Stop Me Before I Vote Again

Braying jackass of the week award -- in a rich week I must add -- to house majority leader Steny Hoyer, for lumping "reform" of the Social Security retirement system with health insurance.

Here's Chris Bowers on the topic, in paraphrase: "Hey, why not? Let's open the tax books here. Maybe we oughta pop the tax cap on SSI!"

Why is raising payroll taxes the hee-haw answer to everything?

At least this raise is on the better-off jobsters, the merit and hustle crowd. But what if, once the cougar's out of the bag, our beloved corporate-congo morph magic steps in, and on our way to the thousand years of solvency we get something more like this --

"Administration officials said that if Congress were to act immediately, the impending gap could be filled three ways: by raising workers' Social Security payroll taxes by 2 percentage points, from 12.4 percent to 14.4 percent; by reducing benefits by 13 percent; or a combination of the two approaches. The officials briefed reporters on the condition of anonymity on the technical aspects of the trustees' findings."

Here's EPI elf John Irons. Recently he was reminding our federal senate that there is at least one cap Uncle oughta blow off, not put on -- and that one is now on our two-sided payroll tax. Irons wants to get rid of the cap on earnings taxable for Social Security.

I agree, of course -- though I hasten to add, in Paine's world we'd now be on payroll tax holiday till further notice.

But even in Paine's world, we'd enjoy scheduling a nasty 6% tax increase on all "upper earners" payroll, for the dark day when extraction recommences -- errr umh -- down the road somewhere, when we're flyin' through the endless main drag of hyperemployment city.

Some nice Irons tidbits:

"Due to growing income inequality, the share of earnings above the cap has risen from 10 percent in 1982 to over 16 percent in 2006. This is because incomes have grown strongly at the top while middle incomes have stagnated."

"Including the employee and employer shares of Social Security and Medicare taxes, earners in the middle fifth of the income distribution pay an average effective payroll tax of about 11 percent.

In contrast, the top 1 percent of earners pay just 1.5 percent on average."

Paine's world's Solomon-like answer -- hell no!

Note: Yves Smith has called the financial services pay arrangement of “heads I win, tails you lose” looting, and has also argued that our form of capitalism is evolving into Mussolini style corpocracy, meaning fascism. But the label most often pinned on the Obama adminstration is socialism.

Socialists, of course, would argue that socialized gain and privatized loss is not socialism, which tries to “distribute income according to need as well as performance”. Indeed, socialists might call it fascism.

But I don’t put much stock in what socialists might label a system, any more than what fascists or corporate looters would label a system. Whatever you call it, if you have corrupt people running the system, you will have a corrupt system.

Why speculate on what socialists might call it? I think I need to start an "Ask A Socialist" service to handle these occasions. Anyway. It's called actually existing capitalism, it's working just the way it's supposed to, and that is the problem.