Hikes for Future Generations
Babies who can't even count yet have a nasty surprise coming once they start working and paying taxes.
If no changes are made in entitlements such as Medicare, younger taxpayers will have to cover unfunded promises of $35 trillion.
That means future generations, unless lawmakers can break the gridlock and agree to entitlement reform soon, will see massive tax hikes, massive benefit cuts -- or both. Sacrifice will be required either way, but analysts say the pain is greater the longer lawmakers wait.
"We are unwilling to cover those costs right now and therefore we're saying to our kids and grandkids -- we don't want to pay for it. We're going to have you do it," said Maya MacGuineas of the Committee for a Responsible Federal Budget.
John Goodman of the National Center for Policy Analysis agrees. "Looking to the future, a young person has to realize his taxes are going to increase enormously or the benefits will be cut enormously or we just go broke."
How much would taxes have to go up to cover promised benefits?
The Congressional Budget Office examined the issue and found young Americans could face staggering tax increases in decades to come.
The CBO reported that in order to keep entitlement benefits where they are, taxes would have to increase by 48 percent in 2030, and by a whopping 86 percent in 2050.
That would drive the top rate to more than 73 percent, the highest since 1980.
Corporate rates would also have to increase from 35 to 65 percent.
Charles Blahous, a trustee of Social Security and Medicare, said "it's clear you do have to make some type of explicit tax increase, if you don't change the benefits of those programs specifically."
That is why the CBO wrote that without those additional revenues, the cost of entitlements "will increase federal debt to unsupportable levels."
Advocates for entitlement programs, however, say Americans reject any changes to benefits.
Alex Lawson, of "Social Security Works," said "we represent the view that's held by the vast majority of Americans, independents, Republicans, Democrats. And they say absolutely no benefit cuts to Social Security or Medicare or Medicaid"...
But some lawmakers point out the nation is undergoing a massive shift of resources from the young, even the unborn, to a growing body of seniors, who are living longer and longer.
"Right now, for every dollar we spend on the young people, we are spending $4 on seniors," Sen. Bob Corker (R-TN), told "Fox News Sunday." "Right now, in Medicare, the average person pays for one-third of the cost of the Medicare program."
The rest comes from taxpayers.
"So we're paying a greater share of Medicare benefits than we ever intended," MacGuineas said. "And right now we have no plan and no ability to pay for all the promises looking down the road."
And the longer the nation waits to fix entitlements, the more painful the fixes will have to be.
READ FULL SOURCE ARTICLE: 03/07/2013
Editor's Note: No one wants to cut benefits, but just as it would be unfair for those who paid in to get screwed, so, too, is it unfair for future generations to get screwed because the current generation didn't fix what they broke. How did they break it, you ask? Simple. They voted for the people who pillaged the "lockbox." In the end, those who elect the spendthrifts are responsible for their actions...
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