Barack Obama (excerpt) on Tuesday, April 19, 2011:
Now, politically, it’s hard to do. Politically, it’s hard to do. For example — I’ll just give you one example of a change that would make a difference in Social Security. Right now you only pay a Social Security tax up to a certain point of your income. So a little bit over $100,000, your Social Security — you don’t pay Social Security tax.
Now, how many people are making less than $100,000 a year? Don’t be bashful. (Laughter.) The point is, for the vast majority of Americans, every dime you earn, you’re paying some in Social Security. But for Warren Buffett, he stops paying at a little bit over $100,000 and then the next $50 billion he’s not paying a dime in Social Security taxes.
So if we just made a little bit of an adjustment in terms of the cap on Social Security, that would do a significant amount to stabilize the system. And that’s just an example of the kinds of changes that we can make. (Applause.)
That is, to the best of my knowledge, the last time a major player in the current debate over the debt ceiling (Sadly I am not charitable enough to call Bernie Sanders and some bloggers "major players") mentioned the simple, unspoken change that would ensure the solvency of Social Security (which isn't currently at risk, and isn't projected to be for a few decades but ohmygodit'sanemergency and we have to cut it now because the president is a negro this is such a major crisis). The Cato Institute and the ragingly liberal Citizens for Tax Justice agree: lifting the Social Security payroll tax cap raises over $1.2 trillion over 10 years and essentially makes the program solvent in perpetuity. I hate oversimplifications, but this really isn't complex. Lift the cap and the "problem" disappears. Immediately.
The idea hasn't since come out of Obama's mouth, of course. He mentioned it as a hypothetical to make it easier to backpedal (see also: "I'd like to have a public option", "I fully support equal marriage rights for same-sex couples”, “Torture is wrong, and those who did it must be held accountable", etc.) and has made no effort to introduce the idea into the current debate. I mean, why mention something that would only affect about 6% of taxpayers – that's right, if you make $106,000 or more you're in the top five percent of wage earners in the country so maybe shut the fuck up about your taxes recognize that we're all making sacrifices here – and would actually accomplish the goal that everyone in Congress claims to care about?
Currently we pay 6.2% on the first $106,800 of our taxable income and not a red cent after that. But wait! In 2011 we're paying 4.2% because Obama decided to sign off on a bill with one of those I'm-going-to-kill-myself-if-you-don't-stop-with-these-titles titles, the "Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010" in December of 2010. This legislation cuts the payroll tax to 4.2% for 2011 only (*WINK*), although of course it'll never go back up again – because that would be "raising taxes"! (see: Bush tax cut expiration). But I'm sure this is helping to solve the problem. The problem of Americans paying too much into Social Security.
If the president had balls Americans weren't such reactionary dolts our political class was willing to show some initiative, with minimal effort we could probably come up with a pretty appealing way to package a "tax hike" in the form of repealing the cap. Let's say that for every $100,000 in income an individual makes over the current $106,800 cap, he or she is entitled to a 10% larger benefit at retirement age. That would eat away at some of the benefits of lifting the cap, but undoubtedly it would A) make clear that the wealthy would receive something extra in exchange for their larger contributions in absolute dollars, and B) still provide a huge net benefit to the program. Hell, with his current leverage a president could probably make this kind of deal look like the Sale of the Century – lifting the cap in exchange for some retirement age increases and a scaled benefit plan for high-earners. Sure, Eric Cantor wouldn't go for it, but who cares? With some additional candy corn perks for *insert buzzword here* ("small business owners," farmers, the self-employed, etc.) Congress would probably need Tommy John surgery from all the high-fives they'd be giving each other after passing the bill.
But we can't even talk about it, because we can't say "raise taxes." Normal people bandy about the idea all the time, but in the Beltway it remains the idea whose name shall not be spoken. Social Security has long been considered the third rail of American politics – touch it and you're dead, right? – and far too little attention has been paid to the fact that our political class would rather stand on the third rail than even mention the idea of raising taxes. By a small amount. On 5% of the population. With six-plus figure incomes.
So which one is the third rail?
