A Payroll Tax Holiday
Posted by Chris Martin at 1/13/2009 9:16 PM 
Categories: Entitlements, Social Security, The Bailout, The Crash of 2008, Catherine Eloise Martin
Categories: Entitlements, Social Security, The Bailout, The Crash of 2008, Catherine Eloise Martin
There must be more than a hundred good economic reasons the suspend or eliminate the payroll tax that funds Social Security and Medicare - for 10 of them see here. One fine day as Wonks Anonymous was explaining some of these to his daughter Cat she brought him up short:
Cat has good sense well beyond her years and would be a valuable addition to any history program. She hit the nail on the head here. Sure other taxes are more efficient and it would be nice if we paid pensions for everyone out of the excess wealth that MBAs stole from us but let's be real.
The main reason Social Security has survived these years is that we have paid for it. We can point to our taxes and to the trust fund, to the assets that we have purchased. Which is why the boys from Chicago keep trying to tell us that Social Security is a Ponzi scheme and that the trust fund is meaningless. They want to convince us that we didn't really pay for it and don't really have any moral claim on retirement income. See here for a more complete discussion of this nonsense.
Because if we hadn't paid our taxes and accumulated the trust fund then we would just be another bunch of welfare bums sponging off the poor hard working young people.
Which brings us round to the Payroll Tax Holiday, a proposal making the rounds among all the better right wing economists. Like all the other tax cuts it is supposed to create jobs and foster rapid economic growth. Which results have been sadly lacking for all the other tax cuts. It will have the further advantage of eliminating the revenues of the Social Security Trust Fund.
That way, when the economy recovers and we start to really deal with the budget deficit it will be clear that we need to eliminate Social Security.
Don't worry, means tested income support programs work really well, just ask anyone on SSI.
Dad, the good thing about using payroll taxes to pay for Social Security is that it means that we have paid for it. They can't pretend that it is a gift or a welfare program.To which Wonks Anonymous responded with something like. Oh yeah.
Cat has good sense well beyond her years and would be a valuable addition to any history program. She hit the nail on the head here. Sure other taxes are more efficient and it would be nice if we paid pensions for everyone out of the excess wealth that MBAs stole from us but let's be real.
The main reason Social Security has survived these years is that we have paid for it. We can point to our taxes and to the trust fund, to the assets that we have purchased. Which is why the boys from Chicago keep trying to tell us that Social Security is a Ponzi scheme and that the trust fund is meaningless. They want to convince us that we didn't really pay for it and don't really have any moral claim on retirement income. See here for a more complete discussion of this nonsense.
Because if we hadn't paid our taxes and accumulated the trust fund then we would just be another bunch of welfare bums sponging off the poor hard working young people.
Which brings us round to the Payroll Tax Holiday, a proposal making the rounds among all the better right wing economists. Like all the other tax cuts it is supposed to create jobs and foster rapid economic growth. Which results have been sadly lacking for all the other tax cuts. It will have the further advantage of eliminating the revenues of the Social Security Trust Fund.
That way, when the economy recovers and we start to really deal with the budget deficit it will be clear that we need to eliminate Social Security.
Don't worry, means tested income support programs work really well, just ask anyone on SSI.
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