Reply #3: The payroll tax is regressive, but I agree with no 1 [View All]

The benefits are in the nature of an insurance, and if you take into account who gets the benefits, the SS system is mildy progressive. Or so I have heard: I think it might be really hard to figure it out.

As insurance against the day you are unable to work, it should go to those who have supported themselves through work: therefore a tax on wages to provide a substitute for wages makes sense.

But that said, I am dead set against any hike in the SS paid by most wage earners. Lifting the cap is bad enough, but raising it for everyone else--or stealing it for Bush tax cuts--is a crime.

And that said, we also have to recognize that the payroll taxes, between SS, medicare, unemployment ins., are a discentive to employment and raise employment costs significantly. We can't put any more burden on wages or wage earners or employers.

For one suggestion on a tax hike, see Brooking Inst. Policy Brief Number 126.