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Friday, February 11, 2005

Agape goes for pure politics

Posted by: Hammer / 12:57 PM

Hammer's out of the toolbox, at least momentarily. The fever and ague have passed. At no point during my convalescence was I reduced to tears, proving once again that I am tougher than a 5 year-old girl.

58% of Americans think America is on the wrong track. 54% disapprove of the President. This is the ugliest honeymoon since Lisa Marie married Michael Jackson.

Meanwhile, Agape alerts its readers to the Social Security debate:

Let's look at that financial burden another way. The Social Security payroll tax is already 12.4 percent of wages, or one eighth of a worker's total annual wages. It is the biggest tax the average household must pay. Roughly 80 percent of American families pay more in Social Security taxes than they do in federal income taxes.

Despite that already huge tax burden, the payroll tax will have to be increased by nearly half in order to continue paying Social Security benefits. That's a terrible burden to impose on our children and grandchildren.

The only way out of this problem is to change Social Security from a pay-as-you-go model to a system based on savings and investment. That is why President Bush wants to allow younger workers to begin saving some of their Social Security taxes. Those who disagree have an obligation to tell the rest of us how they would deal with the grim demographic reality.

How would I deal with the grim demographic reality? I would begin with intellectual honesty. Fed Chair Alan Greenspan championed a hike in payroll taxes back in 1983 to build up a trust fund to pro-actively deal with the grim demographic reality. The trust fund monies will allow full benefits to be paid through 2052, according to the CBO, and indefinitely beyond that, given good economic growth.

It's fascinating to see the payroll tax burden highlighted now, rather than in 2001 when Bush's first irresponsible tax cuts were rammed through. At the time, everyone who paid federal income tax was said to get a tax cut. That definition, of course, excluded taxpayers subject to payroll taxes but not subject to income taxes.

I would not have supported an across-the-board payroll tax cut in 2001. I would have supported a reduction in rates with an increase in the wage ceiling, to be certain that the trust fund was adequately funded. I believe in Social Security -- I believe that an American who toils his or her entire adult life should be guaranteed a lifetime benefit sufficient to pay for a modest retirement. Social Security has saved three generations of Americans from cat food and bread lines when age robs them of their ability to work.

Social Security was designed to reduce poverty among the aged and it has been an enormous success. Let those who want to remove that safety net in the name of unregulated free marketerism make their case with a modicum of honesty. Don't claim that the Bush proposal -- which does nothing to solve Social Security's long-term projected deficit, but does add $1 to $2 trillion in borrowed transition costs -- relieves a burden on the generations to come.


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Prior posts

  • Bush achievements
  • Open Source Friday: Derekota!
  • Gay marriage
  • Smilin' Norm: Bush good, specifics bad
  • Bad News for Smilin' Norm
  • Agape round-up: push back
  • To F
  • Crisis!
  • Madison Scientists Turn Stem Cells Into Neurons
  • Archives

    • Gone for now

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