The amount able to be provided may be somewhat unstable but SS is able to be projected and provides some support to people who no longer are able to work.
Having a predictable and stable income for elderly/disabled is more important and valuable than the gain of wider stock distribution. Being at the whims of a market when they can't supplement their savings is not ideal. It could mean losing their home. Having homeless/poor elderly and disabled due to the Great Depression was the reason SS was created.
Is that going to work? That seems like a massive regulatory undertaking. I think there's a behavioral element to this idea too. If what will be essentially forcing people to invest in a retirement fund and telling them how to allocate it, will people be more receptive to that than just paying a tax with the understanding down the road you'll be on the receiving end of it?
I don't think it needs to be an one or the other situation. Younger people should get help to get on their feet, but it doesn't need to come at the expense of taking away income from people who collect SS. It also kind of goes back to 1. Lots of people will never collect social security, it helps keep it solvent.
I think I understand what you're saying. Though this feels like it makes sense in an academic Econ frame but isn't practical. I also think that this is where the private retirement savings that exist in parallel with SS is where this is seen.
That's a fair argument. On the other hand, while I get why they tax it the way they do, they also could open up and find another way to bring in funding for it. Carbon tax/LVT/etc. they should be able to find the money to keep it solvent.
With all that said, just because it's considered untouchable doesn't mean we shouldn't take long looks at it and consider changes if they make sense.
Passed in December 2022, the SECURE 2.0 Act means There is going to be required retirement account offers/contributions by employers beginning in 2025. Which it actually does a lot of what you suggest in parallel to SS. I'm assuming it's with the forward view that SS isn't going to be able to provide enough no matter what for the younger generations.
I think providing a steady, dependable income to elderly and disabled is not a question of if but more how much. At least for the next 20ish years it needs to stay pretty much intact and any major changes phased in over time. Can't pull the rug out from under people without warning.