March 16, 1977

Let Old Folks Help Themselves

The most frustrated Americans these days have to be older folks trying to take care of themselves.

Their government hampers personal efforts of self help but is unable to do the job itself.

This situation is the more tragic in that it need not be.

A steady increase in inflation, of course, is the most noticeable obstacle to old age independence.  However, there is a complex of other factors little noted but just as aggravating:

• Confiscatory inheritance taxes.
• Unfunded social security taxes.
• Over-reliance on property taxes.

Congress professes great concern for the plight of our so called "senior citizens," yet adopts policies that eat up the nest eggs so difficultly accumulated during their active working years.

The best insurance against the vicissitudes of old age is loving children carrying on a family business.  It used to be the American dream to build a successful store, farm, or shop which the sons and daughters could take over to finance their own start in life and the golden years of the parents.

Over the years, Congress has steadily raised inheritance taxes under the guise of breaking up the huge fortunes of such families as the Fords, Rockefellers and DuPonts.  But the rich took refuge in tax deferral shelters while the struggling families went under.

Finally, last year, Congress moved to give "relief" to the small family business by lowering the tax at the death of the first spouse, but increasing the tax for children surviving the second parent.  Now the only way to satisfy Uncle Sam's greed is to sell the business and give it to the tax collectors.  The surviving children are lucky if the proceeds cover the tax lien and they don't have to obligate their own savings.

Social security is a cruel hoax that promises a dignified retirement but imposes a set of rules leading to poverty and helplessness.

The hoax is established on the premise that contributions of taxes during an active working life will be returned with interest after retirement.

The second part of the deception is that these social security payments will enable the recipient to continue living at virtually the same standard without any further efforts to provide for himself.

Retirees have learned belatedly that their contributions to social security went to pay benefits of those who retired ahead of them.  Current benefits must come from workers now employed, and that source is shrinking.

Having bungled social security funding, Congress sought to meet the unrealistic expectations with increased benefits automatically tied to inflation.  The result is double inflation hastening social security bankruptcy to 1983 at the present rate.

In addition, the penalty for retirees working to supplement their inadequate pension has been made stiffer.  The choice has become: starve slowly or give up social security rights and go back to work full time - if you can.

The traditional hedge against old age economics was a paid-up home.  At least we wouldn't be pushed off into strange boarding houses or hounded for rent.

Alas, that provision also has been shattered by the heavy burden of property taxes.  The amount of taxes no longer is a tolerable part of household expenses but a major percent of tiny pensions.

What can we do to save our old folks and prepare for our own retirement?

Simple.

Fund social security on an insurance basis with your money paying your benefits.  The system was originally set up this way but the funds were confiscated by the government to help pay for World War II.  Remember the popular argument for this fundamental weakening, "It's OK, we owe it to ourselves"?

Eliminate inheritance taxes for small family farms and businesses so that we can with initiative take care of both ourselves and our children.

Cut property taxes - preferably by cutting government spending, or, failing that, by shifting the tax burden to working incomes.  This encourages citizens to undertake home ownership and preserves the facility for old age security.

Finally, we can insist that our government stop printing unsecured paper money to finance its deficits.  Inflation is precisely that money tossed into the economy without being earned.  Only the government has the privilege of printing money, and only the government has the power to put worthless money into circulation.

The secret debasement of money presents a problem to workers that can be managed with hard work and pay raises.

Those not in the active work force are robbed with no chance to recuperate.

There is time yet to demand that our government back off and let us provide for ourselves.  But the time grows short.

Author: Lindsey Williams