Monday, November 18, 2013

Washington Post: Harkin-Sanchez benefit increase/tax max plan “wrong-headed”

The Washington Post’s editors weigh in against legislation from Sen. Tom Harkin and Rep. Linda Sanchez that would increase social security benefits and COLAs, funded by eliminating the Social Security “tax max”:

The fiscal predicament facing the U.S. government is a double one: how to bring taxes and spending into rough long-term balance while ending the squeeze on non-entitlement spending enshrined in current law. It’s not an easy task. It won’t get any easier if progressives define progressivism as opposition to budgetary realism.

Check it out here.


WilliamLarsen said...

It also would extend the life of the notional trust fund from which benefits are drawn by 16 years. To pay for this, the bill would subject all wage and salary income to the 12.4 percent Social Security payroll tax, as opposed to only drawing from income up to $113,700 as is presently done. For someone earning $200,000 per year, this would mean a tax increase of more than $4,000 per year. For someone earning $1 million, the tax increase would be $58,700.

I have said for a very long time that eliminating the cap does not solve the Social Security OASI problem.

When will the majority of the people finally realize the needs of the few do not out weigh the needs of the many? The few have perpetrated a great fraud on the many by claiming a moral or earned right to Social Security.

The problem is that it is a ponzi scheme.

If all wage income is not sufficient to make SS-OASI fully funded, what will?

Could it be there is no fix at this late stage to save Social Security? Could it be that throwing good money into a black hole is a bad idea?

Arne said...

Both CBO and SS trustess reports say that eliminating the cap does solve the problem (if without the benefit increases that Harkin and Sanchez propose.) I don't think it is the right solution, but we are going to get nowhere if we can't agree on what numbers are valid.

The Washington Post definition of budgetary realism is no new taxes. My definition is we need to figure out whether we are willing to pay for what we ask for. As long as our societies businesses depend on better educated, healthy workers and consumers, it behooves both society and those business to look out for the workers and consumers.