Let's be clear to start: We can't trust the Republicans to be honest, or Bush and his Evil Minions™ to be competent.
So, let's play economists, and assume competent and honest people involved, and come up with a Democratic Party private account/save social security proposal.
The first step is the solvency of Social Security.
You achieve this by doing two things:
- Remove the earnings cap, probably phasing it in.
- Change the rules so that everything that might be construed as wages (incentive stock options, special retirement plans, merger buyouts, etc.) is taxed.
In a perfect world, it would apply all income without deductions, but that won't fly.
We've solved the Social Security solvency problem.
Now on to private accounts:
The problem is not with the well off, who can afford to save, it is with the poor, who cannot.
A percentage system will benefit the rich, so go another way.
Here's how my system would work: for EVERY HOUR THAT YOU WORK, a set amount of money goes into a government managed savings program from excess social security revenues.
(more below the fold)
I would suggest starting small, since however it will be implemented, I think that you will end up with horror stories of waste, corruption, self dealing, etc.
By small, I mean about $0.50/hour. For an ordinary worker, this would come to about $1000/year.
It doesn't sound like much, but over 35 years (age 25 to 60), it would net about $41,600.00 at 1% above inflation, $50,000.00 at 2%, $60,500 at 3%, $73,600 at 4%, $90,300 at 5%, and $111,400 at 6%.
It's not chicken feed, and for someone who has saved nothing, the 3% return would give about $5000/year, or about $100/week in additional income over the next 15 years.
Of course, we have to FUND this, and while think that removing the FICA cap will do this, I would add the following to increase revenues: reduce the maximum contributions to tax-deferred savings by the same amount.
It won't cover it all, but it will cover a lot.
The best part is that the Republicans heads will explode as they attempt to argue against giving every working man or woman in the United States $1000/year.
Put that in your gay prostitute masquerading as a journalist and smoke it.