published Sunday, September 18th, 2011

Fight the fright stampede

With the leading Republican aspirant for the presidency, Rick Perry, denouncing Social Security as a "Ponzi scheme," and the "gang of six" U.S. senators on the national debt commission considering harsh downsizing of Social Security and Medicare, Sen. Bernie Sanders' solid proposal for keeping Social Security in the black for another 75 years comes as a breath of fresh sanity against the GOP fright agenda. His proposal: eliminate the cap on income for Social Security payroll taxes.

Except for the misguided political opposition of Republicans, that wouldn't be hard to accomplish. A positive vote in the House and Senate on a bill to remove the cap would do the trick. President Obama surely would approve. Though he hasn't advocated it lately, he proposed the same thing in his 2008 campaign.

The present salary cap for Social Security tax deductions is $106,800. Earnings above that level are exempt from the Social Security payroll tax. That means that all but a few percent of America workers and households pay Social Security taxes on 100 percent of their income (the nation's media household income dropped in 2010 to $49,445), while multi-billionaires like Warren Buffet pay Social Security taxes on less than 1 percent of their income.

Buffett himself understands the vast wealth gap and tax inequity between ordinary Americans and the super-rich that is hollowing out America's middle class while concentrating ever higher proportions of the nation's wealth in the hands of the top tenth of the top 1 percent of households. Indeed, he has become a strong vocal advocate of raising taxes on the ultra-wealthy back to at least the Reagan-era rates to mitigate the imbalance, bring down the federal debt and strengthen the economy.

In the broad moral view of social equity, the income-cap for Social Security payroll taxes and the vast disparity of burden sharing avoided by the ultra-wealthy for tax equity generally is indisputably unfair. The mechanics of wealth formation in America and other industrialized nations' economies spring from the common tax base for infrastructure and the productivity and labor generated by the nation's broad and overburdened middle class. It's only fair to tax the ultra-wealthy proportionally relative to the higher tax rates paid by working Americans across the board.

As it is, however, the bulk of the tax breaks lavished on the ultra-rich by George W. Bush and his GOP majority from 2000 to 2006 have dramatically exacerbated the nation's exponentially exploding wealth gap. The top one-tenth of one percent of households, for example, got the lion's of the benefits of cuts in capital gains, dividends, estate and income taxes. Their current share of the nation's wealth is higher than it's been in 80 years.

Viewed through this lens, even a flat-rate tax, with no caps and no deductions that would chiefly benefit the nation's ultra-wealthy, could be seen as a godsend for ordinary Americans.

The deceit now being advanced by Republicans against Social Security and Medicare has derided the very nature and purpose of these core social security programs, and even the label -- entitlements -- by which they are described. Ordinary workers are entitled to the benefits of these programs because they have loyally paid their payroll taxes for decades to support them.

While it's true that changing demographics and a decline in the relative number of workers to retirees require occasional tweaking of the programs' guidelines, there's no need to radically change or diminish them. Fixing Social Security to ensure its long-term viability is a matter of minor adjustments, not wholesale slashing. Even now, its trust assets will cover all currently projected costs through 2035. Lifting the salary cap for its payroll deductions alone would ensure its financial stability for 75 years.

Medicare is more difficult to fix, but needed reforms -- including giving Medicare authority to negotiate prescription drug costs with the pharmaceutical industry, and a shift in focus and payment schedules to emphasize preventive care -- would go a long way toward getting Medicare's costs in line.

What isn't needed is a scare-talk push into deep cuts -- promoted by the contrived fright of Obama opponents -- that would needlessly harm the core safety net programs on which the vast majority of working Americans will reasonably depend for decades to come.

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conservative said...

This Marxist screed is both unbelievable and laughable! There is a cap on Socialism Security taxes because there is a cap on Socialism Security payments. No mention of Obamboozler's proposal to cut taxes paid into the "trust fund"( oxymoron) which deplets the "fund" which you hypocritically support, which is also a "tax cut for the rich"! There are myriad reasons why some are rich and some are not but you preach envy and greed to close the "gap". History and facts have shown that higher tax rates only bring in less revunue NOT more. You then contradict yourself with a wish for a flat tax, huh? One more thing, if Buffett wants to pay more taxes, why doesn't he? Why is he in a fight with the IRS over unpaid taxes?

September 18, 2011 at 9:11 a.m.
bookworm said...

If the Tea Party gets their way, they will succeed in turning America into a third world nation with no more middle class. Social Security enefits should be taken away from Tea Party recipients as they state they hate Social Security so much. They hate the federal government. Remember what happened to "The Man Without A Country?"

September 18, 2011 at 9:22 a.m.
brokentoe said...

If the Republicans hate social security so much why are they the ones who have borrowed so heavily from it throughout the years? Why don't they pay back those loans they're hoping, praying and are even willing to destroy social security to have those loans forgiven?

September 18, 2011 at 1:32 p.m.
conservwoman2 said...

Hi brokentoe, Where's the Beef - on all you have told us? just curious! : )

September 18, 2011 at 2:07 p.m.
hambone said...

During the Reagan adminisration Congress raided the Social Security Trust fund to the tune of $2.5 trillion.

This year is the first year in history that SS will pay out more than it takes in, mostly due to the reccession.

The GOP would like to use this as an excuse to erase their IOUs and cut SS benifits in order to protect tax cuts for the wealthy and tax payer paid subsidies to big oil.

September 18, 2011 at 3:30 p.m.
conservative said...

Hambone- Since the House of Representatives was controlled by the Demoncrats for the full Reagan term, you are asking us to believe the Demoncrats raided the mythical "trust fund". Are you willing to stick to that story?

September 18, 2011 at 5:10 p.m.
hambone said...

Once again, conservative. I didn't say what party, just Congress.

But it is the GOP that wants to change SS now.

It is estimated that the SS shortfall will be $29 billion this year. It is hard to estimate what future short falls will be. If unemployment goes down or up, these shortfalls will go down or up.

Regardless, the $2.5 trillion would have keep SS solvent for a long time.

September 18, 2011 at 9:39 p.m.
conservative said...

Hambone- Don't you read what you wrote? You wrote "The GOP would like to use this as an excuse to erase their IOUs". You used the Possessive pronoun "their" in this sentence. A pronoun is a substitute for a noun used in a sentence. You used the pronoun "their" as a substitute for GOP in your sentence. You deliberately omit using the word Democrat anytime you refer to "cuts" in Socialism Security but deliberately use the words Republican, GOP, and Reagan administration. Give it up. You can't fool me. I caught you.

September 19, 2011 at 7 a.m.
hambone said...

conservtive, have you ever heard the old country saying "your picking fly sh*t out of black pepper"

September 19, 2011 at 8:22 a.m.
conservative said...

Hambone, " a bit dog will holler".

September 19, 2011 at 8:35 a.m.
hambone said...

conservative, yes they do!

September 19, 2011 at 9:49 a.m.
BigRidgePatriot said...

Anyone that says Republicans or the tea party hate Social Security is an idiot. SS IS a Ponzi scheme and it needs to be restructured to be viable for the future. It is the Left that is fear mongering by trying to insist that the Republican position (if there is one that can be pinned down) is the destruction of SS.

By the left's logic, it is perfectly legitimate to say that Barack Obama hates and wants to destroy this country, otherwise he would have no reason to be interested in "fundamentally transforming" it. If the Republicans said they wanted to fundamentally transform Social Security would you Leftist windbags think that is OK?

September 19, 2011 at 11:03 a.m.
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