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Posted on 01/04/2005 6:42:41 PM PST by RWR8189
WASHINGTON - The Bush administration is focusing on a Social Security (news - web sites) proposal that would allow younger workers to invest up to 4 percent of their payroll taxes in private accounts, with contributions limited to about $1,000 to $1,300 a year, an official said Tuesday.
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A final plan is expected to be unveiled in late February.
The official, who spoke on condition of anonymity, said the size of the private accounts could be similar to a proposal by Sen. Lindsey Graham (news, bio, voting record), R-S.C., and a plan from President Bush (news - web sites)'s 2001 Social Security commission.
Both would let workers divert 4 percent of their payroll taxes into accounts, while the remaining 2.2 percent they pay would continue going into the current system. The federal 12.4 percent payroll tax is split between workers and employers.
Graham's plan calls for the annual contributions to be capped at $1,300, while the commission proposed a lower limit of $1,000.
To sell the idea of a Social Security overhaul — and private investment accounts — the administration plans to duplicate its successful campaign for tax cuts.
At an event planned for Monday, Bush will meet with White House-approved people of varying ages to illustrate how changes to Social Security would affect different generations.
The strategy is similar to Bush's efforts to gain support for his tax cut packages by featuring "tax families" and their financial situations.
"That's the model," said Michael Tanner, director of the Cato Institute's Project on Social Security Choice. The libertarian think tank has been a longtime proponent of investment accounts.
"This is the way the president tends to campaign on these issues," Tanner said, noting similar strategies for Bush's Medicare and education plans. "He hasn't lost one he wanted to win yet."
Cabinet officials are stepping up their roles in the effort. Treasury Secretary John Snow, Labor Secretary Elaine Chao and others can be expected to visit communities across the country to talk about Social Security.
I hate this crap. Why cap the amount. If it is 4% it should be 4% of what you pay. I know I know they just can't get even a tiny bit away from redistributing the wealth. If I could I would opt out totally. I hate SS with a passion.
I hate it so bad I think I will have on my tomb stone. Keep sending my SS check to my new address so I can live well in retirement.
I agree.
Any ideas of what a "younger worker" means?
tax ping for ya
The Big Lie is that Social Security is some kind of retirement savings plan.
It is NOT.
Social Security is a socialist income redistribution scheme, nothing else.
Those who are working are taxed to provide a "safety net" for those who are less fortunate.
Originally, this meant retirees and surviving dependents.
Congress has, of course, complicated it far beyond this over the last 65 years.
But one fact remains: it is NOT a "savings plan", it is an income redistribution scheme.
A major facet of The Big Lie is that "we have to do something so that Social Security remains solvent in the future.
Poppycock!
In today's age of modern computerization, the computation for operating an income redistribution scheme that remains perpetually solvent is quite simple:
The only change necessary to the current system is that monthly payments to eligible recipients would be a variable amount, not fixed.
THERE IS ABSOLUTELY NO NEED FOR A MULTI-TRILLION DOLLAR "TRUST" FUND!!!
Congress should NEVER have been permitted to confiscate so much money from the American People in the name of The Big Lie. This fund is nothing but a slush fund that Congress raids to pay for other government expenditures. If private sector employers did the same thing with their companies' pension funds, they'd be placed in prison. The "privatization" plan proposed by Bush is merely an attempt by Wall Street brokerage firms and financial institutions to get in on the scam: grab a portion of a constant revenue stream (guaranteed by taxation) from which they can skim their commissions.
The American People need to wake up and put these liars and thieves in prison.
Good question. I was wondering too just today. I want my money back. I could do a lot with that money. I could make more money. I could go back to school...and make more money. Just think of the possibilities.
Since "workers" in effect pay the entire 12.2% tax, this lets them reallocate approximately one third. I wonder what the catch is going to be to get the money out of these accounts.
I'm with you. I too would opt out of the system in a heartbeat.
I haven't followed this very closely but why not allow employees to invest up to ten percent of their income in a tax free savings/investment in addition to their Social Security???
""That's the model," said Michael Tanner, director of the Cato Institute's Project on Social Security Choice. The libertarian think tank has been a longtime proponent of investment accounts."
These phoney "libertarians" have no shame. If I had choice I would invest it as I wished, not some mandated "account".
I assume the non-mention of "stock market" is a response to the criticism from all sorts including Rush Limbaugh about this brokage house profit scheme, hiding the agenda and who paid for it in verbal ambiguity. Unless they've had a change of heart and decided to bonus the banks in some new and unneeded IRA type plan. I think they're probably laying low not mentioning "stock market".
If we pay 12.4 of our income for payroll taxes, wouldn't we be allowed to divert about 33%? Or rather 4 points out of 12.4?
For personal investment reasons, I classify myself as a younger worker. I'm age 31.
Ever heard of 401k and RothIRA?
So why is it that when I read that article, it made it sound like its 4% of 12.4%.
Both would let workers divert 4 percent of their payroll taxes into accounts, while the remaining 2.2 percent they pay would continue going into the current system. The federal 12.4 percent payroll tax is split between workers and employers. Shouldn't it be..."Both would let workers divert 4% of the 6.2% paid in payroll taxes into accounts, while the remaining 2.2% they pay would continue going into the current system."
I still think that if GWBush really wants an ownership society, they would exempt all income going into retirement accounts from taxes, *AND* allow unlimited income to go into retirement accounts. I'm tired of the $13K maximum allowed for 401K plans. It would be great to be able to store away more money, tax free.
Where is the money going to go?
Isn't the stock market overvalued already,right now?
Won't adding 160 Billion/year (160 million x $1000)more just create a market bubble?
"Ever heard of 401k and RothIRA?"
of course but couldn't the limit be raised instead of messing with Social Security...what's the limit now 2K??
two grand sure isn't much...and the ROTH is what three or four grand???
Yes. Unfortunately, most media types - undereducated Gen X'rs - haven't learned how to distinguish between 4% of payroll taxes and 4% of payroll.
Funny, from most of what I see on TV today (still) most of the media is still the baby boomers, albeit the younger crust of them.
401k is $14,000 this year (woohoo!)
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