, these individuals would be subject to paying the 7.65%/15.3% Social Security payroll tax in addition to any additional income taxes which might be owed on these wealth or earnings. Under the proposal, all rentals from real estate would also be subject to paying Social Security taxes.

These added tax revenues will serve to bolster Social Security’s solvency and obviate the need to raise the retirement age or lower benefits.

Properly and fairly taxing these two forms of earnings would also serve to stabilize the stock market and real estate prices by slowing wild speculation.

Since the Social Security payroll tax tends to be a regressive tax for low wage workers, the proposal also reduces the payroll tax for all those whose annual earnings are below the minimum wage level, refundable via income tax return. This would help young workers, students, fledgling businesses, and older retired workers.