John B. Shoven
I remain convinced that the best way to reform Social Security is to introduce a two-part system that combines the advantages of defined-benefit and defined-contribution systems. In this very brief rejoinder, however, I want to take issue with only one aspect of Aaron Response. He states that I favor plans that raise taxes the most, that Tobin looks forward to raising payroll taxes by 4 percentage points, and that Cutler also wants higher taxes. These statements are simply not accurate. None of us desire higher taxes or even propose higher taxes. What we desire and propose are measures to bring about higher personal and national savings. We propose mandatory individual saving accounts as a second tier in the Social Security program. Payments to your own account, even if mandatory, are not taxes. The money is held in your name and will benefit you and / or your beneficiaries. You manage the money and receive quarterly statements about its status. To differentiate this program from a tax increase, simply ask yourself when the government allowed you to designate how you would like your taxes invested for your benefit. The answer, of course, is "never."