Cutting the Payroll Tax is a bad idea, period.

[garybeck]

As we know, social security is funded by the payroll tax.

Cutting the payroll tax means defunding social security.

Social security is fine now, and for the next 26 years.

If funding to social security is decreased, it will not be fine for the next 26 years.

This will create a scenario where social security payments will have to be cut.

Cutting the payroll tax will directly result in cutting social security benefits.



As Bernie Sanders has so clearly stated, we need to remove the cap on the payroll tax, not cut it. Removing the cap would make social security fine well past the 26 years.

Obama said when he was running for President that he wanted to do this -- remove the cap on the payroll tax. Why is he doing the opposite, which will only result in the need to cut benefits to the people who need it the most?

Bad idea.

If they really want to create jobs, they should take some of that military spending and put it towards infrastructure and fix some of these roads and bridges that are crumbling. That would create jobs. Cutting the payroll tax won't. It will only force the cutting of social security payments.

[RKP5637]

1. K&R

[ProSense]

2. Um,

"Cutting the payroll tax will directly result in cutting social security benefits."

...no it will not!

Dean Baker: The Payroll Tax Cut Did Not Cost Security Revenue

Video: CBPP President Robert Greenstein discussed the President’s jobs proposal...

[kelly1mm]

7. You are right - the lost payroll tax is being made up by general revenues. BUT,

this makes the arguement that SS does not add one dime to the deficiet / national debt no longer true since 40% of general revenue is borrowed. Thus, 40% of the funds used to make up the payroll tax holiday are being borrowed.

No free lunches.

[Demit]

12. Yup. And later they'll be able to say that we're borrowing to pay for SS and gosh, we can't afford

that! It'll be true, and people will forget why, and Repubs will have another weapon in their arsenal to drastically reduce if not kill Social Security. Rush Limbaugh & company will be ALL over it with the half-truths.

[garybeck]

13. Nah.

the point you are missing is that Social Security is solvent, always has been, has a $2.6 trillion surplus now, and HAS NOT CONTRIBUTED A PENNY TO THE DEFICIT. Why is this? It is because it does NOT take money from the US Treasury, it only takes money from the Payroll Tax.

If you change that, and fund social security with the US Treasury, you open the floodgates and change the whole game. Then you can no longer say it is solvent. Then you can no longer say it doesn't contribute to the deficit. Then you can no longer explain to tea partiers and morans that there is no problem with social security.

Bad idea. Leave social security alone. My grandparents need it today. My parents will be needing it soon. and I will be needing it. If they raise the cap on the payroll tax, it will be fine for much longer than 26 years.

if you still don't get it, Bernie will explain it to you here:

http://www.youtube.com/watch?v=zIp2LvGxLko

[ProSense]

20. Actually

"HAS NOT CONTRIBUTED A PENNY TO THE DEFICIT"

...the point you're missing is no one (besides Republicans) said it did.

When Bernie Sanders proposes to strengthen Social Security, he isn't suggesting doing so for the hell of it.

Still, that has nothing to do with the point of the OP, which is inaccurate.

The payroll tax holiday has no impact on Social Security benefits.

[kelly1mm]

26. Wrong. Since the first payroll tax holiday, SS DOES now contribute to the debt.

The funds 'lost' to the President's payroll tax holiday are being replaced by general revenue funds, 40% of which are borrowed. So it is now incorrect to say that SS does not add to the deficit / national debt.

[kelly1mm]

24. That train has already left the station. The current payroll tax holiday

already uses general fund revenues (which are currently about 40% borrowed funds) so we can no longer say that SS has not contributed a penny to the deficit. This just makes it worse.

[CaliforniaPeggy]

3. Damn right!

I missed that part of the speech, but this is a very very BAD move.

[Warpy]

4. Cutting the tax rate is a brilliant idea

because that's undoing Reagan's shifting of the tax burden away from plutocrats and onto the backs of the poorest workers.

I agree that the cap needs to be raised and I think it will be raised.

However, the tax on workers and on labor intensive businesses has been an onerous one since Reagan raised it six times. It's time to lower it to a more sensible rate.

[Lasher]

9. I don't like the payroll tax cuts but that is a good point.

[Exilednight]

32. It's the stupidest idea ever invented by a Democratic president. It's triangulation

at its worst. I, too, agree that the payroll cap needs to be raised, but reality states that it won't be. There is no one in government, Obama included, who has the balls to do it.

[mmonk]

5. The whole point is what you mentioned:

"If funding to social security is decreased, it will not be fine for the next 26 years."

"This will create a scenario where social security payments will have to be cut."

[Little Star]

6. I agree BAD idea!

[sasha031]

8. I hate the idea

I'm afraid it will become permanent and SS will get blamed for contributing to the deficit.

[mzteris]

10. the economists i heard today said it would encourage HIRING

which is the freaking point! getting people back to work> you have to have people working to pay IN to SS!

[Hoyt]

14. Exactly. If the economy doesn't improve, everything will be cut.

We can tax every penny from the "rich" and slash the military -- but until people have decent jobs, we keep going down the tubes. This may make only a small improvement in the jobs situation, but a bunch of small improvements will add up.

[garybeck]

17. I'd love to hear a logical argument of how cutting the payroll tax will increase hiring, but

I have yet to hear one.

If you think of it logically, cutting payroll tax (fica) will put a few more dollars into people's pockets.

if you think that is going to stimulate the economy and create jobs, you are just believing the same trickle down economics lie they've been trying to sell us for the last 20 years.

