Monday, September 19, 2011

Is means testing FICA-based Social Security a form of "expropriation"?

Here’s a wrinkle in thinking about any future means testing and Social Security.

If you don’t pay social security benefits to someone who paid the actuarially necessary amounts into FICA (including spousal and employer contributions) because of his/her current salary or accumulated (or even inherited) assets, you’ve basically committed expropriation.  If you repudiate a debt, that’s expropriation, too. 
The radical Left used to talk about repudiation and expropriation as tools of “revolution”.

Moderate tax increases, especially related to ability to pay, related to a need to reduce debt or build public infrastructure, is not “expropriation”, even though some radical members of the Tea Party might see it that way.  Making sure that the “rich” pay at least at the same rate as the middle class is not expropriation.

The concept is hard to define, but I know it when I see it. 

Update:

There are reports mid-day Monday that President Obama is proposing "means-testing Medicare". The best I can find is on p 35 of a WhiteHouse report where it is proposed that, by 2017, wealthier seniors pay more and receive fewer benefits for some Medicare services, and accept incentives for less "knee-jerk" treatments, link here.

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