“The best way to reform Social Security is to eliminate the payroll tax,” argues Dean Clancy.
“Social Security is going bankrupt, but official Washington can’t agree on how to fix it. Payroll tax receipts are insufficient to pay promised benefits… The most practical, and in my view, the best way to restore system balance would be to simply supplement the payroll tax from other revenue sources, and in particular from the general fund (i.e., income taxes). That would make the program solvent forever. Presto! No more bankruptcy threat. Which leads to a further idea: Why not supplant the payroll tax altogether, and as soon as possible?”
“The payroll tax is the biggest tax most Americans pay, and regressive. It falls hardest on low-wage workers. Eliminating it would provide meaningful relief to every American wage-earner, with the greatest relief going to those who need the the help the most. Abolishing it would be economically beneficial and politically popular. To avoid increasing the deficit, we could raise or impose other taxes that are less regressive – although, to be honest, I’m not sure we really need to. If anything, America’s less-than-stellar economy could stand a tax cut right now, and what better kind of tax cut than one that reduces burdens on job creation?”