Senator Sanders Reads quotes from Social Security Haters

[jtown1123]

It has always been a Republican plan to dismantle Social Security by instituting payroll tax holidays so that Social Security would begin to rely on the general fund. This way, Social Security competes with other important federal programs for limited funding. Now Republicans have an opening to cut the program because we cannot "afford' to pay the difference.

http://www.forbes.com/2009/10/15/payroll-tax-social-security-opinions-columnists-bruce-bartlett_print.html


Don't Cut The Payroll Tax
Bruce Bartlett, 10.16.09, 12:00 AM ET


Another problem is the dubious temporary nature of the proposed Social Security tax cut. As we have seen too often in recent years, temporary tax cuts often become quasi-permanent. The tax credit for research and development was scheduled to expire decades ago but always gets extended at the last minute. Barack Obama has proposed extending many of George W. Bush's tax cuts, and there is powerful support in Congress for extending the tax credit for first-time home buyers that expires at the end of next month.

If the temporary Social Security tax cut also becomes quasi-permanent, then so will the general revenue financing necessary to keep paying Social Security benefits, thus pushing the system further down the slippery slope toward becoming a pure welfare program.

I strongly suspect that the main reason why a cut in the Social Security tax is so popular among Republicans is because it's the only way they can cut taxes for almost half of the country. According to another report from the Tax Policy Center, 46.9% of tax filers will pay no federal income taxes this year, up from 37.3% in 2006. History shows that once a group has been exempted from taxation it is very hard to put them back on the tax rolls except during world wars.

Ironically, the main reason why so many people have no income tax liability is because of the Earned Income Tax Credit, which was instituted by Republicans in the 1970s for the express purpose of offsetting the payroll tax liability of those with low incomes. Because the EITC is refundable, the bottom 40% of tax filers actually have a negative income tax liability--they receive money from the Treasury rather than paying money to it. For those in the bottom 20% of tax filers, the EITC offsets more than 100% of their payroll tax liability.

Finally, I think conservatives make a terrible mistake by undermining the payroll tax. It's really the best tax the federal government has--it's broad-based, has a single low rate, exempts income from capital and doesn't apply to wages above $106,800 (except for the 1.45% Medicare tax). It's just about the perfect tax from a conservative point of view. In my opinion, cutting the payroll tax to deal with a temporary unemployment problem risks having it replaced down the road with something far worse, economically.

Bruce Bartlett is a former Treasury Department economist and the author of Reaganomics: Supply-Side Economics in Action and Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy. Bruce Bartlett's new book is available for pre-order: The New American Economy: The Failure of Reaganomics and a New Way Forward. He writes a weekly column for Forbes.com.