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Tom Giovanetti responds to me. He says he is willing to be labeled “unconstructive,” but that’s the least of his problems.

Social Security taxes apply to the first $94,200 of wages. My colleagues editorialized that Republicans should be open to a Social Security deal that raises that “cap” if the revenues thus raised were used to cut the payroll tax rate or to fund tax credits to help low-wage workers accumulate capital. Concentrate on that first scenario, in which a lower payroll tax rate is applied to more wages. It seems to be Giovanetti’s position that this state of affairs would represent a “tax increase,” and acceptance of it is therefore heresy.

Maybe making payroll taxes more progressive in this fashion is a bad idea for other reasons, but the idea that it’s a “tax increase” is absurd. If it’s a tax increase, then so is, for example, any effort to implement a flat tax. After all, you’d be moving to a lower tax rate by getting rid of some deductions–and you’d have to consider the elimination of deductions, absurdly, as a tax increase.

Giovanetti may consider the second scenario more objectionable than the first, based on the theory–asserted by his colleague Larry Hunter–that tax credits represent an “entitlement” and are therefore bad. But as stated, his accusations make no sense.



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