THE DEMOCRAT VISION: REFORM BASED ON HIGHER TAXES
June 8, 2005
Last year, President Bush put Social Security reform on the national agenda. His proposal to save Social Security by giving younger Americans the option to choose personal savings accounts has been met, to date, by ridicule and silence among the loyal opposition in Congress, says Rep. Mike Pence (R-Ind.).
That silence ended last month when Rep. Robert Wexler (D-Fla.) introduced legislation that he described as "Social Security Forever." He proposes to cure Social Security with that antidote that Democrats most often run to: Higher taxes.
Make no mistake, increasing taxes -- either by raising the Social Security tax rate or raising the amount of income subject to Social Security taxes -- would amount to the largest marginal tax rate increase in a generation and result in an enormous burden on working families, small businesses and farms, says Pence.
According to the Heritage Foundation:
- Raising the payroll tax cap would directly raise taxes on 9.8 million American workers, including 3 million small-business owners.
- This would also reduce the gross domestic product (GDP) by $33 billion per year, on average, over its first 10 years and reduce total employment by an average of 340,000 jobs per year over that period.
For these reasons, House conservatives vigorously oppose proposals to ?reform? Social Security by raising taxes. The cure for what ails Social Security is new ideas, not higher taxes, says Pence.
Source: Mike Pence, "Don't raise taxes: Personal accounts, fiscal discipline can solve the expected shortfall," USA Today, June 8, 2005.
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