Republicans are Considering Eliminating the Social Security Payroll Tax as Part of a Grand Tax Reform Scheme

2017-11-07T15:22:09+00:00April 10th, 2017|Equal Time|

 

“One [proposal] circulating this past week would… eliminate much of the [Social Security] payroll tax…” 

Sources:
Associated Press Article

Congressional Correspondent:
Josh Boak and Stephen Ohlemacher

Correction:

Associated Press correspondents Josh Boak and Stephen Ohlemacher report this week that Republicans are considering eliminating the Social Security payroll tax as part of a grand tax reform scheme. Their reporting is based on an unnamed “GOP lobbyist.” Eliminating the payroll tax may be the lobbyist’s pet cause — or it could be a trial balloon from the Trump administration. Either way, the AP story seriously lacks context or balance. The piece touts the $3,700 extra that a worker making $60,000 per year would gain in take home pay, making the payroll tax rollback seem like a gift to working people. In reality, eliminating the payroll tax could rob Americans of their retirement security — including that worker making $60K.

The story doesn’t mention that the payroll tax has been a pillar of Social Security for more than 80 years. Workers pay into the system knowing they will receive Social Security benefits upon retirement, disability or death. According to the AP article, Republicans would change Social Security’s financing by substituting the traditional payroll contribution with a value-added tax (VAT). This would convert Social Security from an earned benefit to ‘just another’ government social program subject to the whims of fiscal hawks. The financial security of America’s seniors would suddenly have to compete with the budget demands of other government programs, potentially pitting seniors against other vital domestic interests. But the AP story excludes these negative consequences. The article notes that the proposal would likely run into opposition from Democrats “who are loathe to be seen as undermining Social Security,” implying that any objection to the proposal would be for the sake of appearances. No, Democrats would fight the elimination of the payroll tax to protect a worker-funded program that has the overwhelming approval among the majority of Americans. They know what the AP story doesn’t say: that Social Security has provided basic retirement security since 1935 — and kept multiple generations of seniors out of poverty.