A Better Social Security
- Pay scheduled benefits for current retirees and previously earned benefits for current workers
- Workers would put 3% of income into a Federal Thrift Savings Plan style program with a 100% government match up to $1,000
- Workers would not accumulate additional social security credits
- Federal guaranteed minimum benefit
- Peg future payroll tax rate to levels needed to pay current retirees benefits, previously earned benefits, minimum guaranteed benefit and savings match
Advantages: As people retire with decreasing claims on the old system, the payroll tax rate required would drop by roughly half. Workers would retire with more money. The poor would accumulate capital, reducing wealth inequality. The system would be permanently solvent
Disadvantages: Politicians would lose Social Security as a political weapon.
A Better Medicare
- Replace Medicare, Medicaid and SCHIP with one new program
- Retain current Medicare benefits for everyone currently 55 and over
- People currently under 55 would use the new system permanently
- Provide individual health insurance tax deduction
- Phase out employer health insurance tax deduction
- Create dedicated refundable health insurance tax credit (health insurance voucher) on a sliding scale for the low income
- Institute adjusted community rating and guaranteed issue
- Persons choosing not to take the health insurance deduction/credit would have that money placed in a health insurance pool
- The health insurance pool would be used to purchase private insurance for the uninsured
- Insurance for the uninsured would be purchased from several companies based on who could provide the best coverage for the amount in the health insurance pool
Advantages: Every American would have health insurance. The current $60 Trillion Medicare unfunded liability would be avoided. No one would loose their insurance when they loose their job. Every American would be able to choose the free market insurance product that fits their life best.
Disadvantages: Politicians would loose the ability to buy votes by adding benefits.
A Better Tax Code
- Individuals and corporations would have the choice of using the current tax code or a new flat tax
- The flat tax rate would be revenue neutral by static analysis (approx. 19%)
- Flat tax deductions for individual health insurance and retirement contributions only
- Exemptions of $15,000 per adult and $5,000 per dependent
- Eliminate capital gains tax
Advantages: The economic distortions of the tax code would be eliminated. Economic growth would increase, producing greater tax receipts at a lower rate
Disadvantages: Politicians would not be able to sell tax loopholes to the highest bidder.
My point is not that these are the best solutions, but that they took 1 person 1 hour. Congress has been unable to solve any of these problems for decades. The problem is not policy, it’s politicians and it’s our fault for electing them.
