Monday, January 08, 2007

Read my lips: no new taxes for Social Security

Rumors are flying that President Bush, so desperate to salvage his promise to “save” Social Security, is holding open the possibility of a payroll cap increase (the limit on income subject to payroll taxes.) Forget personal accounts, here’s Bob Novak on the potential cave-in:

Eliminating the cap on payroll taxes would constitute the largest tax increase in U.S. history, estimated by the Heritage Foundation during the last Congress at $1.4 trillion over 10 years. This analysis predicted that such a step would cost nearly a million jobs and more than $55 billion in projected personal savings.

The economic woe that would result from higher payroll taxes would be matched by political damage to the president if this outcome were adopted by the Democratic-controlled Congress with his approval but support from only a few Republican legislators. That political calamity can be averted if Bush takes any payroll tax increase off the negotiating table, just as Democrats refuse to talk about a partially privatized Social Security system.
As far as I’m concerned, I’d rather see Social Security fall into the ocean before payroll taxes are increased, yet again, to prop up this inequitable system of wealth transfer from the working young to the (relatively) well-off elderly. As I’ve noted before, the payroll tax cap which is indexed to inflation, was set by FDR to insure that Social Security is a “universal” benefit. Last month, Opinion Journal expanded on what a cap increase means to the entitlement:

What liberals dearly want is to raise the payroll tax cap. Under current law, Americans pay a 12.4% Social Security tax on all wages up to $94,200 in 2006, and the cap rises each year with inflation. (There is also an uncapped 2.9% Medicare payroll tax on top of that.) So why not lift the cap a little more, say the taxers, perhaps to $150,000 if the trade-off is benefit cuts that will prevent even larger tax increases in the future?

One answer is that Social Security was always meant to be run like a pension program where the taxes paid by workers are linked to the benefits they get back during retirement. Eliminating or substantially raising the cap would convert Social Security into an overt income redistribution program. If that is the direction Congress wants to go, we should all then end the pretense that Social Security is some kind of "universal" insurance program and call it welfare for poor seniors.
In the middle of President Bush’s 2006 State of the Union address, Democrats applauded when Dubya noted that Social Security reform had been blocked. Here’s how Donald Luskin described the scene:

And as for those cheering Democrats, they didn’t applaud because reform is actually dead. They applauded to embarrass the president of the United States, and make it harder for him to promote reform in the future.

But reform isn’t dead. It can’t die. Reform is inevitable, because the Social Security system really is in crisis, in the sense that the accounting mirage of the Trust Fund doesn’t hold any real assets to pay off the system’s obligations. Even if it did, the assets would be exhausted in a few short decades as the baby boom generation retires.
Yet now, suddenly, Social Security reform is a hip issue again. As somebody who pays intense attention to this issue, I can’t help but feel the Democrats are on the cusp of an entitlement panic. Why should President Bush now cooperate with a party who happily, gleefully, and strategically played Social Security for political gain? The Republicans made a good faith effort for reform, taking personal accounts off the table and then proposing a price-index program that would protect poor retirees. No dice, said the Dems.

Well, fine, then. The Republicans should resist any tax increase and let the program wither away under the weight of it’s own overextended obligations. Goodbye New Deal.

Extra - Bulldog Pundit: "Will Bush repeat the sins of his father?"


Anonymous said...

The Democrats are only interested in raising taxes to "save" Social Security. Anything else will be construed as anti-poor.

Excellent post.

Anonymous said...

Das hohe Karlsruher Gericht hat zum 9/11 Urteile erlassen, die als einzigen Beweis auf ein manipuliertes Video vom Aljazeera Sender in London abstellen und alle Daten und Zahlen sind klar falsch. Es gibt weitere Beweise. Es ist klar, dass solche Richter für solche Urteile mindestens 25 Jahre schweres Zuchthaus erhalten wegen Rechtsbeugung. Schlicht geht es allein darum, solche kriminellen Richter genau auf Schritt und Tritt zu verfolgen und deren Familien zum Beispiel in den Ferien zu observieren und zu verfolgen und für Vernehmungen nach Argentinien oder Chile zu deportieren und deren Familienmitglieder ebenfalls. Das ist wichtig. Die falschen Urteile dieser kriminellen Richter sind zum Teil auf meinem Web-BBS einzusehen; . Die kriminellen Richter in Karlsruhe werden zur Rechenschaft gezogen: Das ist nur eine Frage der Zeit.

Des weiteren:

The culprit in the innocent Mr. Kurnaz case is Thomas Oppermann(Germany)

Post subject: La détention vite et immediate d'Oppermann Reply with quote

L'ancien juge et le criminel professionnel, Thomas Oppermann (espion des services secretes Allemandes[BND] (Conseil de "BND")), a répété souvent dans le passé ses départs de la loi dans au moins 10 cas. Ceci, le grand criminel Oppermann a fait, en dépit de 5 ans de penitentaire avec travail dur dans tout cas singulier qui égale dans chacun des 10 cas criminels au moins à 50 ans de penintentiaire du travail dur pour Thomas Oppermann. Le grand criminel, Thomas Oppermann, toutefois n'était pas encore pas persecuté ni I) pour ses activités d'espion pour Tel Aviv et Haïfa ni II) en raison de sa connivence et sa collusion récente avec l'internement et la torture de M. Kurnaz à Guantanamo. Le grand criminel, Thomas Oppermann, devrait être arrêté immédiatement en raison de sa connivence et être soumis à une interrogation la plus stricte comprenant toute sa famille. De plus grande importance est l'application de tous moyens les plus durs contre sa famille et la détention vite et immediate de sa famille tout entière inclus l'entourage d'Oppermann parce que nous avons des évidences que le criminel Thomas Oppermann rechange les pièces de preuves souvent et laisse nettoyer sous son tapis les preuves maintenant. La famille d'Oppermann devrait être soumise aussitôt que possible aux méthodes d'interrogation les plus strictes pour limiter le dommage et les dégats d'Oppermann.

Post subject: Wanted death or ... :Zionistic Spy Thomas Oppermann Reply with quote

The former judge and professional criminal, Thomas Oppermann(German Secret Service spy (BND Board)), repeated often in the past his departures from the law in at least 10 cases. This despite 5 years penitentiary in any singular case which equals in all 10 criminal counts to at least 50 years penitentiary for Thomas Oppermann. The big criminal, Thomas Oppermann, however wasn't yet persecuted neither for his spy activities for Tel Aviv & Haifa nor ii) because of his collusion with the internment and torture of Mr. Kurnaz in Guantanamo. The big criminal, Thomas Oppermann, should be arrested immediately because of his collusion and submitted to a strictest rogation including his family. Of utmost importance is the application of all means for rendition without detention spare of the family of Thomas Oppermann and its surrounding field. The family of Oppermann should be subjected to the severest rendition methods as soon as possible to limit further dammage.

Erschiesst alle Spione des BND ! Reply with quote

Der frühere Richter und Berufsverbrecher, Thomas Oppermann, dessen wiederholte Rechtsbeugungen in mindestens 10 Fällen trotz 5 Jahren Zuchthaus in diesen Dingen[diese "several counts" ergeben dann zum Schwerverbrecher Thomas Oppermann mindestens 50 Jahre Zuchthaus ! ] noch nicht verfolgt worden sind, sollte i) als Spion von Tel Aviv & Haifa und ii) wegen Verdunkelung bei der Internierung und Folterung von Hern Kurnaz in Guantanamo sofort verhaftet und einer strengsten _Rogation_ ohne Haftverschonung seines Familienumfeldes unterworfen werden.