[mzteris]

28. the more people the small business hires

the more they can potentially save.

[Exilednight]

34. Not true. Each employee at the company I work for adds a minimum of

$12,500 that has to be paid out in benefits alone. Once you include their pay, the number will more than triple for each hourly worker we wire. I've been lucky in that I've been working for a small company that has been growing, but any tax cut that Obama has outlined provides no incentive to make up for nearly $40,000 in costs for each worker.

Just to make up that difference, with Obama's tax cuts, we would have to produce nearly ten times the cost of a worker.

So basically, for every worker we hire we have to produce an additional $400,000 on average in annual revenue.

[mzteris]

36. well, i guess you know more than the five top economists. n/t

[Exilednight]

38. Depends on your list of top five economists. Even Krugman

acknowledges that the $4000.00 tax incentive will not spur hiring.

The real meat of the stimulus is the infrastructure spending. It's been proven time and time again that tax cuts don't work as a stimulus.

[bvar22]

37. That is just more NeoLiberal, Supply Side, Voo-Doo bullshit.

NO employer hires somebody because he got a tax break.
Employers ONLY hire because there is a demand his current staff can not meet...PERIOD.

It has been demonstrated time and time again that Tax Breaks are the least efficient form of stimulus.
If Tax Breaks created DEMAND, then Bush-the-Lesser would have fixed The Economy.
We would be Rolling in JOBS because of the Bush Tax Breaks, and the Obama Extensions.

Didn't Happen.

You will know them by their WORKS,
not by their excuses.

Solidarity!
--------------------------------------------------------------------------------------------------------------------------------

[Exilednight]

33. It's been proven time and time again, tax cuts do not create jobs. If it did, we would

now have more jobs than people.

[Warren Stupidity]

11. The cut is made up from general revenue.

The FICA tax rate difference between the 'cut' and the official rate is made up from non-fica tax revenue, primarily income tax revenue.

Income taxes are progressive, the richer you are the more you pay. The FICA tax is a regressive flat tax capped at 104,000 of income.

I'm fine with rate cut as long as it is, as it is now, made up with other funds. In fact I think the cut should be expanded and all of the FICA revenue should be from the general fund. Permanently.

[garybeck]

15. and that is also a bad idea.

we do not want social security to be funded by the treasury. the fact that is not funded by the treasury is itself the reason why it can't be blamed for the deficit. (see post #13.)

remove the cap on the payroll tax and it becomes much less regressive.

I also don't follow the argument anyway, that the cut will be made up with from income tax revenue. That argument is based on the idea that cutting the payroll tax will increase hiring. I fail to see the logic there. If FICA tax is reduced, that just means that people who already have jobs will have a little more money to take home. If you think that's going to create jobs, you are just buying the trickle down economics idea, and that is a big lie.

i keep hearing that the FICA cut will be made up for somewhere else, and it will not affect social security funding, but it just doesn't pass the sniff test. Unless you are going to RAISE taxes somewhere else, and you KNOW that ain't going to happen under this president, at least not in this term.

[Warren Stupidity]

21. It isn't an argument it is a fact.

The reduction in FICA witholding is made up, by the law that enacted the reduction, by transfers to the SS fund from general revenue.

[garybeck]

25. and the minute that the SS fund begins to be funded by general revenue

it can be said that it contributes to the deficit.

and when they say it contributes to the deficit, you know what's next.

this is a setup. i'm amazed more people don't see it. But evidently a lot of people are seeing it and they are upset. the internets are a buzz about it, as well should be.

[Modern_Matthew]

16. Oh, well. I make less than $10,000 a year and I'd rather have that money now...

At this rate, I'll never see a Social Security check anyway (I'm 23)... so give me all you can right now, please.

[garybeck]

19. Why do you think you'll never see a social security check?

it's only because the fearmongers and the liars have been beating this into you for years.

the truth is that SS is solvent for the next 26 years. it has a $2 Trillion surplus. to make it solvent for more than 20 years and cover your ass when you retire, all they have to do is lift the cap on the payroll tax and you won't be living on the street when you turn 65.

[Fuddnik]

35. The right wing said the same thing when I was 23.

And I'm 60 now.

They've been trying to raise doubts and kill it since it's inception.

[Swede]

18. Cutting the Payroll Tax is a bad idea, question mark?

I think it's a good idea.

[FrenchieCat]

22. We'll just have to lift the cap, and then

lowering the payroll tax becomes an excellent idea!

What my understanding is, if made permanent..than yeah....not good...
but temporarily, until we can get a Dem house back, it will have to do
in a time of crisis.

[Mojambo]

23. Raise the cap AND cut the rates.

Funding stays the same and poor/middle class get a desperately needed break.

Win/Win.

[GeorgeGist]

27. Bubba is back.

strantriangulating us again.

[Enthusiast]

29. Cutting the Payroll Tax is a horrible idea.

I'm with you.

[blindpig]

30. Back door defunding.

That money could have as easily been found by reducing the portion of withholding which goes to the general fund.

They are destroying Social Security before our very eyes, the New Deal is dead, dead, dead.

And who is holding the knife?

[quiller4]

39. Actually since the current and proposed "tax holiday" include a

transfer of the total defered tax collection from the general fund to Social Security trust funds, their is no defunding taking place.

Read the legislation before you get your panties in a twist.

[xchrom]

31. recommend