Posted on 05/16/2005 5:12:37 AM PDT by OESY
Full marks for honesty to Florida Congressman Robert Wexler, who today will become the first Democrat to propose an alternative to President Bush's ideas for Social Security. The non-surprising news is that he wants a tax increase.
To anyone paying attention, a payroll tax hike has long been the preferred policy of most Democrats and AARP, though they'd rather not have to say so in public. Mr. Wexler has the courage of their convictions. Press reports suggest the Congressman will propose that both employer and worker pay an additional 3% payroll rate on all earnings above $90,000. They already pay a combined rate of 12.4% on all earnings up to $90,000, so Mr. Wexler is proposing one of the largest marginal-rate tax increases in decades.
This would have a damaging effect on job creation, since it is a direct tax on labor. But as a political matter the idea has the virtue of candor, since Mr. Wexler is merely showing taxpayers what they can look forward to if Social Security (and we'd add Medicare) isn't reformed. In fact, even greater tax hikes would be required down the road to keep the current promises that politicians have made to seniors, but the Wexler proposal at least gives voters a flavor of the pain to come.
So now we're getting somewhere. Mr. Bush has put on the table personal accounts to build wealth over time, plus a reduction in the growth of future Social Security benefits for higher-income workers known as "progressive indexing." Mr. Wexler says neither of those are needed as long as the government is willing to raise taxes high enough. By all means let's have a debate.
(Excerpt) Read more at online.wsj.com ...
(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
Exceptional piece.
Thanks for posting.
There has to be a balance, where we can wean ourselves off of Social Security. The problem here is that the wealthy or anyone making over 90k a year have the ability to pay an additional 3-6% into the system. However, to do this they would need an incentive.
I propose that anyone can opt into paying the additional 3-6% provided the government lets them also sock away anything they want into a personal account, which is not to be taxed either on the front end or back end.
So as an example. You pay 12% now into SS. You can pay 15% into SS and if you want to add an additional 10% into a personal account, it will be considered non taxable income.
After a while you start to wean people off of SS and onto their personal account. I don't see any other way to do this.
As I said before, the only thing Wexler's proposal would do to buttress social security is to increase the amount of the IOU in the trust fund. You can do that without increasing taxes. Congress should just pass a law saying that the amount of the IOU is increased.
That would highlight the fact that Wexler's proposal is nothing but another lie. In fact, if we simply passed a bill increasing the IOU, without increasing taxes, that might make social security stronger than Wexler's proposal would. At least then, we would have lower taxes, and would be in a better position to pay off the IOU when the time comes.
Interesting proposal (NOT!), given that Wexler's constituents are primarily made up of non-contributing retirees on Florida's Gold Coast. Duhhhhhhhh!!!
Exactly. I'm not sure why the GOP doesn't say, "We give up trying to fix social security, but we are going to pass a law making it mandatory to put 10% of your income into a Roth IRA, up to say $200,000 of your income.
That way, it won't be such a big deal when SS ultimately goes bust, and we'll have our private accounts.
Most folks already put money into an IRA anyway, and if they don't, then they are either ineligible, or they are fools.
Just because a person has the ability to pay more doesn't mean they have a duty to. I strongly disagree that any more money should be stolen by the SSA until the program is restructured completely - expecially meaning the removal of SS money from the general fund.
Well, you will notice, that NO Democrat is talking bout blowing the lid off the cap.......
That is a very telling clue to who each party gets their $$$$
from.
The Dems will raise taxes on the working men and women, (25% increase no less) but yet, make sure that that HNW,and HCE people dont feel the pinch.....
Only Visitors.
propose that anyone can opt into paying the additional 3-6% provided the government lets them also sock away anything they want into a personal account, which is not to be taxed either on the front end or back end.
We already have 401K's and IRA's that aren't taxed on the front end. If you believe the govt will ever let you have any income tax free you're on drugs.
Any proposal that includes tax increases will effectively undo Bush's tax breaks, and then some, of the last few years. Those tax cuts aren't even permanent and will start to reappear soon if something isn't done. Couple all this with the incremental taxation of the AMT and you have a prescription for taxing the middle class into poverty.
That's a good Democratic plan if I ever heard of one!
It appears that some lines are being drawn...is this all part of some Rovian master plan?? If we can get a few more Dems to get behind Wexler...who knows how this might shake out.
I thought the dems and libs said SoSec is fine as is.
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