No. of Recommendations: 3
There's really no vested social security assets to draw on. To preserve current benefits for Social Security recipients, you'd still have to collect FICA at about the same rate PLUS whatever contributions you want to put in the privatized system. In effect, current workers would be paying twice.

Any volunteers?

intercst


Sure. As long as the following criteria could be met:
1) Means test all SS distributions based on recipients net worth. No sense in taking tax money from the kid working at Wal*Mart to fund the retirement of somebody with $1 Million in assets.

2) The FICA tax rate would be strictly calculated to that year's expenditures, and no artificial "surplus" would be created (any surpluses at the end of the fiscal year would be subtracted from next year's expenditures).

3) Immediately adjust the retirement age to reflect the increased life-span of tax payers since SS was conceived.

So that would make the current FICA tax what? Well under 10%?

I am already saving for my own retirement while paying confiscatory tax rates. And since I expect that SS will look something like what I've outlined above (with the exception of #1, perhaps) I am already paying twice. In fact, my generation will get to pay a little over three times:
1) Direct FICA taxes
2) Our own personal accounts (IRA, 401(k), 403(b), etc.)
3) All current SS surpluses are being converted into special issue Treasury bills, and the money is transferred onto the general budget. These T-bills will start to be called due sometime next decade. Where will that money come from? General tax revenue, which my generation will be paying.

Here's the real rip-off: Even if SS is around in it's current form when my generation retires, our benefits will be calculated only on our direct FICA taxes, none of the T-bill repayment will be taken into account. Talk about a negative rate of return. YUCK!

-Bill

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