Doctor Couth says:
Thanks for mentioning the bloodbath that will ensue from trying to end the payroll tax holiday. It will make the Bear Mountain Picnic Massacre look like a picnic.
eau says:
Nice work, ed. Killer last line.
Ben says:
This is the kind of writing that is pummeling Fox Business Channel in the ratings. I can't believe I'd never heard someone refer to raising taxes as the real third rail before.
I do have to quibble with your Tommy John example, though. Rich people aren't going to give a shit if their SS benefits are raised. The benefit raise wouldn't be enough to off-set the increase in taxes (else there wouldn't be a benefit to the SS program), and even if it was, that would mean shifting the money from the present day to the day when they would start being paid benefits. 1. I think the rich are smart enough to figure out that just giving money to the government to hold onto for awhile until they get it back in benefits means they lose at a minimum the interest that money could have generated in the interim. 2. People in general (and probably esp. the rich) hate delaying consumption; a bunch of behavioral economics studies have shown this in as many ways as you please.
So even if Obama's balls dropped and he offered that deal, it would still face the political problem of having the rich, with all their hands hovering over the levers of power, dislike it.
mngstrfy says:
The Four Ignoble Truths:
* Touch the military/espionage/security-industrial complex and you're dead.
* Touch Social Security and you're dead.
* Raise taxes and you're dead.
* Touch Medicare and you're dead.
Warhammer 40K has nothing on the infinite, deadening transgenerational political inertia of the last 30 years on those counts.
anotherbozo says:
Enter the postmodern meta-post, with crossed-out entries, under-your-breath asides, etc. Brilliant.
Your post Friday had brought to mind an old favorite comedian (comedienne?), Wendy Liebman, who used to pronounce the punchline under he breath, usually contradicting her "public" observation. Really funny.
But not reflective of our political doublespeak, as here. Sigh.
Hazy Davy says:
Brilliant and simple.
Like you and me. This article is like you and me. Well, it's like you. And it's like me.
deep cap says:
So apparently the 27 percenters are now 26%. (Quinnepiac says 25%.)
acer says:
@deep cap:
No one really likes "taxes." Everyone wants to "cut the fat." But that poll didn't seem to explain what "spending" was on the block or where most of those tax increases would be happening. If things keep going the way they are, I think you're going to see growing hostility to the $100,000+ club, who spent the last 30 years running us into a ditch.
Bill Murray says:
Since the primary purpose of the talk concerning SS is not to save the system nor end the phantom long term problems, but to destroy the current system and use the extra money to have more upper income tax cuts, and if there is any SS left for this to be controlled by Wall Street, sensible cholices like the one Ed proposes will never be enacted. Well eventually they may once the MotU destroy things sufficiently so that those they control aren't in power anymore but that is probably a decade away.
c u n d gulag says:
If there are still people on this planet a couple of centuries from now, they will be laughing at how a country as wealthy as America was basically so stupid that it committed suicide just to save the rich a few bucks they didn't really need.
If it's any consolation to anybody out there, we won't be the first country to do this:
http://www.washingtonmonthly.com/magazine/julyaugust_2011/editors_note/playing_chicken_with_history030506.php
Oh, yeah, sorry about that, I forgot – we can no longer call them "rich.'
They are now known as "Job Providers."
That's all I heard on TV all weekend when the Rethuglicans and Teadiots talked.
From Friday:
So this "Job Provider" guy walks into a bar and bumps into a 'Job Needy" guy…
What's the punchline?
There is none.
But the reality may soon be that the 'job needy' guy takes a
bar knife, and hacks off the 'job providers' privates, and stuffs them in his mouth. What's that called? A "Columbian necktie?"
Maybe we can change that too, to "A Corporate Necktie."
anotherbozo says:
@ c u n d gulag: for a bit more historical perspective, see
http://www.wildriverreview.com/Column/Thinking-Otherwise/Political-Meditation-4th-of-July/William-Irwin-Thompson
one of my fave cultural gurus, an eternal optimist who's been challenged lately.
c u n d gulag says:
anotherbozo,
Thanks for turning me onto him – that was a great piece of writing! And spot on, too!
bb in GA says:
I'm so busted…
just a little less melanin in the POTUS and I'm for:
Obamacare
Card Check
Stimulus II
etc.
etc.
