Comprehensive Legislative Proposals to Enhance Social Security
WM: Social Security Subcommittee, Comprehensive Legislative Proposals to Enhance Social Security, April 10, 2019
As a reminder, we suggested in our first installment of the series, we reminded the subcommittee of the virtues of social insurance in achieving decent outcomes regardless of circumstances of birth and family size, as well as fostering employee-ownership as the best way to assure a decent middle-class retirement by putting people back into the middle class as workers and giving them control of the workplace. We also attached previous comments distinguishing the upper middle class, who is doing quite well without help, but because they are particularly vocal and are frequent political donors, get more help than is justified. The attachment also explored the use of a monthly tax credit of $1,000 for each child as a way to, along with a $15 per hour minimum wage for workers and students, lift families out of poverty regardless of prior circumstances. Let us add here that concerns that this damages society by reducing the need for self reliance is total and utter nonsense. That some consider such reliance as mandated by Christianity have no real knowledge of Jesus or the Kingdom of God.
In our second installment the next day we explained how shifting from payroll to subtraction value added taxes could allow us to walk and chew gum at the same time, setting rates high enough to fund current retirees while creating personal accounts holding employer voting stock in two-thirds of the account with the other third holding shares in other employee-owned firms. A key provision is the crediting of employer contributions equally, i.e. without regard to wage levels. This allows inserting a lower ceiling and a higher floor in the employee tax and ending the EITC in favor of a larger refundable child tax credit.
In both of these hearings, the attachments included a restatement of our four-part tax reform plan, which includes funding for entitlements. We have added an asset VAT as a replacement for capital gains taxes. This tax is part of our high income surtax provisions, which should be set high enough to fund returning the Social Security Trust Fund to the taxpayers who built it up in the first place. Here is our current proposal. Updates since our last submission are italicized.
A key part of our proposal is to provide an incentive for upper-income Americans to stop demanding tax cuts to be used in asset speculation, which triggers Social Darwinian boom-bust cycles so that the next big thing can emerge and Devil take the hindmost. The reality is that innovation happens when customers have money, not liquid paper.
Let me (again) remind the committee of our ling term debt crisis. As long as Europe does not link its currency to consolidated debt guaranteed by a continental income tax, we can keep rolling over interest payments into new borrowing. Once they realize this is how we succeed, the borrowing window will be closed.
The national debt is possible because of progressive income taxation. There is no per capita debt because there are no per capita taxes. The liability for repayment, therefore, is a function of that tax. For every dollar you pay in taxes, you owe $13 in debt. People who pay nothing owe nothing. People who pay tens of thousands of dollars a year owe hundreds of thousands. The answer is not making the poor pay more or giving them less benefits, either only slows the economy. If higher income taxpayers wish to finance deployments and roll over net interest payments and debt reduction, starting with the reimbursement of the Social Security Trust Fund as the Baby Boom spends it down, then the high income taxpayers if the future, their children and grand children, will be required to (again, with interest). On Friday last, we created a table that illustrates how much each income strata owe. This is relevant to Social Security because a nation without credit cannot finance long-term retirement, even with substantial employee ownership and control. This table should end the career of Grover Norquist.
Our proposals are not new. Giving them to the new Majority is. I urge the new leadership to stop using the prospect of personal accounts as an electoral issue. I have not and will not suggest that these accounts be used as a subsidy for the asset inflation of Wall Street. Indeed, these accounts shift finance from Wall Street to employers and in doing so will fund investment in plant an equipment, not commissions for mortgage bankers. Our legislative proposal for Social Security reform, which was last provided regarding the 2016 Trustees Report, is Attachment One.
As a reminder, we suggested in our first installment of the series, we reminded the subcommittee of the virtues of social insurance in achieving decent outcomes regardless of circumstances of birth and family size, as well as fostering employee-ownership as the best way to assure a decent middle-class retirement by putting people back into the middle class as workers and giving them control of the workplace. We also attached previous comments distinguishing the upper middle class, who is doing quite well without help, but because they are particularly vocal and are frequent political donors, get more help than is justified. The attachment also explored the use of a monthly tax credit of $1,000 for each child as a way to, along with a $15 per hour minimum wage for workers and students, lift families out of poverty regardless of prior circumstances. Let us add here that concerns that this damages society by reducing the need for self reliance is total and utter nonsense. That some consider such reliance as mandated by Christianity have no real knowledge of Jesus or the Kingdom of God.
