Personal Savings Accounts are the Key to Real Social Security Reform.  Personal savings accounts would create private property - allowing all Americans, including gays and lesbians, to pass on accumulated assets to anyone they choose.  Personal savings accounts provide basic fairness for gay and lesbian couples, by allowing them to pass on a portion of their hard earned tax dollars to their surviving partner - something they are prevented from doing today.  Personal savings accounts would also provide higher returns, create wealth, empower individuals to control their own retirement, and improve the U.S. economy.

Support Ryan - Sununu Plan to Save Social Security.  The Ryan-Sununu social security legislation allows workers to devote to tax-free personal savings accounts 10 percentage points of the current 12.4% Social Security payroll tax on the first $10,000 of wages each year. On taxable wages above that, they can shift 5 percentage points of the 12.4% tax to their accounts. On average, workers would be dedicating 6.4 percentage points of the Social Security payroll tax to their accounts. This progressive account structure allows lower income workers to keep more of their FICA taxes in their personal account than higher income workers.  Those choosing to participate in personal accounts would have a selection of investment options that are regulated for safety and soundness – similar to the way the Thrift Savings Plan for federal employees works today. The federal government would back the personal accounts with a guarantee that workers receive at least as much as Social Security promises under current law, providing an added level of security for workers’ retirement savings. The Chief Actuary of Social Security has already scored this legislation as achieving permanent solvency for the program, without benefit reductions or tax increases.

This legislation, sponsored by Senator Gordon Smith (R-OR), would end the double taxation of domestic partner benefits provided by employers.  Under current federal law, married heterosexual employees do not pay taxes on their employers’ contribution for health insurance benefits, while gay and lesbian employees do.  Additionally, because employers must pay payroll taxes on their employees taxable incomes, employers who provide these benefits are taxed at a higher rate as well.  Permanent repeal of the death tax would benefit gay and lesbian couples.  Married couples are allowed a “marital deduction” that shields assets from taxation when one spouse dies.  Gay couples are prevented from receiving such protection.  As a result, without permanent repeal, gay couples could be subject to the death tax twice.