General Discussion
In reply to the discussion: Let's try this again: No, Social Security is NOT insolvent. [View all]muriel_volestrangler
(101,265 posts)But Reagan persuaded a Democratic House, in the early 1980s, to go for the FICA increases instead.
If Social Security had remained as 'pay as you go', then, from now on, the FICA rates would have to be higher than they are now (or benefits cut); or general taxation would have to pay for part of it. Since a lot of the imbalance is due to the population bulge of the baby boom, it did make sense to share out the burden across the years by increasing the FICA rate earlier, so that the higher rate was paid by both baby boomers and their successors, rather than an even higher rate by just the successors.
If paying out Social Security is viewed as a basic function of government keeping retired people in an adequate state of living, then there's a good case for saying "forget payroll taxes; we'll take it all from income tax, and other government revenue based on ability to pay, such as corporate taxes". But if it's viewed as an entitlement based on what a person has paid in (and, since the benefits are based on lifetime and maximum earnings, that is how it's viewed), then the argument that Social Security should be paid for from specific contributions based on those earnings is pretty sound.