Last year, Gray Panthers spoke out in opposition to the “payroll tax holiday”, which jeopardizes the future solvency of the Social Security Trust Fund by diverting payroll contributions away from the program. And just as we predicted, since the economy still remains in bad shape, the government is being pressured to compromise again on extending and expanding this regressive and unjust tax scheme. As Congress continues to engage in political grandstanding, we are again speaking out. While we understand that in our struggling economy, tax relief for working and middle class Americans is needed, we feel that there are much better ways to stimulate the economy than continuing to undermine Social Security.
Yesterday, we sent the following letter to President Obama, Senate Majority Leader Harry Reid, and Speaker of the House John Boehner to share our position and recommendations:
Posted on Dreamwidth
Dear President Obama:
Gray Panthers, an intergenerational peace and social justice organization with members of all ages, has a long history of working for progressive social change. We urge you to consider a wiser alternative than trying to stimulate the economy by pressuring for renewal of the perverse payroll tax “holiday”. This quick fix tax relief scheme threatens to undermine the solvency of the Social Security Trust Fund. Ultimately, it will betray the economic well being of families it was intended to help.
It is with great sadness and not a little anger that we sense that Congress is gambling with the security of the Social Security Trust Fund to score political points during an election year. It is absolutely critical that the income for the Trust Fund be sustained by assuring that every single penny of funds diverted from the Trust Fund continue to be replaced. The current payroll taxes holiday is regressive. When 2% less is collected, persons with wages of $106,800 or more get a tax reduction of $2,136 dollars. Do wealthy CEO’s need this rebate? Will they promptly spend it and stimulate the economy? We think not.
Our sense of betrayal can felt in a more profound way. For the last 76 years, it has been a sacred legal obligation of workers and their employers to make their future more secure by setting aside payroll contributions into the Social Security Trust Fund. These Trust Funds have not only assured a base income for retirees, but have provided insurance for families against adversities of death and disability. During the last year, payroll contributions have been vilified as a tax burden from which we must be given a “holiday”. Contributing to the Trust Fund is not an unfair or an unjust tax. It is the price we must pay, under law, to assure that workers have a safety net of protection from life’s adversities.
A more fair, less expensive way to stimulate the economy without undermining the solvency of the Trust Fund would be for Congress to reinstate the “Making Work Pay Tax Credit” which was allowed to expire in December 2010. See article with this same recommendation in theDecember 5, 2011 issue of Forbes. This plan, initiated by President Obama, gave a $800 tax credit for married taxpayers filing joint returns. The credit was phased out for families whose earnings exceeded $75,000 for individuals and $150,000 for couples. These families will more likely spend a tax credit than those with higher incomes.
Finally, we urge Congress to take a bold step toward making the Social Security Trust Fund solvent for years to come. Lift the cap on income subject to Social Security payroll taxes. We agree that the wealthy have an obligation to help sustain the Social Security Trust Fund. Lifting the cap is a more permanent solution to our nation’s economic security than paying for temporary tax “holiday”.Sincerely,Judy Lear, Chair