Talk Of The Payroll Tax

As with virtually any forum this election season, last night's Democratic Presidential debate sponsored by AARP, hosted by Judy Woodruff of PBS, and held in Davenport, Iowa, produced few sparks but significant boredom (except to political junkies, but who else would be watching it?). Five candidates participated, with Gravel and Kucinich not invited and Obama having announced fairly recently that he would avoid any forum not sanctioned by the national party.


There was, however, a significant exchange about the FICA, the payroll tax which finances Social Security and Medicare. As Bloomberg News reports it, Mr. Edwards "said that the income cap is currently about $97,000, and advocated extending it for individuals earning more than $200,000 a year. ``These millionaires on Wall Street ought to be paying their Social Security taxes,'' he said." However, ever the advocate of the plutocracy, Mrs. Clinton "said she opposed this increase of the payroll tax and is focused instead on the budget deficit. ``We have a lot of work to do in Washington to clean up the fiscal mess we're going to inherit from President Bush,'' she said.

As described objectively here, the FICA is a classic example of a regressive tax. Worse than a "flat tax," which, presumably, would tax all income at the same rate, we finance these great, anti-poverty, pro- middle class programs with a rate up to a certain (ever-growing) level-at which point the Social Security aspect (the bulk of the fee) of the tax goes away. Thus, Social Security is not financed with any income above (currently) $97,000- whether possessed by M. Gibson, Trump, Gates, Bellichick, or Couric.

Addressing this is not "class warfare" (more often practiced by the Repub Party, anyway) but rather intrinsic to saving the program. The Repub Party rants about depletion of the Social Security trust fund, and the mainstream media take it as an article of faith that the money to support America's elderly is running out. That is alarmist, but continued solvency of the fund can only be enhanced by a)not raiding it in order to supplement the federal budget; and b)extending applicablility of the tax to all income, so that the privileged will pay their fair share and lifting much of the burden off the middle class. It is disappointing that Senator Clinton, who undoubtedly understands this need, will not acknowledge it and disturbing that if elected, might continue to skew the tax system for the scions of Wall Street and the glitterati of Hollywood, and against Main Street.