Now, if W were only a little darker, I'm for:
Most of the Patriot Act
Medicare Part D
TARP
Stimulus I
SS reform
//bb
acer says:
@bb:
You can be against all of those things, at least in theory, and nevertheless concur that, as long as we have mandatory taxation to keep society together, the uber-rich might consider chipping in something closer to their fair share. (Perhaps by giving up those "temporary" freebies they've gotten over the years.)
Or that, as long as we're stuck with a federal government (I haven't seen anyone actually "going Galt" recently), shoring up basic social safety guarantees for those unable to work, particularly seniors, should get more of its attention than protecting the hordes of billionaires. That lowercase-s social security carries broader collective benefits than bleeding the 98% for the good of the 2%.
Here's what keeps the Tea Party racism meme alive: it's odd to see all-American working stiffs, most of them not well acquainted with strict libertarian economic theory, many of whom have become significantly more downwardly mobile in the last 30 years, taking to the streets in support of insurance companies and tax breaks on corporate jets. Unless, of course, they're being led around by their prejudices.
The TP would be a bit more convincing had it existed prior to January 2009, and if it didn't consist overwhelmingly of erstwhile GWB fanatics. Don't you think?
bb in GA says:
@acer
I think the tax man cometh for everybody before this is all over and for the reasons you pointed out.
I honestly think the TP formation was a KAIROS moment just like the Montgomery bus boycott and much of the modern day Civil Rights struggle grew out of Ms Parks refusal to move to the back of the bus.
IMO, Rick Santelli's impassioned speech (19 Feb 09) was that moment on the TP issues. Ds and Libs are saying it is the POTUS Race issue.
I think the Ds and the Left always want to make this personal. It is on page 12 of that dog eared play book.
For a massive movement, I find the number of documented instances of racial animosity quite small compared to Leftist pressure groups.
And for the Lefties it is frequently the leadership and "platform" people who make the acrimonious statements.
//bb
Arslan says:
Wait for Glenn Beck to point out that Social Security is commonly known as SS, JUST LIKE THE SS OF NAZI GERMANY!!! PANIC!!!
Eric Titus says:
Lowering social security taxes made sense as a "stimulatory" tax cut, since people wouldn't have to wait until the next April to see the benefits. But the problem is that conservative alarmists then point to those new numbers as showing some kind of imbalance in social security funding. The truth is that there is no real problem with social security, and trying to find "solutions" just feeds the fire.
Personally, I'd much rather see the Bush cuts repealed than raise the social security tax. The rationale behind the ss system in many people's minds is that it operates like a very secure retirement account. It is a regressive tax, but that is how it was conceived.
acer says:
@bb:
It's pretty weak beer to question the motives of anyone who disagrees with you ideologically. I think "Anyone Who Disagrees With Obama is a Racist" is mostly a right-wing strawman, and I wish liberals wouldn't encourage it. If they want to use Obama as their official Bad Guy, it's not much different from the anti-war movement's treatment of Bush (and no more dumb in its reductionism), as long as it doesn't involve Birtherism or any such essentialist crap. I'm sure there are people in the Tea Party who really aren't concerned with the President's race.
So why is the Tea Party so closely aligned with the Seal The Borders crowd? Alliance of convenience? Tight control of immigration is actually against the hard libertarian line, which sees no harm in foreign "competition." So why do the Tea Party people keep inviting Tom Tancredo and Shurf Joe Arpaio to speak at their rallies? It's an unfortunate overlap, and it does, and should, saddle the movement with racial baggage.
huw says:
Maybe I shld get my miltary pics i took with my
Canon EOS Rebel T3i and show you some awesome thing. Make you think differntly.
joel hanes says:
I honestly think the TP formation was a KAIROS moment just like the Montgomery bus boycott and much of the modern day Civil Rights struggle grew out of Ms Parks refusal to move to the back of the bus.
I'm sure you're correct, and all that Koch money and deliberate promotion on Fox had no effect.
nobody says:
Not related to this post, but I figured you'd be interested in this, Ed:
http://behind-the-enemy-lines.blogspot.com/2011/07/why-i-will-never-pursue-cheating-again.html
(in fact, I'd be surprised if someone hasn't already sent this your way?)
