Obama, GOP Plans for Payroll Tax Holiday Could Unravel Social Security
Press Release
Social Security Works
December 7, 2010Washington, D.C. — The payroll tax holiday recently unveiled by President Obama and Republican Congressional leaders could lead to the “unraveling of Social Security,” charged Eric Kingson, Co-Director of Social Security Works and an expert on Social Security.
“It’s easy to enact tax cuts,” said Kingson. “It’s very hard to get rid of them, as we have seen for the last year during the debate about the expiring Bush tax cuts. Democrats have just been backed into a corner on the tax issue and forced to renew tax breaks for the wealthy despite making it a top campaign pledge that they would not do such a thing. Why should it be any different next year when Republicans scream that Democrats want to raise your payroll taxes by 50 percent as the 2012 election approaches.”
President Obama has proposed reducing the employee’s share of the payroll tax from 6.2 percent to 4.2 percent. Restoring the 2 percent lost due to the payroll tax holiday would be a nearly 50 percent tax increase on what workers would be paying throughout the year.
Two percent of taxable payroll is what Social Security’s actuaries calculate is needed to put Social Security in surplus for the next 75 years. “There are already many in Washington who want to cut Social Security’s modest benefits, which average just $13,000 a year,” claimed Kingson. “If the tax cuts became permanent and if a future Congress chose not to continue to reimburse the Social Security Trust Funds for the lost revenue, today’s manageable shortfall would double, becoming much less manageable. There would be tremendous pressure to make deep cuts to middle class benefits, even as the population was rapidly aging.”
“A payroll tax holiday will also promote Social Security privatization,” charged Kingson. “Once people get to put the 2 percent in their own pockets, they will be more susceptible to appeals that they should be able to put the funds into a private account where it can be gambled on Wall Street.”
“All of these likely scenarios, if they occur, will result in the unraveling of Social Security,” claimed Kingson.
http://strengthensocialsecurity.org/media/press-release/obama-gop-plans-for-payroll-tax-holiday-could-unravel-social-security
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