Tuesday, May 8, 2012

Payroll Tax Increase Used In Pay-As-You-Go-Act

Not only is the payroll tax holiday mixing general revenues into the Social Security Trust Fund (which has U.S. Treasury bonds and has not been "stolen"), but now politicians are using payroll tax increases as an offset for the purposes of the "Pay-As-You-Go-Act of 2010"? The proposed increases in payroll taxes are limited in scope (applies only to "certain shareholders of a subchapter S corporation engaged as a partner in a professional service business"), and is thus limited in its effectiveness as to reforming Social Security revenues, and mixes the bookkeeping of payroll taxes with general revenues. The accounting for Social Security is supposed to be kept separate from other federal programs, and this proposal undermines that division.

If an offset is needed for keeping student loan interest rates low, then why not propose getting rid of big oil subsidies to pay for it? Democrats should have proposed this while daring Senate Republicans to vote NO.

Yes, the cap on income subject to payroll taxes should be raised (it should be indexed instead of static; the raising of the cap is the only fix Social Security needs), but doing it piecemeal while mixing it in legislation for other purposes is one more step to dismantling the most successful federal program ever. Maybe you want grandma and grandpa in poorhouses as was common before 1935, but I think a self-funded retirement insurance program which is not subject to Wall Street shenanigans, mismanagement, high administrative fees, or personal or corporate bankruptcy is a much better idea. This messing with payroll taxes is alarming, and we have to get it stopped.

See "Student Loan Vote: Republicans Block Bill To Extend Low Interest Rates", and "Stop the Student Loan Interest Rate Hike Act of 2012".

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