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Fri Dec 23, 2011, 12:01 PM

 

Serious question: Doesn't Dem support of the payroll tax cut undermine the case for lifting the cap?

Any attempt to raise the cap on payroll taxes for all income will be framed by the Republicans as a massive tax increase.

Also, doesn't lowering the payroll taxes collected to fund Social Security and Medicare undermine these programmes? Any input would appreciated.

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Reply Serious question: Doesn't Dem support of the payroll tax cut undermine the case for lifting the cap? (Original post)
stockholmer Dec 2011 OP
MjolnirTime Dec 2011 #1
lumberjack_jeff Dec 2011 #2
Vincardog Dec 2011 #3
frazzled Dec 2011 #4
coalition_unwilling Dec 2011 #5
wryter2000 Dec 2011 #6
Motown_Johnny Dec 2011 #7
dkf Dec 2011 #12
Motown_Johnny Dec 2011 #13
dkf Dec 2011 #14
Motown_Johnny Dec 2011 #15
dkf Dec 2011 #16
Bluenorthwest Dec 2011 #17
Motown_Johnny Dec 2011 #20
kentuck Dec 2011 #8
Jim Lane Dec 2011 #10
dkf Dec 2011 #11
Bluenorthwest Dec 2011 #18
CTyankee Dec 2011 #22
karynnj Dec 2011 #23
Skink Dec 2011 #9
Bluenorthwest Dec 2011 #19
karynnj Dec 2011 #21
NNN0LHI Dec 2011 #24

Response to stockholmer (Original post)

Fri Dec 23, 2011, 12:04 PM

1. Social Security loses no money due to this.

 

The Repigs fram any attempt to do anything as a massive tax increase.

Raising the payroll cap is no different. But it will still likely happen.

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Response to stockholmer (Original post)

Fri Dec 23, 2011, 12:08 PM

2. No. In a sense that is kind of what it is doing.

Taxes are cut on working folks now and being backfilled by borrowing future general tax revenues.

Reasonable people can disagree whether this is a good thing.

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Response to stockholmer (Original post)

Fri Dec 23, 2011, 12:09 PM

3. The whole budget talk is just RW BS to try to cut social programs. They have NO serious discussion

about really fixing ANYTHING

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Response to stockholmer (Original post)

Fri Dec 23, 2011, 12:30 PM

4. No, I'd say exactly the opposite

First of all, Republicans have ALWAYS opposed raising the cap on income subject to SS on the basis that it's a "massive tax increase." So the temporary payroll tax cut has no bearing whatsoever on their position, to the extent they even have one that makes any sense. They opposed it before on these grounds.

The most obvious way to relieve the burden on the poorest working Americans, whose payroll taxes represent a massively higher portion of their income than for wealthier Americans, would be to lift the cap, which would fix the revenue loss internally. The millionaire's tax on income would also do it (though I prefer raising the cap because it keeps it all within the SS system.) The other purpose for lifting the cap is simply to place the system in solvency during these coming years when huge numbers of boomers will be retiring.

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Response to frazzled (Reply #4)

Fri Dec 23, 2011, 12:40 PM

5. Exactly. Those who already looked askance at

 

raising the cap (1%ers and wanna-bes) will continue to oppose any attempt to make it more progressive. I'm not sure how temporarily cutting the payroll tax for those who most feel its burden undermines the case for making the system more progressive.

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Response to stockholmer (Original post)

Fri Dec 23, 2011, 12:49 PM

6. I don't think so to the first, possibly to the second

Lifting the cap won't hurt people who make under $100,000 dollars. I believe the cap is above that, so it'll make no difference for the sort of folks who were on the stage with Obama yesterday. Republicans will scream if people in the upper brackets have to pay, in any case. (Not saying $100,000 is rich, mind you.) No change there.

Taking money out of the Social Security tax and replacing it with general revenue does dilute the argument that Social Security pays for itself. It does make SS contribute to the general budget deficit. Even though it won't be a huge contributor, the Republicans can blow it all out of proportion. Plus, they can decide to take that money back in future budgets, thereby reducing the amount of money available to make SS payments.

I don't know that makes the tax holiday a mistake, but I don't think it does us any good to put our heads in the ground and deny that this holiday puts SS at some risk. I hope we're able to cancel the holiday at the end of 2012.

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Response to stockholmer (Original post)

Fri Dec 23, 2011, 12:52 PM

7. No, we favor progressive tax policies and they favor regressive tax policies


lifting the cap is a progressive policy



It isn't that they are against taxes, they are against taxes on the rich. We need to make this clear and have spent 30 years getting it wrong.

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Response to Motown_Johnny (Reply #7)

Sat Dec 24, 2011, 12:30 AM

12. Is SS supposed to be a progressive program?

 

If so why don't we cut off the wealthy from receiving any benefit?

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Response to dkf (Reply #12)

Sat Dec 24, 2011, 08:00 AM

13. progressive TAX policies


and we don't want to start cutting people off from benefits because once you open that door you can never close it again

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Response to Motown_Johnny (Reply #13)

Sat Dec 24, 2011, 01:27 PM

14. Are you kidding me? SS is the most regressive tax policy we have.

 

From the first dollar and capped?

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Response to dkf (Reply #14)

Sat Dec 24, 2011, 08:20 PM

15. which is why the cap should be lifted

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Response to Motown_Johnny (Reply #15)

Sun Dec 25, 2011, 08:24 AM

16. Then you either payout more or it loses it's "retirement program"

 

Aspect and turns into "redistribution".

As a tax it's regressive, as a payout it's moderately progressive but not so much that it is perceived as unfair.

