On Sat, Sep 10, 2011 at 8:42 PM, michael perelman <[email protected]> wrote: > In the sort run, it is not regressive, but the long-run damage to > Social Security certainly is. Once the federal budget reimburses the > trust fund, the Repubs. will dispute that the program is self > supporting.
Note that that wasn't Matt R's argument at all. It's true that *if* the long-run consequence of the payroll tax holiday were to be that it significantly increased the exposure of SS to political attack, and that resulted in benefit cuts, then the payroll tax holiday would turn out to have been regressive - but that's a speculative chain of reasoning based on assumptions about the probability of future political actions and their consequences - certainly nothing like comparing tax incidence in the present. As it stands now, SS benefits are under threat because of the proposal to change the cost of living adjustment, and the payroll tax has nothing to do with it. People who want to cut SS aren't talking about the payroll tax at all, nor the fact that the program is self-financing. Furthermore, as things currently stand, in the near future the payroll tax, on the basis of current receipts, will not be financing current benefits by itself. Some benefits will be financed from general revenues to pay back the bonds in the Social Security Trust Fund. At which time people who want to argue that Social Security is not self-financing will cite that fact to claim so. So, in terms of setting precedents for the future, one could just as well argue that it's a good idea for people to get used to Social Security benefits being paid from general revenue - just as in the past, the payroll tax paid for general expenditure (e.g., Reagan's military buildup.) Finally, if any decision to have a payroll tax holiday would have the effect of threatening Social Security benefits in the future, then the cow has already left the barn, because we already have a payroll tax holiday. So if one wishes to argue that the proposed extension of the tax holiday significantly threatens Social Security in the future, then I think one would have to argue that the extension is a significant additional threat, over and above the threat imposed by the holiday that we have now. > On Fri, Sep 9, 2011 at 8:20 AM, Robert Naiman > <[email protected]> wrote: >> Whatever else may be true, cutting the payroll tax paid by workers is >> *not* "pretty regressive" - it's not regressive at all. I > > -- > Michael Perelman > Economics Department > California State University > Chico, CA > 95929 > > 530 898 5321 > fax 530 898 5901 > http://michaelperelman.wordpress.com > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > -- Robert Naiman Policy Director Just Foreign Policy www.justforeignpolicy.org [email protected] _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
