Over at Q&O, there is a post that got me thinking of something that happened the other day.
This matters because Social Security and Medicare are pay-as-you-go programs. Current taxpayers pay current benefits. Future taxpayers – mainly future workers – will pay future benefits. Even if adopted, President Bush's personal accounts for Social Security would hardly alter that.Consequently, baby boomers' children and grandchildren face massive tax increases. Social Security and Medicare now equal 14 percent of wage and salary income, reports Bell. By 2030, using the trustees' various projections, that jumps to 26 percent. The implications are clear to anyone who cares to look.First, assuming we keep those programs basically unchanged, massive tax increases will be necessary to cover those costs. We're talking payroll taxes alone of 26% simply to cover the cost of those programs. That doesn't count federal income taxes at all. That implies a marginal middle-class tax rate above 50%.
This matters because Social Security and Medicare are pay-as-you-go programs. Current taxpayers pay current benefits. Future taxpayers – mainly future workers – will pay future benefits. Even if adopted, President Bush's personal accounts for Social Security would hardly alter that.Consequently, baby boomers' children and grandchildren face massive tax increases. Social Security and Medicare now equal 14 percent of wage and salary income, reports Bell. By 2030, using the trustees' various projections, that jumps to 26 percent.
The implications are clear to anyone who cares to look.First, assuming we keep those programs basically unchanged, massive tax increases will be necessary to cover those costs. We're talking payroll taxes alone of 26% simply to cover the cost of those programs. That doesn't count federal income taxes at all. That implies a marginal middle-class tax rate above 50%.
Saw a bunch of old fogies on the roadside the other day holding signs that said "Keep your hands off of my social security". Had I been in the right hand lane I'd have pulled over and asked them if they planned to keep their hands off of my social security. Because that would mean they couldn't touch the money I was putting in right now and if they couldn't touch it (ie - kept their hands off of it) then why would it bother them if I wanted to do with it as I pleased.
However, that was a conversation that never happened.