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Response to eniwetok (Reply #52)

Wed Mar 30, 2016, 03:18 PM

53. The obligations are independent of the income stream.

 

The exact same amount of money needs to come out of the general fund regardless of what rate is selected. The source of that revenue is the same regardless of the status of the "trust". The rate is irrelevant because it doesn't change anything. It could be 100 trillion dollars and every penny would still come from increased taxes and/or austerity.

To explain the shift in the tax burden:
The funding obligations are fixed by legislation. The "surplus" is used to offset progressive marginal income taxation. It replaces progressive marginal income taxation with regressive taxes on workers. Shifting the tax burden from people who would have paid a higher effective rate on income to hourly workers whose taxes were effectively increased.

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