Nathan’s had a series of good posts recently the kind of social security reform we should all be behind: taking on the regressive income cap on the payroll tax so that Bill Gates no longer can finish earning his payroll contribution for the year long before he wakes up on New Year’s Day. Payroll taxes are a huge chunk of the tax contributions made by low income Americans in the post-Reagan era, and that a CEO making millions a year pays no more in absolute dollars than an employee making $90,000 is an outrage we should be hearing much more about from the Democratic side of the aisle. It’s time they did, because it would be good for the country and as Nathan observes, it would be good politics as well:
The argument against talking about a deal is reasonable as short-term politics: when your opposition is stumbling, let them fall on their feet. But that does buy the idea that there’s nothing wrong with Social Security that needs fixing. No, there is no funding crisis, but the reality is that social security is fundamentally a regressive tax…This has been a problem for decades and progressives never took proactive action to improve the situation. Which opened the door for this rightwing attack in the first place…We know that House Republicans won’t agree to elminating the payroll tax cap, so there is no danger that proposing it as a reform will be met with any real negotiation on the issue. But we can slam the conservatives for supporting such a regressive policy.
And since progressives don’t believe there is a crisis, we don’t think there needs to be any new revenue raised TODAY, so any rise in revenue from eliminating the payroll tax cap should be matched with an overall cut in payroll tax rates paid by average workers– probably equivalent to saving them 2-3% of their income. Yes, Dems should be proposing a TAX CUT! You want wedge politics, you’ve got it. Many progressives have pushed for raising the cap to cut payroll taxes over the years (see here), and we should not abandon pushing the idea just as national attention is on social security. Progressives are not going to revive their national fortunes by only playing defense and defending the status quo. They need to play political jujitsu to take ideas put on the national agenda by Bush and use that debate as a vehicle for selling a vision of better, more progressive alternatives. Otherwise, we may win a few rearguard fights, but we won’t move forward in building broader support for the changes WE want.
And as Nathan further notes, eliminating the cap will keep social security solvent for most of a century, while gaining many more voters than it would lost. The polling bears it out as well…