KEN STREMSKY DISCUSSES SOCIAL SECURITY, MEDICARE, AND TAXATION

      THE SOCIAL SECURITY TAX

      Jack Kemp discussed Social Security in a letter in the 
      July 12, 2004 The Wall Street Journal on page A17.  He is
      Co-Chairman of the Alliance for Retirement Prosperity.  He
      discusses how money in the Social Security trust fund is
      being used to fund government programs that have nothing
      to do with Social Security.  The website for the Alliance
      for Retirement Prosperity.  The website discusses how the
      Organization believes Social Security should be fixed and
      why the organization believes it will make retirements
      for many Americans more secure.  I highly recommend that
      people who want to have decent retirements check it out.
      If changes are not made in Social Security, I doubt it
      will be beneficial when people born in 2004 retire.

      The money in the Social Security Trust Fund should be used
      only to fund Social Security programs.  

      The money in the Medicare Trust Fund should only be used to
      fund Medicare programs.
     
      In 2002, the social security tax was 6.2 percent and it was placed on only 
      the first $84,900 in wages a person made in a year.

      Tne May 11, 2002 Financial Times has an informative editorial with the 
      title "The wages of longevity."

      The social security tax is the highest federal tax that people who make 
      under $20,000 a year pay.  The suggestions I make in this section will 
      decrease the probability that the social security tax will be increased on 
      people who make under $20,000 a year.

      The social security tax should not be greater than five percent for 
      individuals.

      The social security tax should be placed on all wages a person makes in a 
      year.  The social security tax should not be placed on interest from 
      savings accounts, dividends, capital gains, and estates.  If a person 
      makes a million dollars in wages in a year and the social security tax is 
      five percent, the person would pay a social security tax that is $50,000.  


      If an employer pays an employee stock options, the gain from the sale of 
      the stock options should be treated as wages.  If an employee receives a 
      profit of nine million dollars by selling stock options for 10 million 
      dollars that the employee paid one million dollars, the employee should 
      pay a social security tax of $450,000.

      Businesses should match the social security tax contributions made by 
      their employees on the first $100,000 in wages an employee makes in a 
      year.  Businesses should not have to match the social security tax
      contributions on wages above $100,000.01.

      Businesses should pay a three percent social security tax on yearly profits 
      above $10,000,000.01.

      The social security tax should not be greater than three percent on the 
      first $20,000 in wages a person makes in a year.  A lower social
      security tax placed on wages less than $20,000 a year may encourage
      businesses to hire more people who make under $20,000 a year and
      may increase the pay of many people.

      Social security benefits should not be taxed.

      I hope the earnings test will never again be placed on people who are at 
      least 65 years of age.  

      I would prefer that an individual who makes more than $100,000.01 in a 
      year not receive money from the Social Security Administration that year 
      before the "normal retirement age" of 65 is increased.

      The "normal retirement age" for social security should stay 65.  Black men 
      are less likely to make it to 65 years of age than white men.

      People should be allowed to invest at least twenty-five percent of their 
      social security tax into mutual funds and stocks.

      People who want to privatize Social Security should remember that 
      social security has a disability component.  People are more likely 
      to become disabled than they are to die.  People sometimes get 
      disabled when they are young.  People may want to buy private 
      disability insurance separate from any disability insurance an 
      employer might offer.

      People will not need to obtain as much money from the Social Security 
      Administration if the Federal Government stops taxing interest from 
      savings accounts, dividends, and capital gains.

      Allan Sloan who works for Newsweek wrote a great article in the August 13, 
      2001 issue with the title "A Simple Social security Solution."  The 
      article discusses allowing the Social Security Administration to buy 
      federally backed mortgages which are backed by the Government National 
      Mortgage Association which is also known as Ginnae Mae.

      THE FOLLOWING INFORMATION DEALING WITH SOCIAL SECURITY WAS ADDED ON
      SEPTEMBER 7, 2004.

      IT MAY BE A VERY GOOD IDEA TO NOT HAVE BUSINESSES MATCH SOCIAL
      SECURITY CONTRIBUTIONS ON WAGES ABOVE $50,000.01 A YEAR.  THIS
      WILL HELP SELF-EMPLOYED PEOPLE AND SMALL BUSINESSES 
      SIGNIFICANTLY.  THIS MAY CREATE JOBS AND INCREASE THE PAY OF 
      MANY EMPLOYEES.

