I was reading various articles this morning including ones on immigration reform and raising the limits on Social Security taxes...and it struck me:
Why is that we need a 'comprehensive' approach to immigration reform, but we don't need a comprehensive approach to Social Security reform?
From The Heritage Foundation:
The Economic Impact of Raising the Wage Cap
Raising the amount of earnings subject to Social Security payroll taxes would do nothing to address the wider challenge of securing retirement for working Americans. Moreover, it would have real and damaging effects on working families and the U.S. economy. Some would dismiss the negative effects by noting that “only”about 6.5 percent of taxpayers would be affected, but a large proportion of those whose taxes would increase earn less than $125,000 annually. While these workers are not poor, neither are they wealthy. Subjecting all earnings to Social Security payroll taxes would:
* Reduce the annual take-home pay of 10.3 million workers by an average of $5,650 in the first year alone after the cap is removed. Most of these workers have incomes below $125,000.
* Raise taxes on 4.0 million workers over the age of 50—just when they are trying to steer towards retirement.
* Raise taxes on 3 million small business owners.
* Greatly increase the top effective federal marginal tax rate.
* Weaken the U.S. economy by reducing the number of job opportunities and workers’personal savings. By fiscal year 2015, the number of job opportunities lost would exceed 965,000, and personal savings would decline by more than $55 billion, in real terms.
* Not save Social Security. A 2003 Social Security Administration study showed that eliminating the Social Security wage cap would delay the program’s deficits for only about six years.
Rather than focus on raising the wage cap, Congress should develop a comprehensive solution to Social Security’s future deficits that examines all aspects of the program and places a strong emphasis on increasing personal savings across all income levels. This approach would be the first step towards placing all entitlement programs on a sound financial footing and protecting our children and grandchildren from having to deal with those program’s massive deficits.