Re: Social Security trap...

From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Social Security trap...
Date: Mon, 15 Mar 1999 12:05:25 -0500

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>1. Every American pays 12.4% of their annual wages (the first $68,400) into the
>Social Security system.

Two points...

(a) For 1999, the FICA limit is $72,600, not $68,400.

(b) I am a bit suspicious of the Ferrin story posted because of
    the claim that people pay 12.4% towards SSN.  The author of
    the story is claiming that the 6.2% of salary that the employer
    pays should be counted as tax paid by the employee because if
    the employer-side tax wasn't levied, that money would have been
    paid to the employee.

    That is, simply, a ludicrous argument.  I have to be very suspicious
    of someone so ignorant (or willfully ignoring) of basic economics 
    in the cause of trying to make a rhetorical point.  If the employer-side
    SS tax was abolished tomorrow, I guarantee you that wages would not rise
    6.2% in the aggregate.  It depends very much on the price elasticity of
    labor.  In hot fields, most or all of that 6.2% would go to the worker.
    In fields where there is an oversupply of labor, most or all of the 6.2%
    would be kept by the company to increase its profit.  For other fields,
    it'll be somewhere in the middle.

I note that I consider SS a fraudulent cross-generational ponzi scheme that
is horrible for anyone in their 30s or younger.  Nonetheless, I have to rail
at the use of bogus statistics, since doing so will not ultimately help the
cause of fixing SS (for the record, "fixing" SS in my book means giving people
actual ownership in their SS "accounts", requiring them to buy an annuity so
that even if all their other investments totally fail, they'll have some money
in their SS accounts when they retire, and letting them invest how they please
with the rest).

Rich Carreiro
rlcarr@animato.pn.com
P5-100/RedHat Linux 4.2

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