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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: bentway who wrote (434651)	11/12/2008 4:12:49 PM
From: TimF	Respond to of 1573902

I don't really understand the reasoning behind the exemption. Do you? The reasoning behind it is the idea that Social Security is "social insurance", and since payouts don't increase past a certain point, premiums also don't increase past a certain point. Of course if you don't like the whole "insurance" schema for viewing Social Security, and just consider it as government spending like any other spending, than this reason won't be very convincing, but that is how the program was sold. The payroll taxes are regressive, and the income tax is very "progressive". Just having one flat or mildly "progressive" tax (perhaps flat but with a large personal deduction, making the effect somewhat like a "progressive" tax might make sense. Or if you want to keep two taxes, you could make each one more neutral. Remove the cap, but then have a big cut in the income tax, reducing the rates on people that would be effected by the large tax increase that removing the SS tax would entail, in such a way as to make the whole combined action revenue neutral.