Tuesday, January 25, 2005

SS reform is hobbled by a lack of imagination

U.S News & World report head honcho Mort Zuckerman has a piece in his magazine attacking Social Security reform as “A cure worse than the cold.” It’s full of all the expected caveats about transition costs and investment returns, but the shortest paragraph in the article is this throwaway line:

Most important, to the extent that there is a deficit, it could be covered by a variety of modest combinations of tax hikes and benefit cuts--each of them quite manageable.
Note this blithe rhetoric, the wave of the hand: simply raise taxes again and all will be “manageable” which I imagine is true for any government program. Let’s recap some critical facts about the ever-increasing payroll tax courtesy of the Cato Institute:

- The Social Security payroll tax rate has grown from just 2 percent in 1949 to 12.4 percent today.
- Social Security taxes have been raised more than 40 times since the program began.
- The maximum original Social Security tax was just $60. Today it is $11,000.
- Nearly 80% of Americans pay more in Social Security taxes than they do in federal income tax.
America cannot continue to heap taxes on younger workers; that option is right out.

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