Chapter 6: Funding the Public Sector

Web Links

Marginal URLs:

p. 139: Go to http://www.ncpa.org/pi/taxes/tax7.html to learn from the National Center for Policy Analysis about what distinguishes recent flat tax proposals from a truly proportional income tax system. Next, click on "Flat Tax Proposals."
p. 149: Go to http://www.ssa.gov to learn more about Social Security at the official Web site of the Social Security Administration.

Issues and Applications—Web Resources:

To see the latest Internal Revenue Service statistics on U.S. income tax rates paid by different income groups, go to http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html.
For information about the increasing share of income earners who owe no federal income taxes at all, go to http://www.taxfoundation.org/news/show/1410.html.

Economics on the Net:

Social Security Privatization

There are many proposals for reforming Social Security, but only one fundamentally alters the nature of the current system: privatization. The purpose of this exercise is to learn more about what would happen if Social Security were privatized.

Title: Social Security Privatization

Navigation: Go to http://www.socialsecurity.org/ to learn about Social Security Privatization. Click on FAQ on Social Security in the left-hand column.

Application: For each of the three entries noted here, read the entry and answer the question.

Click on Is there really a Social Security crisis? According to this article, when will the system begin to experience difficulties? Why?
Click on What about raising the tax cap? What does this article contend are the likely consequences of applying the Social Security payroll tax to more of a person's income? Why?
Click on What about personal accounts in addition to Social Security? Why does this article argue that simply adding personal accounts will not solve Social Security's problems?

For Group Study and Analysis
It will be worthwhile for those not nearing retirement age to examine what the "older" generation thinks about the idea of privatizing the Social Security system in the United States. So create two groups–one for and one against privatization. Each group will examine the following Web site and come up with arguments in favor or against the ideas expressed on it.

Go to http://www.ncpa.org/pub/ba/ba417/ to read a proposal for Social Security reform. Accept or rebut the proposal, depending on the side to which you have been assigned. Be prepared to defend your reasons with more than just your feelings. At a minimum, be prepared to present arguments that are logical, if not entirely backed by facts.

Taking into account the characteristics of your group as a whole, is it likely to be made better off or worse off if Social Security is privatized? Should your decision to support or oppose privatization be based solely on how it affects you personally? Or should your decision take into account how it might affect others in your group?

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