So I have my complaints about Generation Greed, and believe we are heading for an institutional collapse, as discussed once again in my previous post. But is it the case that in the whole range of public policies, there are none that provide myself and my family with unearned and unfair privileges? No, I wouldn’t say that. And isn’t it the case that I have been relatively fortunate in my life? I have. So what am I willing to give up? For state and local government, since my epiphany at the moment that Eliot Spitzer signed the 25/55 pension plan for New York City teachers dooming the schools, the easy answer is nothing. That was proof positive that the more people put in, the more existing interests will go to Albany and take out, leaving things (after a period of cost deferral) worse than before.
But I don’t think that makes me a hypocrite, just a disappointed and increasingly cynical idealist. Looking to what I had said before that date, and to the federal government where the Obama Administration for the moment gives me a little bit of weakening hope, I have called (among other places on this blog) for the following:
Eliminating the provisions that favor homeowners in the New York City property tax (regardless of income), and replacing them with a statewide law that eliminates STAR but allows property taxes in excess of 6 percent of income (4 percent in NYC which has a local income tax) to be deferred to the time at which the property is sold, at a low interest rate (such as the 3-month T-bill rate).
The tax deferral would allow those with property wealth in excess of in their income (because they are unemployed, retired, or living in a neighborhood that was gentrifying) to wait until the wealth was cashed in to pay taxes. But it would in theory quadruple my property taxes (in reality they would rise perhaps 2 1/2 times because rates could be cut assessments rose, and real property values would fall as future buyers took higher taxes into account when making offers). In the suburbs and upstate, the limit would force overfunded school districts to provide better value, and the deferral would mean that farmers and seniors would not be forced out of their homes (with the richer of the latter paying state and local income taxes like everyone else under other proposals I have made.
Eliminating the specific promises of retirement ages and payouts under Social Security, and replacing them with a rule that the ratio of workers to retirees would be three, with people waiting to retire until there were enough behind them to support them, and the payment rising and falling depending on how well those still working were doing in their average pay. Social Security would be returned to a pay as you go status, and with the payroll tax admitted to be just a regressive tax rather than an insurance payment, it would either be made to apply from the first dollar of income to the last at a lower rate, or replaced with a VAT to shift from a regressive tax on work to a less regressive tax on consumption. (Replacing the progressive income tax with a regressive VAT would be a further injustice).
This would wipe out all unfunded liability in the Social Security program, and ensure that I and (assuming she outlives me) my spouse would receive benefits when we were in our late 70s and after, when we really needed it. It would also ensure the benefits of those less well off, and younger generations. The lower FICA rate would mean lower payroll taxes for those earning up to $100,000, but the elimination of the ceiling would hit those earning more (such as my wife). We would have to retire later, perhaps some time in our 70s after second, lower paid careers, something teachers looking to be paid to do nothing at 55 (the problem is the 55 not the 25) and transit workers looking to do nothing at 50 are not willing to do. And my generation and those after would have to accept that the Social Security trust fund, IOUs from our parents telling us that we too could benefit at the expense of our children, would instead be wiped off he books.
Making the cost of employer-funded health insurance, above a specific age-adjusted limit meant to match the cost of basic care, taxable income. Those limits would be adjusted upward based on the average wage in the U.S. , which means that tax-subsidized, which benefits you more the higher your income, would not consume n ever-rising share of U.S. public resources. Since both my spouse and myself are both fortunate to have health insurance, our taxes would rise. But that money could be used to ensure that those less well off could have access to basic health care, something the public employee unions (or should I say mafias) were NOT WILLING TO ACCEPT.
Accepting death. While others have clamored about death panels, I accept that I’m going to die eventually, and that there is a difference between health care one is allowed to pay for themselves and health care others are forced to pay for. I am prepared to accept that for tax funded or subsidized health care, the community – those footing the bill –should be allowed to say that given my remaining life expectancy, the odds of success, and my future quality of life even with success, a given medical procedure is not worth it. I’ll also skip the Viagra unless I want to pay for it, and after watching the outcome of the prior generation’s hip and knee replacements, I’ll just stick with wine, aspirin and a cane when the time comes. Though I wouldn’t call that giving something up.
Raising fares, automatically, on an ongoing basis. When the debts were lower and I though the transit system could be saved outside of bankruptcy, I called for setting the subway and commuter rail fares to cover the “auto-equivalent” costs of the systems. That is, the cost of maintaining, operating, and steadily replacing the subway and rail cars and collecting fares, including retirement benefits earned in a given year. The cost of retirements earned in the past but not funded, and the cost of debts incurred in the past, would not be included. When wages or pension costs went up, fares would go up with them, with the relationship between the two no longer hidden.
The rights of way and major business center stations would be maintained by the state with tax dollars, just like state roads, and the money paid by drivers would be considered “rent” paid to transit riders for giving up their share of those roads. The maintenance and staffing of local stations in residential areas would be paid for by local taxes, just like any public buildings that increased property values. Absent such payments, stations would be closed and skipped.
These are just some examples. We’re not looking to profit at other people’s expense in our family. And we haven’t – any excess money we have as a result of these deals, if in fact there is any net from the many other deals at our expense, has been given or way or saved, possibly to be given away in the future. We don’t want to live a lifestyle that is dependent on ongoing good fortune, let alone the misfortunes of others, and don’t want our children to get used to a lifestyle that they may find difficult to replicate in adulthood, and thus face disappointment or a temptation to go into debt. And yet I feel that we are flying the face of a cultural tsunami. And anything we give up, anything else we pay, would just be seized by those with a greater sense of entitlement and need, and merely forestall an institutional collapse.
So I’d rather give money to charity, which I have some control over, that pay more to or accept less from (in particular) the City and State of New York. I want any sacrifices to benefit those less well off than I am, not those better off (but with a greater sense of entitlement). And as for those debts, well, I didn’t want them, and I’m not willing to pay taxes for them if I can help it.