May 25, 2005
One Democrat's proposal for Social Security reform is simple: Tax the rich, says Investor's Business Daily (IBD). Rep. Robert Wexler?s (D-Fla) plan is to raise taxes on all those who earn more than $90,000 a year by 6 percent -- with the income earner paying 3 percent and his employer paying the other half.
Among the objections to the plan is that it would remove capital from the working economy and give to retirees to spend, similar to a method tried and failed in Europe.
- The tax would hit 9.8 million Americans who work an average of 49 hours a week; 3 million of whom are small-business owners -- the kind that create most of the jobs in our country.
- It would also hit 3 million people over the age of 50, who are just beginning to retire, says IBD.
- As a result, the United States would lose $33 billion a year in gross domestic product (GDP) in the first 10 years.
- Jobs would decrease by 340,000 a year, business investments would fall and productivity would decrease.
Wexler claims that his plan will get rid of Social Security?s looming deficit, but that is not true either, says IBD because it will delay the insolvency for a few years and fix nothing.
Source: Editorial, "Wexler's Folly," Investor's Business Daily, May 20, 2005.
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