Novak: Will Bush Back Lifting Payroll Tax Cap?

[babylonsister]

http://www.nationalledger.com/artman/publish/article_272610839.shtml

Will Bush Back Lifting Payroll Tax Cap?
By Robert Novak
Jan 8, 2007

More than the ascension of Nancy Pelosi & Co. was disturbing congressional Republicans last week. They ask this question: Will President Bush embrace a tax increase that would produce potential economic disaster and guaranteed political catastrophe?

snip//

Republican concern over such an outcome stems in no small part from the belief multi-millionaire Paulson has entered a realm foreign to him. One well-placed House Republican, asking that his name not be used, expressed alarm that a financier who sold $485 million worth of Goldman Sachs stock in order to be confirmed at the Treasury cannot appreciate how the payroll tax ravages self-employed businessmen and farmers.

Eliminating the cap on payroll taxes would constitute the largest tax increase in U.S. history, estimated by the Heritage Foundation during the last Congress at $1.4 trillion over 10 years. This analysis predicted that such a step would cost nearly a million jobs and more than $55 billion in projected personal savings.

The economic woe that would result from higher payroll taxes would be matched by political damage to the president if this outcome were adopted by the Democratic-controlled Congress with his approval but support from only a few Republican legislators. That political calamity can be averted if Bush takes any payroll tax increase off the negotiating table, just as Democrats refuse to talk about a partially privatized Social Security system.

[Demeter]

1. Congressional Veto Override Number 1

There's going to be a slew of them--just watch!

[whistle]

2. So this traitor Robert Novak still shows his face in public and newspapers

....still carry his column? America....what a country!

[flamin lib]

3. That would generate $140 billion a year in increased Social

Security and medicare payments. The current shortfall between revenue and expenses at HHS is about $700 billion with SS income exceeding expenses while medicare/medicaid is bleeding.

I think removing the cap would go a long way toward helping stop the bleeding there. Sounds like a good idea to me . . .

[Warpy]

5. Which is a huge MISTAKE, see below

[Warpy]

4. It might be raised up to a maximum of $200,000

but that's only to increase income tax revenue by giving Congress more to rob and put into the general fund.

You see, 40% of everyone's OASDI is being put into the general fund. That is what we overpay after keeping our seniors alive. Congress has been using it to mask the disaster all those tax cuts for the rich from Reagan and Stupid have actually caused. That is why Reagan raised the percentage of our pay taken in OASDI premiums SIX TIMES after he threw the country into a budget disaster by screwing up the tax system.

When Johnson first got the overpayments into the general fund to defray part of the cost of the Vietnam war, those overpayments were a tiny fraction of the contributions. Reagan is the one who used an INSURANCE program as a back door tax increase on the poorest workers.

The only reform of social security that will work is getting overpayments the hell out of Congress's greedy hands. Unless we do that, we're just giving more people a back door income tax increase and disguising the deficit caused by the Paris Hilton tax giveaways.

[flamin lib]

6. Uh, no.

The excess is on loan to the General Fund in the form of Treasury Bills. The Government "buys" the excess. The entire amount of the excess is, to use an unpopular term, earmarked.

Remember when Bush opened the file drawer and said this was the "worthless IOUs"? If Government bonds are "worthless IOUs" we've got bigger problems than SS being broke.

What does anyone expect the Government to do with "excess" funds? Put them under a mattress?

On edit: I didn't see that Johnson did anything with Social Security other than expand it's coverage. Maybe you can find a cite for it here, I couldn't.
http://www.ssa.gov/history/brief.html

[Warpy]

7. "On loan?" BWAHAHAHAHA!!

The GAO has already admitted it's gone bye bye with no chance of being paid back.

Those IOUs are worth exactly as much as the paper they are printed on unless this government confiscates the last 20 years of tax giveaways that have gone to the wealthiest, FAT CHANCE!

The money has to be taken OUT OF THE GENERAL FUND FIRST.

That is the only way we're going to get anything besides more worthless paper.

[flamin lib]

8. The money is not in the general fund.

Repeat, the money is not in the general fund.

The money is in US bonds that will be sold to fund future SS needs.

Try this analogy:

You have a savings account. The money in that account is mixed with all the other savings accounts the bank has. The accounting department keeps track of who owns how much money. The bank holds only enough liquid cash to meet daily needs, the rest is sold/loaned/invested.

To take the money "out of the general fund" (which is where it ain't anyway) would be like taking your savings account and burying it in a coffee can in the back yard. That would be one really big coffee can, and you wouldn't want that anyway 'cause the savings account yields a small interest return.

Assuming you could "take it out of the general fund" where it ain't anyway, you'd have a run on the bank. Haven't you ever seen IT'S A WONDERFUL LIFE?

[Warpy]

9. You BOUGHT that?

:rofl:

[flamin lib]

10. Warpy, I have a great deal of respect for you and enjoy your posts

very much. In this case, however, you are simply incorrect. What would you consider "not in the general fund?" As best I can tell, nothing short of that big coffee can will do and that is not how the federal budget works.

We shall have to agree to disagree.

[Warpy]

11. I'm sorry, but you need to catch up on your reading

Government insiders have long admitted those IOUs are worthless and that the debt to Social Security will never be repaid.