Let’s not miss the big news in today’s article in the Times about Dick Cheney. The vice president supports putting over 95% of the employee-side contribution to Social Security into private accounts.
Unfortunately, the authors construct the sentence in a somewhat murky fashion. But the key passage is this one: “Mr. Cheney is said by associates to favor creating investment accounts into which workers could deposit 4 percent to 6 percent of their earnings that are subject to the Social Security payroll tax.”
In orther words, Cheney supports putting 4 to 6 percentage points of each individual’s 6.2% contribution into a private investment account and taking it out of the Social Security system.
(Just for maximum clarity, that means about 97% of the employee’s payroll tax contribution, which is 6.2% of their salary up to $90,000. And it’s about 48% of the total Social Security money going into the program for the given individual since the employer also kicks in another 6.2%.)
So, in other words, the initial ‘partial’ phase of the Social Security phase-out, turns about to be 50% phase-out. And the only money going into Social Security comes from the employer. How long do you figure that lasts?
