GTL- Thanks for the comments. I will, at some point, address the issue of taxation, and will think about your points at that time. I think your ideas definitely have some merit.

As for the retirement age being 55- I’m not sure how feasible that is in an era of expanding life expectancy and better medical care. Also, from a economical standpoint, funding 30-40 year retirement plans seems much more difficult to accomplish, and still get all the other things from our government that we expect.
So early retirement may be a great idea for those who can pull it off, but the retirement funds would need to stay in place until the 70th year to fully realize the benefits of compound interest. The goal is to make sure people can live off these funds (and any they may have accrued in other places) in their retirement years instead of having to rely on other assistance programs.

Of course, all ideas are subject to some compromise, and with it, a truly sustainable plan can be created.

First, I’d like to bring the retirement age back to 55. I think working and contributing to society for 30-35 years is more than enough. Should you wish to work longer, you’ll get a higher yearly payout but you CAN hang it up at age 55 in the best case scenario.

Now how to fund it, right? One thing we know is there are millions of people who do not contribute at all to the financing of our government. This includes but is not limited to the wealthy amongst us who take full advantage of every tax break they can get, as well as sex workers, under the table workers, bar band musicians and servers who are paid in tips. Folks who do not work outside of the home also fall into this category. They just do not pay one red cent into the government while the rest of us pay huge taxes.

Bottom line – we make them pay the same amount of Federal taxes that the rest of us have to pay. This is where a flat tax comes in. This tax should be taken at the register, every single time a dollar changes hands at a business. We do not NEED the IRS. They are a waste of money under a flat tax. We’ll only need a Federal agency to insure the flat taxes are being paid by the purchaser to the business and that the businesses are sending that money into the government on time.

Just imagine how much revenue would be collected in this manner. How many times is a dollar bill passed before it is burned and taken out of circulation? If 20 cents were taken and sent into the Federal Government every single time it passed hands, how much revenue has been collected? Without having to fund the IRS and in fact, abolishing that huge, money-sucking government machine, how much revenue does that free up?

As for the argument about how much more things will cost when a flat tax is taken at the register, we’re paying more than that now anyway. Money is only worth something at the time it is presented at the register anyway. It is worthless when it is buried in a mason jar under the house.

You do think outside of the box Ken. Consider thinking outside of the box on the issues of taxation as well. Saddling businesses with the responsiblity is one thing but just how many businesses are profitable compared to those who are not? While accomodations could be made to tax only upon the businesses’ actual PROFIT, it still opens the door for cheating.

Nope, I don’t like our current taxation system at all. With the exception of the retirement age being at 70 in your proposal and with the exception of such a pitiful payout (consider inflation over the years to come), I like it very much. I just think there is a much fairer way to finance it, that’s all.

Last but not least, if you are wealthy, there is no reason for you to collect any type of government-funded retirement. They can get their personal contributions (the ones you proposed) back with no penalty but I see no reason at all why comfortably wealthy folks would want, or need a tiny little government check each month. Now, should their financial status change and take a turn for the worse in their golden years, well of course they can draw it.

I know many will discount this as being communistic but hearkening back to your previous post, they most likely wouldn’t be wealthy were it not for the blood, sweat and tears of the common man who helped make them that way (it is normally a “collective effort” to obtain wealth after all).

Consider those ideas and keep on blogging, Ken!

Ashley- I’m really glad you took the time to read through the series of posts, and even more surprised that you managed to go from a position of hating my ideas to almost endorsing the end product. The fact of the matter is that we do have and will continue to have a natinal retirement program in one form or another, so why not adopt one that is both economical and equitable. I also thank you for your thoughtful questions, which I will now try to answer.

1) You are right about the money going into a type of dedicated individual account, at least from a payback point of view. What’s yours will be yours when your time comes to collect. I know that I left out the costs of administration, so I am glad you brought this up. As I see it, the government is not an efficient administrator, but could be legally obligated to become more so. There is no reason for a layered bureaucracy in this type of system as it is pretty straight forward. The actual work would likely be simple accounting procedures, and much of the system could be automated, requiring much less man power than the current system. But it will still take some money to run. Who pays? Perhaps this is where we bring the individuals back into the front end of the plan, engendering some “ownership” by funding a small tax to pay for administration costs. The tax would have to be evenly apportioned and not based on wages.

2)The reason for this plan being covered by employers only (not including the aforementioned administration cost tax) is twofold: first, companies are the ones who profit most from labor and owe their success to their workers, and secondly, because I hope to propose a plan for health care that eliminates this cost from employers altogether. Combined with reduced overall pension costs, companies will come out farther ahead than they do now. The individual will assume more responsibility for their day to day lives and needs without having to worry about their retirement security.

