A Few BEST Social Security Modernization Plan Basics - An Introduction

 

A Few BEST Social Security Modernization Plan Basics - An Introduction

A Few BEST Social Security Modernization Plan Basics - An Introduction

The U.S. should adopt a comprehensive approach to ensure the solvency of our great nation’s most successful economic, domestic program, Social Security.

One of the provisions in the Balanced, Equitable, Solvent, Tested (BEST) Social Security Modernization (Mod) Plan was designed to look at the way modern America works and earns a living in the 21^ST century.

It calls for repealing sections 211 (1) (2) and (3) of the 1935 Social Security Act. These are the three sections of the Act which exclude income from real estate rentals, corporate dividends, and stock market capital gains from being subject to paying the Social Security taxes that every other hard working American is required to pay. (Long term gains will be excluded from the revised earnings definition.)

Requiring the recipients of these types of earned income to pay their fair share of taxes will help to insure that the hugely successful Social Security program will remain fully solvent for generations to come.

Exactly what will this Correction to the Social Security Act accomplish?

First, it will require payment of the 15.3% Social Security Self Employment/Medicare tax. (Employees pay a 7.65% Social Security/Medicare tax.) Those who have these types of currently excluded earnings typically have much longer working careers than those who perform hard physical labor. This also means more years of contributions to the Social Security/Medicare trust funds.

Second, once these earnings are properly defined as earned income, not only will they be subject to Social Security taxes, but they will, then be subject to paying federal income taxes at the rates that wages are presently taxed, and the 1.45% Medicare tax which is not subject to the current payroll tax cap. Currently a hedge fund manager may pay a total of only 15% tax on her/his earnings. However, once defined as wages/self employment, these earnings will be subject to 15.3% Social Security tax, the additional 1.45% Medicare tax on all earned income, plus the federal income tax rates of 25-35% that other hard working Americans have long been required to pay.

This is not a tax increase! These are currently existing taxes and tax rates. Why should stock market gamblers and insiders, who are working at earning a living, pay total taxes of 15% while other workers pay 32-50% tax rates? Let’s make taxation fair for all.

There are many more thoughtful and effective provisions contained in this plan, including making the payroll tax more progressive. These will be included if future posts and discussions on this site.

Solving The Covid 19 Epidemic

 Covid vaccines are experimental, using never-before employed ingredients, have not been fully tested, and they are only designed to prevent death or hospitalization from Covid. The vaxxed can still contract Covid and are can still spread Covid. Research indicates that the vaxxed may carry (and spread) a heavier covid load than those who are unvaccinated. Per The Guardian as of 12/21, 70.9% of Americans are fully vaccinated. Yet, there are more Covid cases in America than before the Covid vaccinations were rolled out. Now, the powers that be are saying a third, fourth, of fifth vaccination may be needed. Why? The vaccines do not work as publicly intended.  A wise man once said: “The definition of insanity is doing the same thing over and over again and hoping for a different result.”

 Vermont may have a 90% vaccination rate. Pre-roll out they had the lowest covid case rate. Now, they have one of the highest rates of Covid increase.

 The U.S. has no recommended early treatment protocols. Get sick, get hospitalized, and die from/on a ventilator. All there is is vaxx, vaxx, vaxx. There are doctors that have been successful in using early treatment protocols. There are other prevention strategies, too.

 Evidence exists that high levels of Vitamin D3, Vitamin C, and Quercetin, etc. have prophylactic effects and lessen Covid.

 The new strategy is to vaxx young children who are already at very rare risk of contracting or dying from covid.  Why put them at high risk of vaccine death or injury? Uunvaxxed children may have been our last hope for herd immunity to ending the outbreak.

 Per the federal government's own VAERS website, there have been many deaths and long lasting or permanent disabilities occurring after Covid vaccines. The government minimizes and ignores these and thinks nothing of 10-20,000 deaths. What if it is your spouse, sibling or child who dies from the vaccine?

 Are the numbers of ailments like heart disease or cancer have been increasing post experimental vaccinations?

 Covid is a virus. The virus can only live on a host.  The US vaccine strategy which lets all the vaxxed spread the virus without consequences is a dismally failed strategy.

 We can do better. We need a multi-faceted strategy to win this battle. Abandon the failed vaccine strategy and its failed leaders. Start anew using a better approach.

https://www.ucdavis.edu/health/covid-19/news/viral-loads-similar-between-vaccinated-and-unvaccinated-people

Mr. Trump’s Payroll Tax Cut? No Way! My Plan Does It Better!

