Just as predicted, the “budget hawks,” an apparently endangered species for the previous four years, have come back in great numbers now that President Joe Biden (D) has been president long enough to propose several bold spending plans and get one of them signed into law.
It’s not just to Congress that the budget hawks have come back to, there are also quite a few of them in the media. Last week, Karl Polzer wrote for the Washington Examiner an article titled “Biden’s spending spree could destabilize Social Security.” What!? How!?
It seems the budget hawks have given up on eliminating “entitlement programs” like Social Security, and have decided to instead use Social Security as a cudgel to attack President Biden’s spending plans.
I read the article on MSN, I didn’t read it on the Washington Examiner website and I don’t want to give them any direct links.
President Joe Biden’s plan to inject $4 trillion of social and capital infrastructure spending [link removed] into a $21 trillion economy could help many people take care of their families. But there are also major economic and political downsides. These risks could be reduced, and the proposal’s value increased, by putting Social Security on the table and targeting new social spending to people most in need.
If I’m understanding this correctly, President Biden hasn’t actually proposed using Social Security funds for his plans, either during his candidacy or so far in his presidency, or ever, and Polzer isn’t saying that. But Polzer might not correct you if you draw that conclusion.
Closely related is the government’s capacity to raise revenue [link removed]. The president says he’s only after the very wealthy to pay for his plan and won’t raise taxes on families making under $400,000 a year. Senate Minority Leader Mitch McConnell doesn’t want any new taxes at all. Just how much tax revenue could be extracted from the wealthy [link removed], now and in the future? If we tap out the rich now, who will bear the burden of spending down the road?
The rich can be tapped out? How do you tap them out? By taxing them at 100%? You don’t have to be an economist to know that’s never going to happen.
Jeff Bezos currently pays less than 10% in taxes. Tax him at 50% and he could probably still afford to build his own personal navy, complete with officers, seamen and aircraft carriers.
Articles on MSN often have a button that says “continue reading.” I suppose that’s the only way MSN can know whether people read much beyond the headline. To be fair, the bit that clarifies that Social Security is in fact not on the table yet appears “above the fold,” so to speak.
But “below the fold,” I find some reasonable thoughts that I don’t entirely agree with, but which suggest Polzer might be a middle class guy amenable to good faith debate, not a rich guy with a mental pathology that makes him kick and scream about the slightest tax increase.
I have made the case [link removed] that the wealthy and upper-echelon professionals could cover the cost of bringing Social Security into balance by eliminating the FICA tax cap on wages and raising the capital gains tax. Higher estate taxes could help as well.
Low-wage workers, who now make up almost half the workforce, don’t have money to spare. They have shorter average life spans, leaving them less likely to collect old-age benefits than higher-income workers. Another reason to target the affluent is that the growth of U.S. labor income, the base of Social Security’s financing, has lagged behind that of capital income. Poor people don’t have much capital income.
That sounds reasonable. I’m not endorsing this, but I’m not dismissing it either. But... does Polzer ever wonder why is it “that the growth of labor income” has not kept up with the growth “of capital income”? I don’t know if Polzer would be willing discuss that in depth.
More importantly, however, the public needs to understand that the excessively wealthy are parasites in our society suffering from various mental conditions, not heroic job creators.
As long as the current public perception of the excessively wealthy remains, it will be almost impossible to make those parasites pay their fair share. The idea that they could be taxed out of existence is a pipe dream.