Occupy Wall Street is struggling to come up with a plan to remedy the fact that 1% of the world’s population owns 40% of its wealth. The demonstrators in Zuccotti Park have an intuition that the other 99% deserve a better deal – like a one-night stay in a five-star hotel or a one-carat diamond on their ring finger or smartphones that offer water damage insurance — but they cannot put their finger on a simple plan with the appeal of Herman Cain’s 9-9-9 plan.
What Occupy Wall Street is searching for is ‘Youth-Based Taxation’. Young people should pay lower taxes than old people. Young people need money more than old people. Young people don’t own houses or cars or stocks, simply because they haven’t had time to accumulate such things. Plus young people invest a lot of money in sexual selection in the form of clubs, clothes, cabs and inhibition lowering substances.
According to academic studies, the 65 to 74 age group is the wealthiest cohort in our society, while the 18 to 27 cohort is the poorest. A recent analysis of the 2010 Census revealed that the average 65 year old is worth 47x more than the average 25 year old. Occupy Wall Street should be Occupy Retirement Community.
To mitigate this inequality gap, the government should exempt anyone under the age of 30 from Social Security and Medicare payroll contributions. That would put 7.65% more cash in the pockets of young people in 2012 and save their employers a like amount. Exempting young people from payroll taxes would make them cheaper to employ than old people and create lots of entry level jobs.
For the self-employed, such a scheme is even more attractive and would save them 15.3% of their youthful income. That is a lot of scratch when you are young and poor.
Exempting young people from Social Security and Medicare contributions is fair. By the time, this cohort retires at 70+ in 2060, the Social Security and Medicare funds are forecasted to be insolvent. Why make a whole generation contribute to a retirement scheme that won’t be there when they need it? Plus 40 years of contributions from ages 30 to 70 (I assume that the retirement age will be at least 70 in 2060) should be enough forced savings for a retirement safety net.
If a total exemption is too much for you, at least roll back Social Security contributions to the 1960 level – 3% for individuals and 3% for employers or 4.5% for the self-employed – the level of contributions paid by current retirees when they were young. (There was no Medicare contribution until 1966.)
Think about it. The US personal savings rate was 4.5% in August 2011 according to the Commerce Department. Dropping young people to the 1960 Social Security contribution rate would be of the same magnitude – i.e., give them 4.65% more money in their pockets to save for a down payment for an apartment, house or car. And what this economy needs right now is young people renting apartments, buying houses and releasing cars — maybe even having babies, hence the importance of funding sexual selection.
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