A couple weeks ago Arvonne Fraser wrote here that we have a need to rebuild Social Security and ensure that it will be an effective net in the future. Robert Reich, at www.prospect.org, agrees that there is a problem. He has written...
A couple weeks ago Arvonne Fraser wrote here that we have a need to rebuild Social Security and ensure that it will be an effective net in the future. Robert Reich, at www.prospect.org, agrees that there is a problem. He has written of the failure of Americans to save and suggested that this is ultimately a problem of falling real wages in an economy leaving working class people behind. The problem at hand is simply stated, both government and the economy are pulling the rug out from under regular Jane and Joe America. What to do?
At Growth and Justice, a local think tank, they’ve done a great job of advocating a fix to the tax code. Basically it states that our Minnesota tax is code is inherently regressive. At the Federal level income taxes remain progressive, but the wealthy are receiving the biggest cuts, less than 1% for the lowest income brackets compared to nearly 4% for the wealthiest (see the current www.Economist.com, but the story is behind the pay wall). We’re squeezing our citizens future by over-taxing in the near term, and under-serving in the long-term.
Recently The Economist also published an article about the growth of soft paternalism. The premise was to allow people the same freedoms, if not more, that we carry today, but provide more encouragements. For example, rather than opting into 401k programs, companies could be required to provide them, employees would be automatically debited 4% to 8%, but all would be allowed to opt out. You still get to shoot your paycheck in the near term if you like, but perhaps you’ll be too lazy to make the switch.
This may not be the best solution, and certainly doesn’t provide any guarantees. However, it may be an excellent compromise between people who don’t want to have to worry about the future, and those folks who like to double down.
Jeremy Wieland
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