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Politics : Bush Administration's Media Manipulation--MediaGate? -- Ignore unavailable to you. Want to Upgrade?

To: American Spirit who wrote (3053)	5/20/2005 9:24:18 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 9838

Wexler's Folly Thursday May 19, 7:00 pm ET Ibd Retirement: Democratic foes of Social Security reform have had searing criticisms of any plans calling for private savings accounts. They've been curiously silent about what they would do instead. Now we know why. That giant sucking sound you hear is the Democrats' idea vacuum suddenly being filled by the only concrete plan for Social Security reform to come from the party of FDR. Here it is: Tax the rich. Yes, that's what passes as Social Security reform in the Democratic Party these days. We'll give Rep. Robert Wexler this: His idea is diabolically simple. The Florida Democrat would raise taxes on all those who earn more than $90,000 a year by 6% -- with the income earner paying 3% and his employer paying the other 3%. That, he says, would plug the gap between expected spending and revenue, requiring no sacrifice from anyone other than the wealthy. See? Simple. Just raise taxes. It's a brilliant idea, suffering only one minor defect: It won't work. Why? Wexler's idea would create an economic crunch -- at a time when we can least afford it. It would do so by taking money from people most likely to start or own small businesses, and giving it to people who are likely to do neither. That means removing capital, the seed money for growth, from the working economy and handing it to retirees to spend. If this idea sounds familiar, it should be. It's been tried before, on a larger scale, in Europe. There, the jobless rate is over 8%, growth in a good year red-lines at 2% or so, inflation always threatens and productivity severely lags the U.S. Workers there are taxed to the hilt to pay benefits to retirees and those who'd rather not work. That's Wexler-nomics in action. What about Wexler's claim that his plan would get rid of Social Security's looming deficits? The Heritage Foundation ran the numbers on a much more ambitious idea than Wexler's -- the removal of the earnings cap on workers' earnings over $90,000. It found even that draconian step only delays Social Security's insolvency a "few years." So Wexler's plan would fix nothing -- just like the 23 other Social Security tax hikes we've had since 1935. Apart from not doing what it promises, the plan would cause enormous economic damage. It would cost the U.S. $33 billion a year in lost GDP in the first 10 years, Heritage estimates, and slash jobs by 340,000 a year. Business investment would fall. So would productivity -- the motor that powers gains in our standard of living. Even the class warfare arguments on which Wexler's plan is based fall apart under close scrutiny. The new tax wouldn't hit the idle rich or Wall Street fat cats. No, the Democrats' new tax would hit 9.8 million Americans who work an average of 49 hours a week. It would hit 3 million small-business owners -- the kind that create most of the jobs in our economy. It would also hit 3 million people over 50, just as they prepare themselves for retirement. Welcome to reform, Democrat-style. Maybe they could just market Wexler's idea as a "success tax." That's what it is, after all. Social Security's impending shortfall is a very serious problem -- and very real. It demands serious thought. As Wexler's half-baked proposal shows, Democrats just don't seem up to the task.