The leading Democratic proposals for Social Security reform all consist of tax increases, benefit cuts or some combination of the two. And none of them offers any hope of fundamentally reforming the current system. These proposals are not politically feasible or economically rational. As the recent trustees' report indicates, at least a 50 percent increase in payroll taxes dedicated to Social Security, a 33 percent reduction in benefits or some combination of the two would be necessary to avoid financial peril without fundamental reform.
The AARP, formerly known as the American Association for Retired Persons, would keep the American people dependent on government, so they oppose all efforts to empower individual workers with personal accounts. They first deny any problem exists with Social Security, and when forced to admit there will be a financing shortfall in the future, they fall back on the tired and failed liberal ideology of tax and spend. One frequently heard palaver is an increase in the income cap that can be taxed for Social Security benefits.
Former Social Security Commissioner and AARP poster boy Robert Ball supports increasing the tax on benefits to 90 percent of all earnings instead of the current 85 percent.
It is time to transform payday from a tax event into a saving event for individual Americans. It is time to transform the FICA tax and its surpluses from a slush fund for the spending-addicted Congress into a source of wealth and prosperity for workers.
I, along with former House Majority Leader Dick Armey and former Social Security Commissioner Dorcas Hardy, have created the Alliance for Retirement Prosperity (www.arpnow.org). We want to make it possible for today's workers to move half of their payroll taxes into personal accounts that would be there for their retirement. For a single worker earning $30,000 a year and a two-earner married couple earning $30,000 and $40,000 that would mean annual savings of $2,000 and $4,500, respectively.
Most importantly, large personal retirement accounts would be a real source of prosperity and ownership and bring to fruition our vision of democratizing the American dream - making every American worker a shareholder and investor in our capitalistic system.