A Taxing Dilemma
September 27, 1999
Friday's USA Today reports that 80 percent of Americans pay more in
Social Security payroll taxes than in income taxes. Social Security will this
year run a payroll tax surplus of roughly $70 billion, which is siphoned off
for other projects, yet neither President Clinton nor Congressional Republicans
have made any concrete steps to either reduce payroll taxes or ensure that current
surpluses are dedicated to Social Security.
As USA Today notes, future retirees face a negative rate of return
on their payroll tax "contributions" to Social Security. The best way to save
Social Security is not to raise payroll taxes even higher, it is to dedicate
today's "extra" payroll taxes to establishing personal retirement accounts.
This is a tax cut that will benefit the poorest Americans most, putting real
money in a real account that neither Democrats nor Republicans can touch.
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