TPMtv: McCain's Absolute Disgrace

Josh, I am NOT a McCain supporter by ANY stretch of the imagination, but he has, unwittingly perhaps, identified a problem that Progressives ought to look at.

As a pay-as-you-go program, SS benefits ARE paid from the income derived from current workers.  [I'm at least glad to see he's not trying to sell that old chestnut that each worker's SS taxes are "put in his/her own private account, to be paid to him/her later."]

There are two problems with this, neither of which requires "privatization" to fix.

First, the tax rate [for social security] is the same, whatever the income level [up to the maximum].  This means that for lower income workers, who are predominantly young, new-to-the-workforce ones, the tax is incredibly regressive -- often more than their Federal or State income tax.

This could be fixed by reducing the rate for workers at lower incomes.  Since we've destroyed the fiction that the worker's $$$ go into "his" account, not collecting those $$$ isn't really a problem; just get them from somewhere else.

Second, the system limits the amount of salary on which one has to pay social security tax -- i.e., to pay funds into the system that pays the benefits.  Increase the salary "cap" and voilá, more income.  Of course those at the upper end of the income scale [who receive salary in excess of the "cap"] are JUST THOSE WHO CAN AFFORD TO PAY -- as opposed to those at the lower end.  But Congress is too chicken to deal with this portion of the issue.

There are, of course, many more nuances and complications of this issue.  But the reason McCain's bullshit has an appeal is that is does have a grain of something -- even if not truth -- in there somewhere.