Mr. Trump’s Payroll Tax Cut? No Way! My Plan Does It Better!

Current President Donald Trump wants a payroll tax cut as part of any next stimulus plan. His goal: destroy Social Security, much like his attempt to damage the U.S. Postal Service. These two programs are America’s best; Mr. Trump is not.

However, The B.E.S.T.* Social Security Modernization Plan does have provisions to make the payroll tax less regressive and more progressive. First, keep in mind that B.E.S.T.* is flexibly designed in that provisions can be tweaked in the spirit of the plan.

Here are a couple provisions:  1. Low wage earners who earn below a set annual amount will be able to file and annual tax return to get a percentage of their payroll tax refunded to them. However, their refund will come from general revenues not the Social Security Trust Fund.  2.  Earners at the top tier of the covered earning base will be required to pay a higher payroll tax rate only for their earnings that exceed a designated higher level. 

Keep in mind that B.E.S.T. * redefines short term capital gains, dividends, and rental income as wages so that they are subject to the payroll tax which will boost the Social Security Trust Fund coffers.

Of particular interest is making rental income subject to paying the Social Security payroll tax.  What this will accomplish is that it will be less lucrative to buy up strings of properties and homes, thus making housing more affordable for individual home buyers. Fewer slum lords?

Is Professor Warren A Plagiarist?

Professor Warren A Plagiarist?

As a former Social Security Administration Manager and Analyst for over thirty-three years, I, along with a former colleague, have devised a comprehensive, progressive Social Security solvency plan which I call the B.E.S.T. Social Security Modernization Plan.  B.E.S.T. stands for Balanced, Equitable, Solvent & Tested.  Details of the plan are located on a blog which I set up, starting on November 25, 2013, in lieu of a web page or book. Start with the earliest posts to read the plan’s details. Location: http://bestsocialsecuritymodplan.blogspot.com.

On two occasions, I have personally handed Elizabeth Warren folders containing key parts of what I call the BEST Mod Plan with bold typed covers asking to be able to present details of the plan to Elizabeth and/or her qualified staff. The first time was in North Adams, MA when she was running for the Senate; the second time was on Monday, February 1, 2016 in Springfield, MA at a rally in the Federal Building.

Despite my efforts including a written follow up for which I received a mere canned response, I have never heard from Professor/Senator Warren or her staff regarding my Social Security Plan.

Recently reading Senator Warren’s 2020 campaign web page section on her plans for Social Security, I was surprised to find that it included two key features/concepts of my plan: establishing a higher Social Security tax rate for higher wages above a certain level, and requiring certain net investment incomes to be subject to paying Social Security taxes  on this income like wages.

Other than my plan, I have never read any other Social Security solvency plans which included these two key progressive concepts. Given that I have repeatedly suggested adopting these concepts to Senator Warren twice leads me to believe my ideas and concepts could have or should have influenced her plan.

So, what is my point? There are two scenarios: Either Senator Warren and staff never read about my Social Security Plan despite my considerable efforts, or she and her staff ‘borrowed” from my plan without any acknowledgement whatsoever.  If scenario one is true, do we want someone to be president who totally ignores her constituents, even when they have reasonable credentials?  Scenario two is indicative of a lack of personal integrity in failing to at minimum contact me after I had twice submitted detailed Social Security Solvency plans to her and then using my ideas.

The ball is in Senator Warren’s court. Is she truly the best America has to offer?  Or not?

Bernie Sanders needs the BEST Social Security Modernization Plan

Bernie Sanders on Social Security:

https://www.youtube.com/watch?t=47&v=FAcv7g3O_iM

The BEST Social Security Modernization Plan is better, but at least Bernie is trying.

Please read all my posts on this blog for the BEST solution.

I sent my plan to Bernie, but it likely never got past his staffers.

Lifting the cap is not a good idea. I have addressed this in an earlier post.

http://bestsocialsecuritymodplan.blogspot.com/2013/11/scrapping-cap-is-crappy-idea.html

Financial Transfer Tax Is A Win For Wall Street – Adopt The BEST Social Security Mod Plan

Financial Transfer Tax Is A Win For Wall Street – Adopt The BEST Social Security Mod Plan

Transfer tax: http://www.commondreams.org/view/2014/02/19-9

Adopting a Wall Street “transfer tax” would amount to a big win for Wall Street. Why? A better “fix” to the problem would be to adopt The BEST Social Security Modernization Plan. The BEST Plan opts to treat all income that is “earned” equally and to require these earnings such as short term capital gains and rental income to pay the compulsory Social Security payroll tax or self employment tax like other forms of earned income are required to pay. Once these “earnings” are subject to paying the Social Security tax, they will also be additionally taxed, for purposes of federal income taxes, at the same rate that currently defined wages and self employment earnings are taxed, not some currently artificial 10 or 15% total amount. 