In our second installment the next day we explained how shifting from payroll to subtraction value added taxes could allow us to walk and chew gum at the same time, setting rates high enough to fund current retirees while creating personal accounts holding employer voting stock in two-thirds of the account with the other third holding shares in other employee-owned firms. A key provision is the crediting of employer contributions equally, i.e. without regard to wage levels. This allows inserting a lower ceiling and a higher floor in the employee tax and ending the EITC in favor of a larger refundable child tax credit.
In both of these hearings, the attachments included a restatement of our four-part tax reform plan, which includes funding for entitlements. We have added an asset VAT as a replacement for capital gains taxes. This tax is part of our high income surtax provisions, which should be set high enough to fund returning the Social Security Trust Fund to the taxpayers who built it up in the first place. Here is our current proposal. Updates since our last submission are italicized.
- A Value Added Tax (VAT) to fund domestic military spending and domestic discretionary spending with a rate between 10% and 13%, which makes sure every American pays something. Carbon taxes are included in this category.
- Personal income surtaxes on joint and widowed filers with net annual incomes of $100,000 and single filers earning $50,000 per year to fund net interest payments, debt retirement and overseas and strategic military spending and other international spending, with graduated rates. Capital gains taxes will be replaced by an Asset VAT or A-VAT of between 20% and 30%. At inheritance or at the exercise of options, previous tax payments will be set to zero. Brokers will collect these taxes and remit them to the SEC. Sales to qualified ESOPs will remain tax free. Short term trades will be subject to a Tobin Tax.
- Employee contributions to Old Age and Survivors Insurance (OASI) with a lower income cap, which allows for lower payment levels to wealthier retirees without making bend points more progressive.
- A VAT-like Net Business Receipts Tax (NBRT), which is essentially a subtraction VAT with additional tax expenditures for family support, health care and the private delivery of governmental services, to fund entitlement spending and replace income tax filing for most people (including people who file without paying), the corporate income tax, business tax filing through individual income taxes and the employer contribution to OASI, all payroll taxes for hospital insurance, disability insurance, unemployment insurance and survivors under age 60.
A key part of our proposal is to provide an incentive for upper-income Americans to stop demanding tax cuts to be used in asset speculation, which triggers Social Darwinian boom-bust cycles so that the next big thing can emerge and Devil take the hindmost. The reality is that innovation happens when customers have money, not liquid paper.
Let me (again) remind the committee of our ling term debt crisis. As long as Europe does not link its currency to consolidated debt guaranteed by a continental income tax, we can keep rolling over interest payments into new borrowing. Once they realize this is how we succeed, the borrowing window will be closed.
The national debt is possible because of progressive income taxation. There is no per capita debt because there are no per capita taxes. The liability for repayment, therefore, is a function of that tax. For every dollar you pay in taxes, you owe $13 in debt. People who pay nothing owe nothing. People who pay tens of thousands of dollars a year owe hundreds of thousands. The answer is not making the poor pay more or giving them less benefits, either only slows the economy. If higher income taxpayers wish to finance deployments and roll over net interest payments and debt reduction, starting with the reimbursement of the Social Security Trust Fund as the Baby Boom spends it down, then the high income taxpayers if the future, their children and grand children, will be required to (again, with interest). On Friday last, we created a table that illustrates how much each income strata owe. This is relevant to Social Security because a nation without credit cannot finance long-term retirement, even with substantial employee ownership and control. This table should end the career of Grover Norquist.
Our proposals are not new. Giving them to the new Majority is. I urge the new leadership to stop using the prospect of personal accounts as an electoral issue. I have not and will not suggest that these accounts be used as a subsidy for the asset inflation of Wall Street. Indeed, these accounts shift finance from Wall Street to employers and in doing so will fund investment in plant an equipment, not commissions for mortgage bankers. Our legislative proposal for Social Security reform, which was last provided regarding the 2016 Trustees Report, is Attachment One.
posted by Michael Bindner at 9:00 AM
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