SSN – Social Security Net

Does it not seem obvious that when it comes to examining a UBI (universal basic income) that we already have a system for distribution of socially sourced funds?

The Social Security program was designed and implemented in 1935 (Roosevelt). It depends on payroll taxes collected through the FICA and SICA and deposited into two trust funds.

(See rejoinders to this theory here)

One of the curious aspects of the law is this: “All income over said amount is not taxed. In 2017, the maximum amount of taxable earnings was $127,200“.

Hmm, so the millionaires and billionaires who rake in the earnings through capitalism’s primary engine — the corporation populated stock market — don’t have to cough up more than any one “human” might be expected to contribute, year over year.

Whaaaaat? Not only don’t the wealthy of the world have to pay appropriately scaled income tax (to support the country as a whole), they don’t have to pay *proportionately* into the Social Safety Net that is there to provide for all the workers, that is, the wealthy’s wage-enslaved workers.  The workers on whom they built their multi-billion dollar empires. THAT doesn’t smell right!

If a society could rein in such income sources, I wonder if the Social Security System might not be the basic income platform the US, at least, could use to begin to create a UBI styled social safety net.

Imagine if instead of upping the age at which Social Security was endowed, we lowered it! What would happen if we lowered the age to get benefits to 50? Provided we could enforce expanded payments by the 1-5%’rs of the world. Could Social Security be lowered to 40 years of age? Might it need to be lowered to such an age in the coming automation onslaught?

I could see that those between the age of 20-40 could be the most active, the most productive, and energetic regarding productive forms of work that society would install a safety-net above that age. By the time anyone reached the age of forty — now you needed serious financial assistance to combat the robots taking your jobs.

I’ve only just started examining Social Security as THE form of a social safety network. But, stepping back and tilting one’s head to the side, Social Security sure as hell looks like the right system to hijack with regards to creating a basic income for all.

Social Security Income SSI

Imagine if the United States had the following policy in place RIGHT NOW.
Assumptions for SSI:

  • Humans live to 100 years of age (with adjustments over the generations).
  • Humans *can* begin receiving Social Security benefits at the age of 40.
  • The monthly income will be a factor of age and financial and economic data constructing a dynamic algorithm which will automatically adjust for inflation, population, and longevity. The point here is to build the algorithm such that Social Security Income determines how the system should work — NOT politicians.
  • The algorithm will scale from a minimum payment at age 40 to a maximum payment at age 100 or Average Longevity (AL).
  • Early benefit election will increase the SS and Medicare tax rate they must pay on actual income earned.

Impact of policy:

  • Some people will opt to begin receiving payment at the earliest possible – 40 years old.
  • This will tend to pull these people from the work force — FREEING UP jobs for the younger generation (20 – 40 years of age). This is how we combat the loss of jobs through automation.
  • Those that continue to work AND receive benefit can then support their dependents, children and grand children, who are not eligible, with their benefits. That is, at age 50, a parent could use the SSI to pay for higher education for their children.
  • Some people will opt to delay their SSI benefits out to whatever age they care to. When they begin to receive their payment, the algorithm will adjust their personal payments based on the age at which they began SSI benefits. This will provide the incentive to delay benefits as long as possible.
  • The end income for a working, benefit enabled 40 year old will still be greater than had they not elected for SSI benefits. But, the greater tax will help offset the extra outlay of the system such that it will behoove workers to still delay benefits for as long as possible.

Steps to accomplish this:

  • Use the EXISTING Social Security system to manage individual collection, accrual, and payment. No new system need be created. The Social Security system already has all the infrastructure, data (SSNs) and investment system to handle this.
  • Raise the ceiling limit for income to be taxed by Social Security. Instead of $127k, lift it to infinity, but scale it. 15.3% (12.4 Social Security, 2.9 Medicare) to $200k/year. Then half that to $500k/year. Then half of that, to $1m/yr. And so on and so forth
Income SS % Medicare % Total %
$0 – $200k 12.40% 2.90% 15.30%
$200k – $500k 6.20% 1.45% 7.65%
$500k – $1M 3.10% 0.73% 3.83%
$1M – $2M 1.55% 0.38% 1.93%
$2M-$10M 0.78% 0.19% 0.96%
$10M+ 0.39% 0.09% 0.48%
  • Include the Employee Inequality Tax the proceeds of which will join the Social Security Funds. This taxes corporations on the level of worker pay inequality.
  • Enact this policy as a gradual shift in Social Security behavior. Break down the changes, the tax increases, the lowering of the benefits eligibility age, over one to two generations.

 

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