The Social Security System collects funds from all employees at a rate of 4.2 percent (part of a temporary tax cut by the Obama administration) and from employers at a rate of 6.2 percent with a cut off at $106,800.

Removing the Social Security income cap on those whose yearly income is above $106,800 can help significantly solve the current Social Security crisis.

Presently, the system is unfair because middle-income families bear the greater portion of the burden to pay for Social Security. Eliminating the cutoff point for Social Security payments is very fair and justifiable.

I suggest a pay-as-you-go system that would levy a flat rate tax of 3.1 percent for all income earners and employers.

In a way, because of the squandering of the Social Security trust fund, we are already on a pay-as-you-go system. The Social Security trust fund is merely an accounting device filled with IOUs that future taxpayers must repay.

The only way the Social Security system can recover these funds back is by levying a payroll tax on everyone. Lowering the payroll tax to middle-income families to 3.1 percent would leave these funds in the people’s hands. The shortfall would be covered by levying the tax on those making more than $106,800.

There is another great benefit of creating a pay-as-you-go Health Care System and the Social Security System, which is you can write off Five Trillion Dollars of the National Debt. The gross national debt is approaching fifteen trillion dollars, which is composed of ten trillion in public debt and five trillion of held by government acccounts, the largest being Social Security fund and the federal government retirement funds.

Since we owe ourselves 5 trillion it makes common sense that it should be netted to reduce the deficit. We would be writing off only the obligations which we owe to ourselves, and could only be made up by taxing this generation, the next generation and the generation after that. It is more important we leave these funds in the people’s hands and they use them as they see fit.

Then, the funds currently collected from these taxes would be used for Social Security payments. And the revenues raised from the payroll tax cannot be used in any manner to supplement any other expenditure.

A pay-as-you-go system is as close to a balanced budget amendment you can get.

Yours Truly,

Roy J. Meidinger