Why should earning money as a result of “working” as a result of financial investment as opposed to physical labor or using one’s mental capabilities or using a combination of physical and mental abilities be taxed any differently?

These financial mode earnings are currently excluded from paying Social Security taxes and the wage rate federal income taxes as a result of a glitch in the Social Security Act which gives them preferential treatment. Repealing Section 211 (a) 1, 2, and 3 of the Social Security Act will remove the glitch.

This is not even a new tax. It would result in requiring all Americans to pay taxes at the same progressive rates.

Compared to implementing The BEST Social Security Modernization Plan, installing a new, artificial transaction tax on Wall Street transactions would prevent having Social Security and Federal Income Taxes that treat all Americans fairly and equally.

To learn more details about The BEST Social Security Modernization Plan read all the posts starting in late November 2013 here: www.bestsocialsecuritymodplan.blogspot.com

The 1 Percent “Work” Harder? – Support For The BEST Social Security Mod Plan!

The 1 Percent “Work” Harder? – Support For The BEST Social Security Mod Plan!

 As recently reported by the Huffington Post, http://www.huffingtonpost.com/2014/02/05/sam-zell-1-percent_n_4733196.html Sam Zell defended recent comments by Tom Perkins and was quoted as saying, "The 1 percent work harder. The 1 percent are much bigger factors in all forms of our society."

In addition to proposing a three tier Social Security payroll tax rate, one of the basic tenets of the BEST Social Security Modernization Plan is eliminating the loophole found in Section 211 (a) 1, 2, & 3 of the Social Security Act which excepts rental income, dividends and capital gains from paying the otherwise compulsory Social Security payroll and self employment taxes.

So what did Mr. Zell say? He said the 1 percent “work,” and they “work harder.”

Certainly one can also make the case that many if not most of the 99 percent work very, equally hard, but I certainly agree that the 1 percent “work.”

Some workers work using their physical skills. Others work using their mental abilities. Others work using a combination of physical and mental skills. However, the 1 percent’s preferred mode of work is using their wealth to work and this work should be subject to paying the 6.2%/12.4% Social Security payroll/self-employment taxes and that once, this form of “Zell defined work” is defined as work, as wages, as self-employment income, this income should be subject to paying federal income taxes at the same tax rates that every working man pays their income taxes.

Thank you, Mr. Zell for justifying and buying into the BEST Social Security Modernization Plan.

Now, if we can only get Congress and President Obama to see the light and support the BEST Mod Plan.

It’s a no brainer! Or is that is the etiology of the problematic resistance?

Another Archival Summary of the BEST Social Security Mod Plan

Another Archival Summary of the BEST Social Security Mod Plan

For more details on the plan, please read my earlier posts!

Historical Background

Since Social Security’s inception in 1935, many changes have been made to the program. Some examples are adding disability benefits, the Supplemental Security Income program, Medicare, and mandating coverage for the self-employed and employees of non-profit organizations.

What It Does

·          Improves long range solvency of the Social Security Trust Funds.

·          Adds progressivity to Social Security taxation.

·          Welcomes new groups of workers into the Social Security program.

·          Serves to stabilize the economy.

·          Slows the inflation of real estate values.

·          Inspires new confidence in the Social Security program.

What It Does Not Do

·          It does not remove the Social Security wage/coverage cap.

·          It does not increase the retirement age.

·          It does not reduce the amount of retirement benefits.

How Does It Do It?

·          Lowers the payroll tax rate for workers/self-employed who earn at or below minimum wage levels from 7.65%-15.3% respectively to 4.65%-9.3%.

·          Increases the payroll tax for that portion of earnings which exceed the curent maximum covered base from 7.65%-15.3% to 9.65%-17.3%, using current methodology for cap increases, over a 10 year rolling period.

·          Adds three new categories of work which will be subject to Social Security coverage: Short term capital gains, all rentals from real estate, and working for state & local employers currently not covered by Social Security for the first five years of employment.

Who Does It Affect?

·          Having an equitable, progressive, solvent Social Security program affects everyone.

·          Those who work in real estate rentals and in the businesses of short term investing, and currently non-covered state and local employers and employees.

·          Higher wage earners who earn in excess of the current Social Security maximum.

·          Minimum wage earners, young workers starting to work, and retired part-time workers.

·          Start-up businesses whose profits are at minimum wage levels.