      AS THE FINANCIAL SITUATION OF THE SOCIAL SECURITY SYSTEM IMPROVES
      THE MAXIMUM AMOUNT OF WAGES THAT THE SOCIAL SECURITY TAX IS
      PLACED ON SHOULD BE REDUCED.  SOME DAY, I HOPE THE MAXIMUM 
      AMOUNT OF WAGES THE SOCIAL SECURITY TAX IS PLACED ON WILL BE
      $50,000.

      THE THREE PERCENT SOCIAL SECURITY TAX ON YEARLY PROFITS ABOVE   
      $10,000,000.01 SHOULD PROBABLY NOT BE IN PLACE FOR MORE THAN 
      TEN YEARS.

      MEDICARE

      Congress should have Medicare cover routine dental care, hearing aids,
      and eyeglasses.  Many health problems are first diagnosed during
      visits to dentists.  Proper care of teeth may decrease the need for
      more expensive health care services in the future including services
      needed for heart disease.

      Medicare should pay for routine physical exams because the exams
      may reduce the need for more expensive health care services in the
      future.

      In 2002, the medicare tax was 1.45 percent.

      The medicare tax should be placed on all wages a person makes in a year.  
      The medicare tax should not be placed on interest from savings accounts, 
      dividends, and capital gains.

      Businesses should match medicare tax contributions made by their    
      employees on the first $100,000 in wages the employee makes in a year.
      Businesses should not have to match contributions on wages above
      $100,000.01.

      The medicare tax should never be greater than five percent for 
      individuals.

      The medicare tax could be two percent on the first $50,000 in wages a 
      person makes in a year.

      The medicare tax could be three percent on wages made between $50,000.01 
      and $100,000.

      The medicare tax could be five percent on wages made above $100,000.01 a 
      year.

      Businesses should pay a two percent medicare tax on yearly profits above 
      $10,000,000.01.

      Prescription drugs should be covered by Medicare.  Medicare might want to 
      charge Medicare's participants who make more than $20,000 a year a $5 or 
      $10 co-pay for each prescription.

      I would like Medicare to be more like the Federal Employees Health 
      Benefits program which is discussed at 
      http://www.opm.gov/insure/health/index.htm

      There should be just one Medicare drug discount card and Medicare
      beneficiaries should not have to pay for the card.  People who have
      a Medicare drug discount card should not be charged more than an
      amount for a prescription drug that Medicare sets.  The price that
      Medicare sets should be good for at least one month.  Medicare should
      be able to change the prices it sets for a prescription drug up to
      12 times a year.

      THE FOLLOWING INFORMATION ON MEDICARE WAS ADDED ON SEPTEMBER 7, 2004.

      IT MAY BE A VERY GOOD IDEA TO NOT HAVE BUSINESSES MATCH MEDICARE
      TAX CONTRIBUTIONS ON WAGES ABOVE $50,000.01 A YEAR.  THIS WILL
      HELP SELF-EMPLOYED PEOPLE AND SMALL BUSINESSES.

      AS THE FINANCIAL SITUATION OF THE MEDICARE SYSTEM IMPROVES THE
      MAXIMUM AMOUNT OF WAGES THE MEDICARE TAX IS PLACED ON SHOULD
      BE REDUCED.  SOME DAY, I HOPE THE MAXIMUM AMOUNT OF WAGES
      THE SOCIAL SECURITY TAX IS PLACED ON WILL BE $50,000 A YEAR.

      THE THREE PERCENT MEDICARE TAX ON YEARLY PROFITS ABOVE  
      $10,000,000.01 USED TO FUND MEDICARE SHOULD PROBABLY NOT BE 
      IN PLACE FOR MORE THAN TEN YEARS.

      FEDERAL TAXATION

      The taxation system I describe may increase living standards in the United 
      States of America and help people be less dependent upon governments.  The 
      taxation system will probably need to be adopted gradually over a ten year 
      period of time.  The first $50,000 in interest from savings accounts that 
      an individual and/or business earns in a year should immediately be tax 
      free.  The first $50,000 in dividends that an individual and/or business 
      earns in a year should immediately be tax free.  The first $50,000 in 
      capital gains that an individual and/or business earns in a year should 
      immediately be tax free.