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Response to dkf (Reply #16)

Sun Dec 25, 2011, 09:00 AM

17. It is already the case that those who pay more in get larger payouts

No one suggests changing that. Right now, and always, pay in more, get more. The benefit rates could rise, there is no reason not to do that except lack of money, without the cap, that issue is gone.
This game of pretending that Social Security is right now a set amount for all, no matter what they paid, is a rhetorical trick.

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Response to dkf (Reply #16)

Sun Dec 25, 2011, 11:56 AM

20. Redistribution? Seriously?


The people getting rich do so at the expense of others. That is simply the way capitalism works. If some of their profits need to go back to the people who helped them get rich then so be it.

What Reagan did was redistribution.

He (and his allies) changed tax laws to give more money to the wealthy and then told everyone that they would spend it so everyone would do better. Well, they didn't spend it and the vast majority did worse. I don't know if that was the plan all along or if their incompetence was so overwhelming that they actually believed it. Either way it didn't work.

Now THAT was redistribution.

Fairness isn't redistribution.

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Response to stockholmer (Original post)

Fri Dec 23, 2011, 12:55 PM

8. A n important question:

How important is the self-funding mechanism of Social Security? If, for example, half of the benefits were taken from the general fund to cover tax cuts, would it affect the program at all? Would it be easier to cut if the Republicans were in charge of the entire government? Would Repubs be committed enough to cut other programs, such as Defense, to continue paying the full benefits of SS? I think those are legitimate questions we should ask ourselves?

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Response to kentuck (Reply #8)

Sat Dec 24, 2011, 12:15 AM

10. IMO, the self-funding mechanism is fiscally unimportant but politically important

You can see it on DU, where a reference to the possibility of cutting benefits will often provoke several people to denounce the "theft" of the money and to call for someone to be imprisoned. It wouldn't be theft in the legal sense. From that point of view these posts are completely baseless. Nevertheless, the funding of the program from dedicated taxes means that the people who've been paying those taxes feel an ownership stake in the program, as they would with a private pension fund. That feeling isn't limited to DU; it's widespread, even among Republicans. That mindset creates a strong political barrier to benefit cuts.

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Response to Jim Lane (Reply #10)

Sat Dec 24, 2011, 12:28 AM

11. Which is why raising the cap should mean raising the benefits if you want to keep it consistent.

 

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Response to dkf (Reply #11)

Sun Dec 25, 2011, 09:11 AM

18. That is of course going to happen

The structure of the program is such that payouts are higher for those who paid more in, up to a certain ceiling. That ceiling could easily raise, it automatically does already, with COLA. If the cap was raised or eliminated, raising the monthly benefits would be a matter of simply doing so, the amounts are not set dollar amounts now, and they are already not the same for all beneficiaries, so the principles of the program are : pay more in, get larger benefit. There is no reason to think that principle would change at all. That is how it is, how it always was.
To alter that principle would require changing the law in Congress. To raise the dollar amount of benefits does not. It is really quite simple.
Also, unless your income is at least 6 figs yearly, none of this alters your own pay in or payout at all.

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Response to Jim Lane (Reply #10)

Sun Dec 25, 2011, 12:06 PM

22. You are correct. And this is precisely why Republicans want to decimate the program.

Ditto with Medicare. They want people to say "It's not worth it." They know that that is the only way to get rid of both of them. When they are sufficiently de-funded people's support will also wane. That's the game plan of the republicans.

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Response to kentuck (Reply #8)

Sun Dec 25, 2011, 12:10 PM

23. Look at it another way

Social Security will soon need to draw on its IOUs - and that will be done using money from the general funds. The legislation that created this payroll specifies that the money not collected will be replaced by general funds money. If you think that the latter won't happen, why do you have faith the former will happen?

In fact, as the general funds money to replace the tax is needed NOW, it is more likely to happen. It is hard to argue that it could lowered the amount in the trust fund, because there is no money in the trust fund that COULD be taken for this year's payments - only IOUs on the general fund. (If you are really cynical or pessimistic, you may believe that the trust fund really will not get all the money it needs when it needs it because doing so would leave the general fund with too little money. (If so, what really happened in the 1980s was that Reagan and the Congress raised a relatively regressive tax and used the money that was supposed to be prudently saved for the babyboomers' retirement as if it were general funds. )

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Response to stockholmer (Original post)

Fri Dec 23, 2011, 12:55 PM

9. I have to agree with Bachman on this

But lowering the payroll tax is a good first step toward finding alternative funding. Such as a transactuon tax.

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Response to stockholmer (Original post)

Sun Dec 25, 2011, 09:41 AM

19. No it does not. I'm not that crazy for the payroll tax cut, but it does not mess with

the case for lifting the cap at all. I want the cap eliminated or raised extremely high. I am not really thrilled with the cut. The cut will not undermine the case for lifting the cap. That's what I think.

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Response to stockholmer (Original post)

Sun Dec 25, 2011, 11:59 AM

21. It already was defined as a tax increase by the Republicans - because it is

The fact is we will need more revenues for social security precisely because the Republicans have been saying that the general funds will not be able to pay back the IOUs that were used ---- for things like giving the tax cuts!

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Response to stockholmer (Original post)

Sun Dec 25, 2011, 12:16 PM

24. I think what Obama is trying to do requires a complete new mindset

Why are we talking about lifting the cap in the first place? Forget that. The people at the cap are not wealthy by any stretch of the imagination. What is the cap now? Little over a hundred grand? That is not wealthy with the current cost of living by a long shot.

I have a better idea. Lets start at the top and tax the wealthiest until we have enough to finance Medicare and Social Security for everyone.

They get the most benefit from it anyway. The wealthy have better health care and generally live longer than the rest of us. Let the wealthy pay for it all. How does that sound?

Don

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