Monday, January 24, 2005

The Other Social Security Shoe Drops: Pay for it with Regressive Taxation

What a surprise that the ugly spectre of a Value Added Tax - a regressive national sales tax, unaccountably popular in Europe - pops up as the Repugs continue their policy of demolishing Social Security. The current payroll tax system is already pretty regressive, but a VAT would be worse - a lot worse.

President Bush's drive to overhaul Social Security should lead to consideration of a value-added tax or other ways to fund the entitlement program, the chairman of the House tax-writing committee said yesterday.

Congress also should consider basing benefits on such factors as race, sex and the job a retiree once held, said Rep. Bill Thomas, R-Calif.

What in the world is Thomas talking about? Should we pay women less because they live longer or make them pay more? What about the many blacks who don't live long enough to collect? It's better to keep the system as is than it is to open these cans of worms, but the secret behind Thomas' blather is to turn people against one another. And also to force women to work longer, as he blithely says later in the article. But as for taxes:

Thomas dismissed the idea of raising the limit on payroll-tax deductions from the current $90,000, which would make wealthier people pay more into the system. "Why even bother looking at the payroll tax? That was a solution in the 1940s and the 1950s," he said, when the rate was 2 percent of income.

All Thomas is interested in is making the tax more regressive, as you can see from his remark above. This isn't a solution, it's more Repug class warfare on the middle and working classes.

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