Monkey Business says:
Honestly, I wonder how close we really are in this country to all out class warfare. There is a visceral anger on both sides of the debate that, right now, is being directed toward eachother. What happens when it becomes painfully obvious that the richest 10% are manipulating the other 90% for their own outrageous benefit? It's important to remember that the top 10% are incapable of producing anything on their own. They're managers and consumers, and rely on the other 90% to require management and produce.
@bb in GA: calling Santelli's performance a kairos moment is ridiculous. First off, comparing it to Rosa Parks' refusal to give up her seat and the Montgomery Bus Boycotts is downright offensive. A bunch of old white people bitching about the half-black president doesn't really compare to the Civil Rights Movement. Second off, we have yet to see how effective the Tea Party is against a sitting President, and all the resources he commands. You make it sound like Democrats are the only ones that want to "personalize" the conflict between Right and Left, when really the Right does a better job of it than the left does, mainly because the Right consumes a greater quantity of government services like Social Security and Medicare. Calling the Tea Party "massive" is also ridiculous. At best, it represents 12% of the voting population, which notches it barely above a fringe group. The only reason that it's able to exert such pressure on the GOP is that that 12% is almost entirely Republican, constituting the majority of their base.
bb in GA says:
@acer
We might just start circling here, but I'l make one run at it.
Most of the 'Seal the Borders' people (of whom I'm one) that I know anything about are anti-ILLEGAL immigration.
I don't care if you are blue eyed blonde from Copenhagen or a brown eyed, raven hair from Ciudad Victoria – if you jumped the fence or overstayed your VISA or stowed away on a damn banana boat – You don't belong here.
One of my DILs is a Black Latina from the D.R. who came here legally. I'm all for it, Welcome to the USA.
Thank you Jesus, my son is a happy man.
//bb
bb in GA says:
@monkey business
Sorry you were offended. I called it the way I saw it. Historical comparisons are valid, but your mileage may vary. You think it's dumb and/or offensive. I'm assuming no Christmas card this year…
I agree w/ most of your first graph. I think you exemplified it wonderfully when you went racial on me in graph 2. I really think you're selling some of that weak beer acer was mentioning above.
T party massive? How big was the anti-war movement during W's admins?
If 12 people (mostly my age) showed up somewhere where Rumsfeld was speaking or some such – everybody from Shep to Katie had the video and the signs.
How about relative to the G10 protests? A few hundred people trashing a downtown area? Same deal.
The Right had 100s of thousands show up in DC at Beck's thing (Whitestock, I think y'all called it) and they left it cleaner than when they got there and no arrests (of the Right Wing a$$holes)
I don't know if their hammer is big enough to whip our President. I'm on record here that I think they are massive enough to bring down the Rs when the establishment types cave on the issues that put the TP candidates in last Nov.
//bb
Tim says:
"I honestly think the TP formation was a KAIROS moment just like the Montgomery bus boycott and much of the modern day Civil Rights struggle grew out of Ms Parks refusal to move to the back of the bus."
This is retarded. Sorry, but refusing to participate in a caste system (where uniformed officers on top of average people kill and main african americans for breaking the customs and "lusting after" white women) is not equivalent to some bitchy people who complain about taxes and keeping people from being thrown out onto the street.
Also, the civil rights movement WAS NOT defined, started, or revolving around that moment. Or any of the other major moments. It was a diverse movement that had its origins TWENTY YEARS prior.
Don't use cultural conceptions to argue. They're almost always oversimplified, out of context, or flat out wrong.
"The Right had 100s of thousands show up in DC at Beck's thing"
87,000 was the number official sources gave. Sources topping even 100,000 are conservatives basically boosting the event.
"I'm on record here that I think they are massive enough to bring down the Rs when the establishment types cave on the issues that put the TP candidates in last Nov."
They are fucked either way. If they go full steam into austerity they cause the recession to deepen, perhaps even hit a depression. They'd be thrown out of office for that.
They don't race blindly towards austerity and they get thrown out of office. This is why you don't build political parties on horrendously unsound economic policies.
