Tax the Rich in Order to Repay the Looted Social Security Money, Economist Says

WINTER HAVEN, Fla., Jan. 13, 2011 /PRNewswire/ -- Taxing the rich, in order to repay the looted Social Security money, is the only fair way to resolve the short-term Social Security funding problem, argues economist and author, Allen W. Smith, Ph.D.  Smith explains that the 1983 Social Security legislation required the baby boomers to prepay the cost of their own benefits, in addition to paying the cost of their parents' benefits.  All earlier generations had been required only to pay the benefits of the previous generation, but "the baby boomers got hit with a double whammy," Smith says. "They have paid more into the Social Security fund than any other generation, and still they are often falsely accused of causing the Social Security problem."    

According to Smith, much of the funding for the unaffordable income-tax cuts, under both Ronald Reagan and George W. Bush, was paid for with revenue from the 1983 payroll tax hike.  As a result, a substantial portion of the extra Social Security contributions that the baby boomers were required to pay ended up in the pockets of the rich in the form of cuts in the progressive income-tax rates.  Since the rich received much of the looted Social Security money, they are prime candidates to be the source of the revenue needed to repay the trust fund, Smith says.  

Dr. Smith, author of "THE LOOTING OF SOCIAL SECURITY: New Release of the Book 'They' Didn't Want You to Read," says there is no justifiable reason for cutting Social Security benefits.  If the looted money is repaid, full benefits can be paid until 2037, Smith points out.  And, Social Security could be made fully solvent for many more decades by simply removing the earnings cap on income subject to payroll taxes. Smith advocates gradually phasing in the tax increase, as the funds are needed to pay benefits. He says the money could be repaid in installments over the next 25 years.  

SOURCE Ironwood Publications