Alternet
Published on Alternet (http://www.alternet.org)
Home > Trump's Got a Devious Project Going to Gouge Social Security
Trump's Got a Devious Project Going to Gouge Social Security
By Steven Rosenfeld [1] / AlterNet [2]
April 10, 2017
The Trump White House has found a new way to dress up the old right-wing
cause of dismantling Social Security.
According to an April 9 report [3] by the Associated Press, The Trump
administration and House Republicans are looking at repealing the payroll
tax as a way to put several thousand dollars a year more into the checkbooks
of working- and lower-middle-class households. This 12.4 percent tax, split
evenly between employers and employees funds Social Security. The
self-employed pay the full 12.4 percent tax.
"White House aides say the goal is to cut tax rates sharply enough to
improve the economic picture in depressed rural and industrial pockets of
the country where many Trump voters live," the AP report [3] said. "The
administration so far has swatted down alternative ways for raising
revenues, such as a carbon tax, to offset lower rates."
The AP report said this was one of several tax reform proposals that White
House and congressional Republicans have mentioned when studying tax-reform
options. Stung by the failure of the House's first attempt to repeal
Obamacare, the White House is taking a more active role in shaping a major
tax reform bill, the AP said.
A payroll cut "would give a worker earning $60,000 a year an additional
$3,720 in take-home pay, a possible win that lawmakers could highlight back
in their districts even though it would involve changing the funding
mechanism for Social Security," the AP reported, citing a lobbyist "who
asked for anonymity" to discuss "early negotiations."
It is hard to know if this report is an intended leak-an old Washington
tradition to float ideas to gauge reaction before taking a public stance, or
a serious proposal that would fulfill House Speaker Paul Ryan's long-held
goal turning Social Security into a hybrid public-private system, where
Americans would give some of their savings to Wall Street to invest. Wall
St. has long coveted those billions.
Conservative Republicans have been targeting Social Security for decades,
saying it and Medicare are bankrupting the government. That's always been
cover for not raising taxes on a variety of income-producing activities from
the wealthy. Yet they persist, saying that Social Security is not
sustainable because in 2033 a spike in the baby boom generation will require
an infusion of funds or a 20 percent benefit cut. The program is not allowed
to operate in the red.
The politics of repealing the payroll tax as part of a bigger corporate tax
cut are transparent. The GOP would be hoping that many Americans would take
money in the short run and not look at the longer-term impact of destroying
the nation's foremost senior safety net, which, if anything need to be
better funded to increase benefits to keep up with the cost of living.
The GOP may be hoping that offering something appealing to lower-income
voters will divert the focus from the multi-billions at stake in cutting
corporate taxes. Those sums, such as all the corporate income kept offshore
to avoid paying taxes, could be used to bolster safety nets. In the
meantime, Trump has refused to release his tax returns, which, once public,
would show Americans a vast array of tax-avoidance schemes and techniques
that only the rich can access and use.
Steven Rosenfeld covers national political issues for AlterNet, including
America's democracy and voting rights. He is the author of several books on
elections and the co-author of Who Controls Our Schools: How
Billionaire-Sponsored Privatization Is Destroying Democracy and the Charter
School Industry [4] (AlterNet eBook, 2016).