Anonymous says:
Rick Santelli's impassioned speech (19 Feb 09)
Oh, right. That grassroots tea party movement.
If 12 people (mostly my age) showed up somewhere where Rumsfeld was speaking or some such
Ben says:
BB
Please do not try to hype the tea party protests. There are plenty of polls that give figures for the percentage of people who agree with the aims of the TP, there's no reason to overhype individual events.
Beck's thing: 87,000 +/- 9,000. For comparison's sake, Jon Stewart / Steven Colbert's thing was 215,000. These are easily Googlable (love that word).
The protests against the Iraq War included the largest single protest in the history of humanity: http://en.wikipedia.org/wiki/Protests_against_the_Iraq_War
As for media coverage of sparsely-attended events: a liberal is not going to convince a conservative that sparse tp events got overhyped, and a conservative is not going to convince a liberal that "12 people showing up somewhere" is overhyped. Probably both are true to some extent (though the tp stuff, c'mon, that's captured the media in a way that G-whatever protests never did).
ifthethunderdontgetya says:
The Right had 100s of thousands show up in DC at Beck's thing (Whitestock, I think y'all called it) and they left it cleaner than when they got there and no arrests (of the Right Wing a$$holes)
Try 70,000 – 87,000, bb. You're living in an imaginary world created for you by right-wing media.
~
eau says:
@bb – "If 12 people (mostly my age) showed up somewhere where Rumsfeld was speaking or some such
Joe says:
we should do away with payroll taxes and pay for SS and Medicare out of general revenues.
eau says:
Dang. That was quite rant we lost there.
I'll keep it short. Much shorter than the original, lost comment.
Basically, what Ben said. But I'll add a genuinely shocked "The LEFT make it personal? Really?"
I guess that explains all the assassinated right wing politicians littering US history, huh? All those brave right wing political prisoners rotting in US jails for decades despite committing no crime?
Nunya says:
Wow, I qualify to be part of the top 5%. Kind of shocking.
That being said, I do feel undertaxed.. really. Granted, I am at the low end of the spectrum but ponying up for FICA for the over 108K portion is more than fair in my book.
Also, upping the top tier tax rates for me and the super-rich is the only way I see to fix anything in this country.
someofparts says:
Tricky part is how that 5% manage to keep out-voting the rest of us in the teeming U.S. masses.
BobC says:
@Nunya: same here… I'm also in top 5%, and would be willing to pay more taxes, if it was part of a concession deal that would truly make a dent in the problem. I directly benefit from government infrastructure. I like driving on paved roads and walking on sidewalks. I like consuming food and water that doesn't have poison in it. I like breathing clean air. I like that my kids are vaccinated and healthy, and growing taller than I am. I like living in a country where all children are taught how to read and write. And perhaps more controversially, I like the idea that the poor, the old, the sick, might have a little help in life thanks to the rest of us who are blessed with success. I think these attitudes are common to the lower-end "rich", as most of us grew up in the middle class, and thus were ingrained with a middle-class sense of fairness and values.
bb in GA says:
I think we are down to "Oh yeah, well your mother…etc."
I am not a professional crowd estimator, but I know what I saw (unless we have arrived at real time photoshopping)
It is hard for me to believe that Beck had less than 100K at his DC rally, but I have no way to prove it, I am to lazy/busy to run a density study of my own, and y'all have Google on your side.
Uncle
Have a nice day.
//bb
Dan says:
Here is a solution to the SS cap. Instead of "raising" the point at which you stop paying into SS, index that number to inflation. That is probably a bigger cause of the reduction in SS contributions.
Much like the problem with the AMT, inflation (which the FED thinks is good) causes the hard numbers in legislation, to drift from their intended levels. Change the hard numbers to indexed numbers and these problems will not keep coming up.
For example, if the $100k ceiling for SS contributions was set in 1990, then index to inflation and that number today would be ~$130K. Same with taxes. If you made $50k and that put you in the 20% tax bracket, why should your cost of living increases push you into a higher tax bracket?
Ed says:
Just curious – has anyone ever asked one of these SS cutters if our payroll taxes will be reduced along with benefits? Of course not, and no they won't. That means they would have to plan to use OUR contributions for something else.
No?
David Gilliland says:
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