The ongoing social security debate has caught everyone's eyes and ears by now. People don't like what Bush is trying to do, and rightly so. Bush's plan is essentially this: when you are in financial trouble, get a new credit card! He and the Republicans have never liked it and they want to get rid of it, plain and simple. This is their starve the beast plan, which wouldn't be so bad, if the beast weren't the society you and I live in.
I want to propose a somewhat of an unorthodox solution to the long term problems that may arise in social security. First you have to address how SS revenue is collected. Currently you pay 6.2% of your income - up till about $90,000. This means that the social security tax system is regressive and millionires don't have to pay their fair share. That's wrong. So proposal one: get rid of the cap. Extend the personal portion of the tax to unlimited - whatever your income is. This is fair and just because the rich live in a society that allows them to be more fortunate than others and they, like everyone else, have a social responsibility to give back.
Second, cap benefits at a reasonable limit. Adjust it yearly for cost of living increases. This is probably already done.
You will notice that in the first paragraph, I only spoke about the personal part of the social security payroll tax, and that was intentional. Currently, your employer also pays another 6.2% of your wages in social security, also up till $90,000 a year. Here is my third and probably most controversial proposal: eliminate the employer contribution in social security taxes. Employers should not have to pay social security taxes on their employees' wages. Why such an idea? Think self-employed people and small businesses. It's extremely hard being self-employed if 12.4% of your income - no matter how little - goes in a tax that must be paid. Small business who don't make huge amounts of profit are stuck with having to pay 6.2% of their employee wages in taxes even if they don't make any profit or take a loss. Small mom-n-pop businesses ought not be forced out of business because of a program that is designed to help people, not hurt them. Small businesses have to limit hiring, or take losses because of the mandatory social security taxes that disregards whether the business made any money.
So if we do that, there will be a HUGE amount of revenue loss, since almost half - the employers' contribution - of social security revenues would be eliminated. How do we make it up? Part of it is made up from the first proposal - taxing millionires at the same rate as poor and middle class Americans. The rest can be made up by proposal four: a seperate social security tax on profits of corporations, and income above a certain amount (say $100,000) for self-employed people. In this case, the self employed person who makes $1 million a year would pay 6.2% on the first $100,000 of income and 12.4% on the next $900,000. Profits - make that gross profits, that is profits of a corporation before any employee (including but not limited to executive) employee bonuses, loans or debt forgive's, and vacation packages for executives - when there are actual profits for companies, it can be taxed without risking the corporation going under (in cases of small businesses) because of the social security tax, and it will make sure that large corporations pay their fair share while also ensuring that an environment of entrepreneurship and small innovative businesses is fostered.