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Stipulated: Payroll Taxes are "Normal" Taxes... Now what?
Ok, so let's assume for a minute I accept that all types of taxes should be treated equally when calculating the tax burden and progressive/regressive distribution. Now what? Liberals use the argument (by all means, correct me if I get this wrong) that since the tax code is not very progressive, the rich aren't paying their fair share and should be made to pay more. The only clear plan I've seen from most liberals - and most importantly, from Obama - is to let the Bush tax cuts expire for high wage earners while renewing them for lower wage earners. This perplexes me:
AFAIK, the federal income tax is the only piece of our entire tax code that has a heavily progressive structure. The primary culprit in making the code flat to regressive, particularly above $106K is the flat nature of our payroll tax and in particular the $106k cutoff for Social Security. So it seems illogical to me to not attack the problem directly. If the tax burden becomes regressive at high incomes and the primary culprit is the Social Security tax, shouldn't logic dictate that the fix should be to remove the $106k cap and even apply a progressive scale to the SS tax? Why are Democrats not [loudly, anyway] advocating this more direct approach to fixing the problem?
Ok, so let's assume for a minute I accept that all types of taxes should be treated equally when calculating the tax burden and progressive/regressive distribution. Now what? Liberals use the argument (by all means, correct me if I get this wrong) that since the tax code is not very progressive, the rich aren't paying their fair share and should be made to pay more. The only clear plan I've seen from most liberals - and most importantly, from Obama - is to let the Bush tax cuts expire for high wage earners while renewing them for lower wage earners. This perplexes me:
AFAIK, the federal income tax is the only piece of our entire tax code that has a heavily progressive structure. The primary culprit in making the code flat to regressive, particularly above $106K is the flat nature of our payroll tax and in particular the $106k cutoff for Social Security. So it seems illogical to me to not attack the problem directly. If the tax burden becomes regressive at high incomes and the primary culprit is the Social Security tax, shouldn't logic dictate that the fix should be to remove the $106k cap and even apply a progressive scale to the SS tax? Why are Democrats not [loudly, anyway] advocating this more direct approach to fixing the problem?