Tuesday, November 27, 2012
That payroll tax holidayI've always been bothered by the idea that we had a payroll tax (FICA) break for the last couple of years at the same time Obama and the Republicans are trying to tell us that Social Security, Medicare and Medicaid cost too much. FICA funds both Social Security and Medicare.
The loss to the Social Security Trust Fund reduction that has been in place the last couple of years is being replaced from the General Fund.
Economists like this kind of tax cut, including liberal ones like Robert Reich, because it's an efficient way of increasing the amount of money in consumers' hands that is highly likely to be spent immediately. The problem is the politics of it: the whole point of having it in a separate trust fund is for people to feel a real sense of ownership of the program; it's a defined-benefit social insurance program. Having it funded in any way from the General Fund opens it to be branded as "welfare" by the Republicans and thereby targeted for cuts.
So I glad to see in this article by Arthur Delaney and Sam Stein, Obama Administration Not Sticking Up For Payroll Tax Cut Huffington Post 11/27/2012:
Other progressive economists and lawmakers have argued that if the payroll tax cut is not extended, something else should take its place. One top Senate Democratic aide called that "a pretty consensus view on our side." But there are clearly detractors. Many lawmakers and outside stakeholders have expressed concern that diverting tax money from Social Security -- which the payroll tax helps fund -- would weaken the program, which provides an average monthly benefit of $1,237 to some 40 million seniors. The Social Security Administration's actuaries say the trust fund will run out of money in 2033, at which point incoming tax revenue could support just 75 percent of benefits.Tags: social security
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No subject for immortal verse
That we who lived by honest dreams
Defend the bad against the worse."
-- Cecil Day-Lewis from Where Are The War Poets?
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