Herman Cain’s Social Security Problem

Red State ^ | 11-28-2011 | alandlugash

[TitansAFC]

Though I applaud the refreshing boldness that Mr. Cain had shown by proposing to America an actual plan for tax reform, there are two serious drawbacks to his solution that show his fiscal naivete. Most critics would point to the unsavory proposal of having both a sales and income tax in force at the same time, making it possible for future Congresses to increase rates and turn us into Europe. But it is actually the plan’s impact on Social Security that is most devastating.

Cain’s plan would eliminate the Social Security tax and related withholding, and cover retirement pensions as a true “entitlement” (welfare) system out of general tax revenues. This is not what Social Security was intended to be as established by FDR; that is, a system in which people paid for their own retirement. Once liberal politicians started promising individuals far in excess of what their contributions paid for, with no actuarial consideration nor funding whatsoever, Social Security’s demise became assured.

In order to overcome its crippling insolvency, Social Security must go back to its original intent — a self-funded retirement plan. This could be achieved by taking any of many possible forms, but must include the concept that individuals themselves are paying for their own retirement; ie, they are putting money into a plan which will become their invested retirement fund.

By contributing more deeply to the entitlement problem and making Americans further wedded to the government through entitlements, Cain’s tax plan is a failure. Such a solution ultimately departs from his avowed conservativism.

[BagCamAddict]

Most critics would point to the unsavory proposal of having both a sales and income tax in force at the same time, making it possible for future Congresses to increase rates and turn us into Europe.

Yawn.

So Congress can't raise taxes under our current system?

And we don't currently have Sales Tax "in force at the same time" as Income Tax in all but five states? (Alaska, Delaware, Montana, New Hampshire, Oregon)

This is a tired argument.

Cain's plan isn't the best option, but he put something on the table and forced the other candidates to come up with a proposal. If people want to gripe about Cain's ideas, they should jump to the end result, which is the Flat Tax. 9-9-9 is a transition plan. (And in my mind, why bother with that... just get right to the end game.) So if people have a better idea, throw it out there. Because if we don't start talking about it now, it will never get changed/fixed.

[sodpoodle]

Yes - if the pensions were not stopped ASAP.

How many working people get such a generous pension after only 2, 4, 6, or 8 years on the job?

Term limits can be implemented and elected officials must make their own contributions to a 401K or to the Social Security fund....like every one else.

[BenKenobi]

Which is what Cain has supported if you listened to his debate with Gingrich.

Why are you lying about him again?

Cain supports privitization of the present system.

[Graybeard58]

So that would have been in 1935. Payments began in 1940 and Ida May Fuller, who had paid $22.54 total in SS taxes, started collecting checks for the next 35 years and got a total of $22,888.92 in payments.

That worked out for Ida May but not so well for my dad, who paid in from the beginning until he died in 1974 and never received a dime from S.S.