Document Type

Response or Comment


Retirement Security and Tax Policies: A Reply, 137 University of Pennsylvania Law Review 1239 (1989)


In an Article published in the April 1987 issue of the University of Pennsylvania Law Review, I urged that the three major components of this nation's retirement income system—Social Security, and income tax preferences for both employer-sponsored pension plans and individual retirement savings—be analyzed as a comprehensive national retirement income security program. I demonstrated that such an integrated view of this tripartite retirement security system reveals serious problems both with Social Security and with the generally applauded "tax expenditure" provisions for private pensions and individual savings. Viewing the three elements as a unified retirement security arrangement demonstrates that the core unfairness of this nation's retirement security program is the regressivity of its taxing structure and the incapacity of low- and moderate-wage earners to maintain post-retirement their prior standard of living. Significantly, this conclusion contradicts directly the contentions of many critics of social security who complain about its failure to replicate the payment and distribution structure of an "actuarially fair" insurance system.

In the May 1988 issue of this law review, Professor Nancy J. Altman criticized my analysis. She complains that my "limited focus" is grounded "solely" in "the perspective of tax policy," asserts that I "would inadvertently weaken the long-run stability of Social Security by transforming it from a social insurance program to a welfare program," and presents her "defense" of tax expenditures for employer-sponsored pension plans. Ultimately, she embraces the status quo on the ground that the various components of our retirement income system "demonstrate an over-arching logic, despite the incremental and fragmented way in which the system has developed." My purpose here is to reply to Professor Altman's Article.

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