Throwing a lot into one thread, but they do dovetail together.
Background / impetus:
My wife recently returned from a conference. One presenter showed data regarding Social Security payments and how they “discriminate” against the poor. Take two married couples:
Couple 1 has a working husband who makes $50k.
Couple 2 has both working, each making $25k
The husbands die. The spouse from couple 1 gets the SS benefits based on the $50k. The spouse from couple 2 only gets her own benefits based on her $25k, she can not double dip apparently.
In effect, Social Security rewards the stay-at-home spouse MORE than the working spouse when the husband dies. This issue of the sharing of social security benefits brings me to same-sex marriage, polygamy, and general tax policy regarding families (including the marriage penalty at high incomes, and marriage benefit at low incomes).
Proposal for Social Security:
Disconnect Social Security from the marriage completely. Everyone gets one level of benefits, regardless of work or marital status. Additional benefits may accrue based on working. Those are paid to the worker, and ONLY paid to the worker. There are no “survivor” benefits except to dependent children until they reach the age of 18. Non-working spouses have their own floor of benefits independent of the working husband.
This means that polygamy would not have an impact on social security. Same sex marriage would also not have any impact either.
For taxes, I have long supported a flat tax based on the Hall / Rabushka model. I would prefer to keep this to Social Security, but taxes are part of that so I wanted to mention by stance there as well. You can read the original Hall / Rabushka proposal here:
I don’t want to hijack this thread particularly but most countries with a state run retirement system pay out the same amount to everyone. $X per month, regardless of how much has been put into that system by any one person. Which seems to me to make more sense.
Not only is the person who earned more over their working life more likely to have been able to save independent of the state run system but they receive a bigger portion of that as well? Ouch. yeah that discriminates against the poor.
It does not discriminate as much as it rewards you for paying more into the system. The discrimination against the poor kicks in when you realize that the rich live longer, thanks to access to superior medical care and nutrition. The poor simply do not not live as long collecting benefits as the rich.
That should be on the table, though it is the final step to admitting that Social Security is a welfare type plan and not the forced savings plan that it pretends to be.
A partial step would be to uncap the Social Security tax, while maintaining the cap on total benefits. Higher incomes could still accrue SOME additional benefits, while the system would be shored up by the higher payments.