3) Because of the way the system is designed, retirement benefits are not tied to wages earned, so all monies paid into the fund by employers are divided as described, ensuring that all the people you mention are covered too. Disabled individuals are another part of the social security program and is unrelated to retirement, but the short answer is yes, they too will get the national pension plan benefits. I previously wrote an essay that briefly describes changes in the programs for people currently on government welfare that describes how to help them back into the workforce, but again, yes at retirement age, the pension benefits would be there. There would not be a combined benefit except under tightly defined circumstances that would need to be hammered out.

5) Yes, all jobs have value but are equal only in the sense that society calues them all and needs them all to be performed to properly function. I didn’t imply that unqualified people should just do whatever their heart desires. You will still need to be successful in your job or you won’t have it for long. The point that I was making is that the guy whoh cleans dishes at the restaurant should not have to worry about retirement security simply because he didn’t have the skills to be a brain surgeon. We do need dishwashers too. Now the brain surgein will obviously have a larger retirement fund since she could afford to put more away, but at least the dishwasher won’t be living on the edge in his eighties.

5) Since everyone would have an equal and comparable retirement base, there wouldn’t be a need to pass the money on to others. I make the case for people with dependents simply to recognize the hardships faced by people whose spouse has died. Before you say, “What about single parents?”, they have dependents who would also get their portion of the retirement fund, so no one is really left out. Yes, I know that these dependents also have their own retirement acccounts waiting for them too, but in their case, the deceased’s retirement funds would help offset the costs of raising the dependents to adulthood, which is preferable to going completely on the public dole.

I hope that this answers your questions satisfactorily. And no, I haven’t sent this idea to my congressman yet. Maybe I should. But I have a hard time believing that in the current climate I would be able to make it through the front gate. Who knows though?

Finally, a bit off topic, but many of my previous posts ( and future ones for that matter) explore ways to streamline the costs of government at many levels. If combined, the reforms I suggest could result in considerably less expensive yet more efficient government, lowering the overall tax burden for everyone. I encourage you to read more if you’re curious. In the end, you may start with the same visceral reactions as you did these posts and come out thinking, “Hey…this guy isn’t so crazy afterall.”

Thanks for the opportunity to add some fine details to this post. I hope you come back again.

I do have a few questions/comments right now.

1. You cover how much would be contributed for each worker and it sounds like that entire amount will be put into accounts. So, where does the money come from that administers the plan? And, have you factored in the fact that our government won’t figure out a way to administer it that won’t require thousands of inept employees and mind-boggling layers of bureaucracy? (As a complete aside, as often as I use that word I shouldn’t have to spell check it every single time I use it.) Because, that is going to cause the cost of your plan to skyrocket.
2. You say that the employers will be contributing the entire amount. I really dislike that idea. People have to, HAVE TO, take some responsibility for themselves. Hell, we all move out of Mom’s house and start taking care of ourselves-we shouldn’t get a foster mom when we are adults.
3. Again, on the employer point-who pays for the contributions before a person starts working? Who pays the contributions of people who chose to be housewives (or househusbands)? How about the disabled or the chronically unemployed? Do people who live on government assistance their whole lives also get this retirement? If so, is it in addition to what they are already receiving or in place of what they are already receiving?
4. You said that all jobs contribute to society so all workers should receive equally. Now, I hate my job with a passion I didn’t know I had in me. If I had my druthers I’d be an upright bass player in a psychobilly band. But, I can’t play any music-not a lick. So, are you saying that I could quit my job as an auditor and become a musician, even if I have no aptitude or ability? Even if I was completely unsuccessful all of my life? I think there are a lot of people with no integrity that would jump all over that. I work hard at a job I hate because I want security and I know that no one owes it to me. Making everyone equal without regard to level of effort, difficulty, or talent is a morale destroyer, a pride killer, and a lazy-ass maker.
5. You say that a single person with no dependents dies then their retirement money goes back into the fund. I think you should cover all contingencies from the beginning, so: what about couples who chose not to get married or who are not allowed by law to be married? I was in that situation myself for 6 years until I finally tied the knot and know a couple that are legally prevented from getting married. What about people in these situations?

That is all I have right now. But, overall, I do like the plan. I’m interested to see your answers to my questions.

I think it is true about most preferring to complain rather than offer up a solution, and when a solution is offered up, the tendency is to look for its faults. That is all well and good, but if something is broken, you don’t just keep it broken. You fix it. And someone has to do the mending eventually, and someone has to have the ideas. The blogging community is full of thoughtful people, and while they don’t all agree, at least they propose ideas. Some of them do anyhow.

A PAC you say…that might be worth looking in to. I’ll let you know when the petition comes out! And I hear you about the mortgage thing. OUCH!

And if we are being very honest, many people are more fond of harping about rather than fixing or making suggestions about repairing the mess we are in.

All that said, I say Blog on Brother…as to running for office – here a pac, there a pac, everywhere a pac,pac – if they can get one, us mere mortals should be able to wrangle one together.

I’d sign the petition to get you on board the race. As to funding, I am probably as tapped out at you are. Just trying to pay the rent/mortgage in CA is killing us.