I'm Pete du Pont with the National Center for Policy Analysis. Some democrats want to cut the social security payroll tax in lieu of income tax rate reduction.
And on the surface, it sounds fine: Three-quarters of workers pay more in social security taxes than federal income taxes.
There's just one problem: Unless a payroll tax cut is tied to long-term social security changes, it'll only undermine retirement funds and hinder real reform in the future.
Unlike other taxes, there are specific benefits attached to social security contributions. Most workers get back everything they pay in low-wage workers get back a lot more. So looking at taxes and benefits together, the system's highly progressive.
But in about 15 years we'll have to start raising payroll taxes above their current level to pay promised benefits to the baby boom generation. They'll go up almost 20 percent by 2075. Social security is important; cutting the payroll tax makes it that much harder to do.
Those are my ideas, and at the NCPA we know ideas can change the world. I'm Pete du Pont. Next time, democratic capitalism.