The Minimum Wage & The BEST Social Security Modernization Plan

The Minimum Wage & The BEST Social Security Modernization Plan

Should the minimum wage be raised? H*ll. Y*s! Saying that minimum wages should be kept inhumanly low because minimum wage jobs should be stepping jobs to higher ($.25 an hour more?) paying jobs is ridiculous.

Any job that exists is worth doing well, and it should be capable of instilling pride in doing it right and in the job for its workers.

Here is an example: On my monthly wild spending spree, I go to Taco Bell ™ and order the usual Fresco bean burrito and a Fresco chicken soft taco. What’s different today? It tastes really good. Why? For one, the food prep specialist (fps) gave me exactly what I ordered, and it tasted really good, today. Why? The fps made my order exactly at Taco Bell ™ intended, (I did not get someone else’s order, either!) no sour cream, no heavy cheese, and included the diced tomatoes and cilantro, etc.

On my way home, the grocery sack boy (I, proudly, was one, once!) didn’t put my loaf of bread under my six pack of Pabst ™ or next to my bars of soap. Good job!

All workers should be held accountable, but they should also be properly trained, and they should be motivated sufficiently to want to do a good job. Paying just and fair wages can help motivated workers.

Companies can benefit, too, by paying higher wages. Less job turnover and time spent training and supervising saves money. Competent employees help businesses grow and thrive.

Every worker should be able to work any job with dignity, provide for food clothing and shelter, and keep that job if that is what they want to do.

The last time the minimum wage permitted someone to do that was during the 60’s around the time of the Johnson administration.

Workers should not have to hold two or three jobs just to get by.

How would paying a living minimum wage (higher minimum wage) affect the BEST Social Security Modernization Plan?

An increase of the minimum wage from its current $7.25 per hour to $11.00 per hour would generate a 52% increase of payments into the Social Security trust fund from minimum wage workers and employers. Admittedly, minimum wage jobs represent a small percentage of the working force and wages and self-employment earnings, but there is no one thing, alone, which will make Social Security fully solvent and capable of expansion.

Every little bit helps! So, go for it!

Here is a Bureau of Labor Statistics table that shows the percentage of minimum wage workers by state:

