It’s even a step toward my goal of privatizing Social Security.  Tom Giovanetti, Institute for Policy Innovation President wrote of an idea for an additional tax cut in Wednesday’s Wall Street Journal.

[I]nstead of an impotent income-tax cut or, say, a payroll-tax cut of 4% of income, why not redirect that same 4% into personal retirement accounts for every worker? … With no decline in disposable income, American workers would suddenly be investing for retirement at market rates in accounts they own and control, instead of relying on Congress to keep Social Security solvent.

Giovanetti estimated, with an heroic assumption and some unspoken assumptions, that such an account for a family of four would accrue a half million dollars by the time they retired.  The assumptions, though, only affect the details, they don’t impact the utility of the principle: the retirement money would be in the hands of the persons doing the saving, for their own future retirement, instead of being redistributed, on the instant, to already retired strangers somewhere else in the country.

But, but—IRAs and 401(k)s already exist.  Sure, and they’re largely inaccessible to the low-income folks who’ll need retirement funds the most.

The painful truth is that low- to middle-income earners find it difficult or impossible to save adequately for a rainy day, much less for retirement.

But these low- to middle-income earners already are contributing to someone else’s current retirement through their payroll tax.  This “tax cut” has the advantage of diverting some of that already committed money to their own future, without reducing their take home pay by a single red cent.  And they’ll certainly do a better job of investing than Uncle Sugar has.  In addition to which, the future availability of that retirement fund of their own won’t be harmed by the declining numbers of working stiffs paying into Social Security—paying into current retirees’ funding—that threatens Social Security today.

Yes, it complexifies things.  But getting this interim step taken is worth the complexification—which isn’t that great, anyway.  Americans—especially those of us who work for a living—aren’t stupid.

Beyond this cut, there’s an additional one that especially favors the poor and lower income folks, and so makes our tax code more progressive, and so is a cut that even Progressive-Democrats can favor.  Cut/divert the payroll tax for Medicare commensurately, with those funds put into a MediSavings Account for the benefit of and owned and operated by the taxpayer involved.