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| Puppyroach said: Put how can it possibly be privatized when it is funded by the government through taxes? I know that line is very blurry a lot of the times but I find it fascinating that we in this day and age call systems where the government basically gives corporations social welfare "privatization". The reasons this system in Australia succeeds (not to sure it has, the article and graphs give way to little information) is because the government has taken the funding of the social security system out of the budget process in a way. It doesn't have to compete with funding of other public areas in the same way as before. The solution would instead to keep it within the government but secure it funding so that defence spending for example, doesn't cut into social security. |
Because the resources aren't shared, as you noted. It's private in the same way the Affordable Care Act's employer and individual mandates are private when compared with single-payer health-care. Really instead of taxing you, they are forcing you to lock away a part of your money. Social security on the other hand is a pooled fund in which everyone's money (raised by payroll tax) is managed by the government, and then the government pays you back what it thinks it owes you.
You/your employer is paying for the 401 k, not the government in this scenario. So I guess it really can't be called a payroll tax, but it is for all practical purposes a payroll tax as you can't freely use the money how you wish. It is just a tax that the government never touches (in never actually goes through government treasuries.)