Table 1. Employed wage and salary workers paid hourly rates with earnings at or below the prevailing Federal minimum wage by State, 2012 annual averages
State	Number of workers (in thousands)				Percent distribution				Percent of workers paid hourly rates
	Total paid hourly rates	At or below minimum wage			Total paid hourly rates	At or below minimum wage			At or below minimum wage
		Total(1)	At minimum wage	Below minimum wage		Total(1)	At minimum wage	Below minimum wage	Total (1)	At minimum wage	Below minimum wage
Total, 16 years & up	75,276	3,550	1,566	1,984	100.0	100.0	100.0	100.0	4.7	2.1	2.6
Alabama	1,083	65	31	34	1.4	1.8	2.0	1.7	6.0	2.9	3.1
Alaska	194	2	1	1	0.3	0.1	0.1	0.1	1.0	0.5	0.5
Arizona	1,472	68	17	51	2.0	1.9	1.1	2.6	4.6	1.2	3.5
Arkansas	725	50	33	17	1.0	1.4	2.1	0.9	6.9	4.6	2.3
California	8,805	127	45	82	11.7	3.6	2.9	4.1	1.4	0.5	0.9
Colorado	1,234	42	7	35	1.6	1.2	0.4	1.8	3.4	0.6	2.8
Connecticut	853	23	2	21	1.1	0.6	0.1	1.1	2.7	0.2	2.5
Delaware	219	11	4	7	0.3	0.3	0.3	0.4	5.0	1.8	3.2
District of Columbia	103	5	1	4	0.1	0.1	0.1	0.2	4.9	1.0	3.9
Florida	4,164	214	49	165	5.5	6.0	3.1	8.3	5.1	1.2	4.0
Georgia	2,114	136	60	76	2.8	3.8	3.8	3.8	6.4	2.8	3.6
Hawaii	331	14	7	7	0.4	0.4	0.4	0.4	4.2	2.1	2.1
Idaho	404	31	16	15	0.5	0.9	1.0	0.8	7.7	4.0	3.7
Illinois	3,065	85	21	64	4.1	2.4	1.3	3.2	2.8	0.7	2.1
Indiana	1,785	93	50	43	2.4	2.6	3.2	2.2	5.2	2.8	2.4
Iowa	920	46	25	21	1.2	1.3	1.6	1.1	5.0	2.7	2.3
Kansas	780	44	29	15	1.0	1.2	1.9	0.8	5.6	3.7	1.9
Kentucky	1,147	60	30	30	1.5	1.7	1.9	1.5	5.2	2.6	2.6
Louisiana	1,043	74	35	39	1.4	2.1	2.2	2.0	7.1	3.4	3.7
Maine	378	11	3	8	0.5	0.3	0.2	0.4	2.9	0.8	2.1
Maryland	1,327	67	25	42	1.8	1.9	1.6	2.1	5.0	1.9	3.2
Massachusetts	1,567	62	17	45	2.1	1.7	1.1	2.3	4.0	1.1	2.9
Michigan	2,449	90	19	71	3.3	2.5	1.2	3.6	3.7	0.8	2.9
Minnesota	1,522	60	35	25	2.0	1.7	2.2	1.3	3.9	2.3	1.6
Mississippi	700	45	21	24	0.9	1.3	1.3	1.2	6.4	3.0	3.4
Missouri	1,538	97	49	48	2.0	2.7	3.1	2.4	6.3	3.2	3.1
Montana	274	4	1	3	0.4	0.1	0.1	0.2	1.5	0.4	1.1
Nebraska	561	32	17	15	0.7	0.9	1.1	0.8	5.7	3.0	2.7
Nevada	730	23	9	14	1.0	0.6	0.6	0.7	3.2	1.2	1.9
New Hampshire	370	13	5	8	0.5	0.4	0.3	0.4	3.5	1.4	2.2
New Jersey	1,777	103	49	54	2.4	2.9	3.1	2.7	5.8	2.8	3.0
New Mexico	488	23	6	17	0.6	0.6	0.4	0.9	4.7	1.2	3.5
New York	4,075	224	113	111	5.4	6.3	7.2	5.6	5.5	2.8	2.7
North Carolina	2,206	137	74	63	2.9	3.9	4.7	3.2	6.2	3.4	2.9
North Dakota	205	7	3	4	0.3	0.2	0.2	0.2	3.4	1.5	2.0
Ohio	3,277	147	31	116	4.4	4.1	2.0	5.8	4.5	0.9	3.5
Oklahoma	890	64	29	35	1.2	1.8	1.9	1.8	7.2	3.3	3.9
Oregon	982	11	3	8	1.3	0.3	0.2	0.4	1.1	0.3	0.8
Pennsylvania	3,450	195	87	108	4.6	5.5	5.6	5.4	5.7	2.5	3.1
Rhode Island	298	10	2	8	0.4	0.3	0.1	0.4	3.4	0.7	2.7
South Carolina	1,084	59	28	31	1.4	1.7	1.8	1.6	5.4	2.6	2.9
South Dakota	253	12	6	6	0.3	0.3	0.4	0.3	4.7	2.4	2.4
Tennessee	1,554	86	46	40	2.1	2.4	2.9	2.0	5.5	3.0	2.6
Texas	6,060	452	282	170	8.1	12.7	18.0	8.6	7.5	4.7	2.8
Utah	758	37	21	16	1.0	1.0	1.3	0.8	4.9	2.8	2.1
Vermont	184	5	1	4	0.2	0.1	0.1	0.2	2.7	0.5	2.2
Virginia	1,803	123	48	75	2.4	3.5	3.1	3.8	6.8	2.7	4.2
Washington	1,705	29	11	18	2.3	0.8	0.7	0.9	1.7	0.6	1.1
West Virginia	453	26	13	13	0.6	0.7	0.8	0.7	5.7	2.9	2.9
Wisconsin	1,745	94	41	53	2.3	2.6	2.6	2.7	5.4	2.3	3.0
Wyoming	173	9	4	5	0.2	0.3	0.3	0.3	5.2	2.3	2.9
(1) Data may not add to totals due to rounding.
NOTE: Data exclude all self-employed persons whether or not their businesses are incorporated. Users are reminded that these data are based on a sample and therefore are subject to sampling error; the degree of error may be quite large for less populous States. It is not possible to determine clearly whether workers surveyed in the CPS are actually covered by the Fair Labor Standards Act (FLSA) or by individual State minimum wage laws. Thus, some workers reported as earning the prevailing Federal minimum wage may not in fact be covered by Federal or State minimum wage laws. Also, there are a number of States that have minimum wages that exceed the Federal minimum wage. At the same time, the presence of a sizable number of workers with wages below the prevailing Federal minimum wage does not necessarily indicate violations of the FLSA or applicable State laws, because there are numerous exclusions and exemptions to these minimum wage statutes. Hourly earnings do not include overtime pay, commissions, or tips.