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Author: LooseChange One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75797  
Subject: Proposal needs some work.... Date: 10/22/1998 5:35 PM
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I've read the series of articles on the Social Security System, and I've got to say that the proposal for the fix needs some work. I feel pretty good about the proposal working (or at least helping a great deal), but I think the so-called rich are being dealt a bad hand.

I'm a hard-core believer that I should not be taxed unless I receive a "tangible benefit" as a direct result of my share of the tax. The gas tax levied by states pays for road improvements. If I don't drive, I don't use roads; I don't need gas; I don't pay the tax. If I pay the Social Security tax, I should receive a tangible benefit - more tangible than a liberalized "good feeling" that my buddy down the road that retired on the job at age 30 (e.g., Mr. Joe NoAmbition) is going to be taken care of (c'mon, we've all seen them).

A similar situation exists in Gwinnett County in the good State of Georgia (suburban Atlanta county). A majority of the property tax assessed on residents of that county goes to the school system (county operated). Everyone probably knows where this is headed, but I am a single (actually divorced) homeowner with no children, and I strongly feel that I don't derive any tangible benefit from this tax. Of course, the standard argument is that I derive an indirect benefit by having better educated children, who will grow into better educated adults. My question is, where are the better educated children? Has anyone looked at Georgia's ranking on the last test scores? We are 49th (only South Carolina and the District of Columbia are worse if I'm remembering it correctly). Hmmm. I somehow feel like I'm being cheated after that last property tax increase a couple of years ago.

The same goes for the proposal for lifting the wage base and implementing means testing. If I retired "well-off", I would really feel cheated, and rightly so. I don't really have the numbers I need to crunch through to see how much of a difference this will make; but my general feeling is that either the rich should be allowed to participate fully in the system just like everyone else, or they should be taken COMPLETELY out of the system (and given an income tax credit that can be averaged out over many years for money that has already been paid in to the Social Security system prior to their removal).

The proposal mentioned in this series of articles is very scary to me for another reason. In the end of the book, "The Millionaire Next Door," (which was on the Fool's recommended reading list at one time I believe, it may still be) the author(s) make mention of the coming of a Federal tax on wealth - not income (yes, a tax on money just sitting in the bank). The author(s) contend that this will be necessary because of the fact that fewer and fewer people seem to be controlling more and more of the wealth in this country. The author(s) also point out that some states are doing this (or have done this) in the past. Georgia WAS one of those states I believe, and it was called the "Inventory Tax." This is a very similar situation at the Federal level under this proposal; by not distributing benefits back to the wealthy, the Fed. is essentially imposing an indirect tax on wealth. This type of governmental policy could unlock some doors that I had much rather see remain locked.

Fool on, and happy debating.

LooseChange..
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