      The United States of America might consume a lot less electricity if more 
      homes and businesses use flourescent light bulbs.  The Federal Government 
      should allow people and businesses to deduct the full cost of flourescent 
      light bulbs from their federal taxes.

      People usually do not need as much assistance from governments when taxes 
      are lowered.

      People are less likely to need money from Social Security after they 
      retire if they are taxed less during their working years.

      After Congress reduced tax rates in the early 1980s, tax revenues 
      increased significantly.  The Federal Debt increased significantly because 
      spending increased at a faster rate than the rate that revenues increased.

      People who want to raise taxes on the rich should remember the following.  
      When taxes are increased on the rich, their consumption decreases.  When 
      the rich buy fewer boats, the people who make the boats lose their jobs.

      The amount of capital available to individuals and businesses will 
      probably increase after taxes are decreased.  When the amount of capital 
      increases, the cost of capital will probably decrease.

      Individuals and businesses should not have to pay estimated taxes.  
      Individuals and businesses should only have to pay taxes on a quarterly 
      and/or yearly basis on money they have actually made.

      The alternative minimum tax should be eliminated.

      Individuals and businesses should have the same basic tax rates.  Congress 
      may also want to use tax incentives.

      No income tax on yearly income earned below $20,000.

      Five percent tax on yearly income earned between $20,000.01 and $50,000.

      Ten percent tax on yearly income earned between $50,000.01 and $100,000.

      Fifteen percent tax on yearly income earned over $100,000.01.

      Interest from savings accounts and dividends should not be taxed because 
      people should not be punished for saving and investing. 

      Businesses should be allowed to deduct dividends they pay out from their 
      taxable income because this will encourage them to pay out more in 
      dividends.  I read this idea on Slate.com.

      The capital gains tax should be eliminated because people should not be 
      punished for investing.

      The estate tax should be eliminated because governments should not benefit 
      financially when a person dies.

      The June 5, 2002 Wall Street Journal on page D1 has an article with the 
      title "FedEx Delivers:  Its Small New Dividend Gives Hope That More Firms 
      Will Follow" by Jonathan Clements.

      Congress should pass a law which says that if a business pays out at least 
      50 percent of its operating earnings in a year in the form of dividends 
      the business should not have to pay a federal tax rate that year greater 
      than ten percent.

      NATIONAL SECURITY TAX

      Congress should place a four percent National Security tax on the yearly 
      incomes of individuals greater than $100,000.01.

      Congress should place a six percent National Security tax on the yearly 
      profits of businesses greater than $10,000,000.01.

      The National Security tax will help the Federal Government pay for the 
      United States military, Homeland Security, FBI, CIA, and NSA.

      The National Security tax should not be placed on interest from savings 
      accounts, dividends, capital gains, and estates.

      HEALTH CARE TAX

      Congress should place a one percent health care tax on the yearly incomes 
      of individuals greater than $100,000.01.

      Congress should place a two percent health care tax on the yearly profits 
      of businesses greater than $10,000,000.01.

      The tax will help the Federal Government pay for health care.

      The health care tax should not be placed on interest from savings 
      accounts, dividends, capital gains, and estates.

      EDUCATION TAX

      Congress should place a one percent education tax on the yearly incomes of 
      individuals greater than $100,000.01.

      Congress should place a two percent education tax on the yearly profits of 
      businesses greater than $10,000,000.01.

      The education tax will help the Federal Government pay for education.

      The education tax should not be placed on interest from savings accounts, 
      dividends, capital gains, and estates.

      SUPERFUND TAX

      You may find information on Superfund at www.epa.gov.

      Congress should place a one percent Superfund tax on the yearly incomes of 
      individuals greater than $100,000.01 to help the Federal Government 
      cleanup Superfund sites, dispose of hazardous wastes, nuclear wastes, and 
      other types of waste.

      Congress should place a two percent Superfund tax on the yearly profits of 
      businesses greater than $10,000,000.01.

      The Superfund tax should not be placed on interest from savings acounts, 
      dividends, capital gains, and estates.