Tuesday, April 12, 2011

Means Testing Social Security and Medicare

Great post by Caplan riffing on a post by Posner about means testing Social Security and medicare.  My take is a little different on Social Security, I think that we should eliminate the SS tax give everyone over 65 the same amount as a welfare payment.  This would make the program more an insurance plan than a retirement plan.  It would be insurance against out living your savings and not having children that are willing and able to help you. It would reduce the burden on the young, who tend to be less wealthy than the elderly, and eliminate the burden on the working poor.

2 comments:

Martin Brock said...

Giving everyone over 65 the same amount as a welfare payment (whatever that is) would still be very costly, so I don't know how you're eliminating the tax.

Basically, I'd like to repeal SS in favor of a system in which children support their parents and non-parents invest otherwise. Or everyone invests and people supporting more children save a bit less than people supporting fewer children. Both forms of investment are risky, so people may pool these risks as they like.

JW Ogden said...

@Martin
I would eliminate the SS tax and raise the income tax to meet the need but the cost would be lower because everyone would get what is now the minimum payment.