There’s a proposal associated with tax reform that would fund Social Security from general tax revenues rather than from the program’s own dedicated payroll tax. What should we think about this?
Brenton Smith is against. He argues that the Social Security payroll tax was set up for a reason, which is to establish a link between taxes and benefits that will strengthen Social Security politically by distinguishing it form a “welfare” program.
All that is true. But as I argued at Forbes,the link between taxes and benefits – which creates the perception that Social Security is an “earned benefit” – can be unhelpful when it comes to reforms, especially reforms that would restrain benefits for middle and upper income Americans and focus a smaller, more affordable program on preventing poverty in old age.
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For those who favor using general revenues to fund Social Security, I suggest you put our your wild wood weed you are smoking. The last general budget surplus was in 1957. Do you really think moving SS to the general budget is a good thing?
Right now SS requires a balance budget. It cannot borrow. It can only spend what dedicated tax revenues there are and what is in the trust fund. When the trust fund is gone. SS is limited. Are you insane? Why take any control over spending on the single largest program off?
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