End the payroll tax
Whatever its past political advantages, the payroll tax now imposes an unnecessary burden on a stagnating economy. In an era of mass unemployment, mediocre wage growth and weak mobility from the bottom of the income ladder, it makes no sense to finance our retirement system with a tax that falls directly on wages and hiring and imposes particular burdens on small business and the working class.
What’s more, the payroll tax as it exists today can’t cover the program’s projected liabilities anyway, and the pay-as-you-go myth stands in the way of the changes required to keep Social Security solvent. All of the components of a sensible Social Security reform — means-testing for wealthier beneficiaries, changing the way benefits adjust for inflation, a slow increase in the retirement age — become easier if the program is treated as normal safety-net spending rather than an untouchable entitlement with a dedicated funding stream.
By cutting the tax rate and promising to make up the difference out of general revenue, the payroll tax holiday took a big step in this direction — and letting it expire would take a big step back. Republicans have every reason to recognize this reality: their long-term size-of-government goals require Social Security reform, and the illusions fostered by the payroll tax are an obstacle — originally created by their political enemies! — to any restraint in what the program spends.
Blowback
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So, this would have been an idea to pursue — if Romney had won. I don’t see it going anywhere with the Democrats.
Count to 10 on November 25, 2012 at 10:43 AM
End ALL payroll deductions – income tax withholdings, payroll taxes – and we’ll get the small government we want very quickly.
Monkeying around with paychecks is a sinister, yet subtle way that the politicians keep their power. If people actually had to write a check to the Feds once a year, things would change fast.
jr.ewing.78 on November 25, 2012 at 10:43 AM
True, you’d get more taxpayer activism. But you’d also get more straight-up tax-dodging which would induce more IRS aggression and more national borrowing.
Robert_Paulson on November 25, 2012 at 10:51 AM
I say end the taxes too, and end the programs. Get the old people back on the payroll!
astonerii on November 25, 2012 at 10:59 AM
The GOP is the party of old white people… or so we’re told… so let’s let the “People of the Future” advocate for not paying payroll taxes.
ninjapirate on November 25, 2012 at 10:59 AM
End ALL with holding from paychecks, let tax payers WRITE the check come April 15, and see how rapidly the pitch forks and demands for reform come about…
But, since that will never happen – sheeple.
locomotivebreath1901 on November 25, 2012 at 11:00 AM
You won’t see entitlement reform by shifting costs to the rich, or into more debt, which you have to do to keep SS and Medicare going.
Instead, jack up FICA to where future liabilities are paid for and watch the benefit classes squeal. This is one tax that is paid by everyone for programs that benefit everyone. And the rich have their benefits capped, so they pay a bit into the pot for everyone else. People need to know the real cost of these programs, and understand the regressiveness of the tax.
Either raise FICA taxes for everyone to keep SS and Medicare solvent or get rid of the programs and the taxes.
shuzilla on November 25, 2012 at 11:15 AM
I think withholding taxes started during the war. The rationale was that the government could not wait until the end of the year to get the money it needed for funding the war effort, so getting money NOW was important. The promise was that it would end when the war ended. But once politicians got hooked to the ‘easy money now’ drug, that promise was forever forgotten.
I think this is how it went, maybe someone could correct me if I’m wrong.
Mimzey on November 25, 2012 at 11:22 AM
Agreed.
The same as the repeated promise to cut spending later for agreeing to raise taxes now.
It’s happening again now. Watch. The same thing will happen..”I’ll gladly pay you tomorrow for a hamburger today”.
Mimzey on November 25, 2012 at 11:25 AM
So that the 47% can not contribute to the federal government even more. No payroll taxes goes back into force on January 1st.
Illinidiva on November 25, 2012 at 11:37 AM
More free stuff!!!
God help us all.
America is in a Death Spiral.
faraway on November 25, 2012 at 11:46 AM
I’m freelancing and payroll taxes are killing me.
Dack Thrombosis on November 25, 2012 at 12:07 PM
I just want to see a flat 10% tax or so that every person has to pay regardless of income.
The tax would have to be paid not by payroll deduction but with a check every month.
And no one that gets a check from the government can vote, that includes all fed employees and welfare takers.
Boom! sanity in government and spending solved.
esnap on November 25, 2012 at 12:15 PM
So you’re against servicemembers voting? Cause ALL their checks come from the government.
SgtSVJones on November 25, 2012 at 12:30 PM
“Social security is perfectly solvent, nothing to see here” — idiot libs
Social security was NEVER stupposed to be an entitlement or wealth redistribution program. We each got paid relative to what we put into it, hence the personal social security number
The fact that it’s now an entitlement program, is a perversion
Obama campaigned in 2008 on taking off the 106K cap on SS taxes– he wanted the “rich” to pay 6% of ALL income into SS
Now we’re talking about means testing
Neither should be on the table unless we have an opt out for younger taxpayers.
Make a private SS option as Ryan and others have proposed, that’s the only solution to a Ponzi scheme of the first order like this
Taking it out of the general fund like Douthat says just masks the Ponzi-ness from the sheep– let it be a constant festering reminder in our political discourse of how all govt entitlements rot from the inside
thurman on November 25, 2012 at 12:39 PM
It was always intended to be an entitlement program. Hence the payroll tax which was intended to make people feel as though they were paying for their own, and thus would feel entitled to the money they were promised. It was meant specifically to make Social Security politically impossible to repeal. Thus far it has worked.
Social security was also never intended to remain solvent. Hence the date certain for retirement that was not automatically increased along with the life expectancy of the population at large. It was meant to overwhelm the government and eventually bring forth even more socialistic actions over time.
It was all baked into the cake at the original vote.
astonerii on November 25, 2012 at 12:47 PM
Also, I think we should receive and itemized receipt for our payments. Maybe not down to the individual item, but at least broken down to the specific funding bill (pork), agency, program, etc. Imagine getting a 2000 page list of every expenditure made by the gov’t along with an individualized amount of how much you paid.
gregbert on November 25, 2012 at 1:18 PM
For the vast majority of tax payers, it would be one sheet of paper listing the most enjoyable aspects of government expenditures. Military, courts…
The rich, who pay massively more money will be the ones getting the 2000 page book for what they paid for.
astonerii on November 25, 2012 at 1:49 PM
I could get behind that. I could EASILY imagine people looking over their itemized bill and going “I pay how much for what?!?“
MelonCollie on November 25, 2012 at 3:16 PM