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Senator Bernie Sanders Introduces Bill to Apply Payroll Tax to High Incomes

Posted: March 7, 2013 | Author: | Filed under: Barack Obama, Medicare, Social Security, The Media SUCKS, U.S. Economy, U.S. Politics | Tags: , , |31 Comments

Bernie-Sanders

I’m sure most of the corporate media will ignore this, but Senator Bernie Sanders today introduced a bill to “strengthen Social Security” by applying payroll taxes to all income–including from self-empoyment–to people earning more than $250,000 annually. So far I’ve only seen this reported by one national media outlet.

The Hill:

Sanders and other liberals are concerned Obama may strike a deficit-reduction deal with Republicans that would reduce Social Security benefits by adopting a less generous way of adjusting benefits for inflation.

Sanders on Thursday introduced legislation co-sponsored by Senate Majority Leader Harry Reid (D-Nev.) to raise payroll taxes on the wealthy to extend the solvency of Social Security.
Democratic Sens. Barbara Boxer (Calif.), Amy Klobuchar (Minn.), Sheldon Whitehouse (R.I.), Al Franken (Minn.) and Richard Blumenthal (Conn.) have co-sponsored the bill as well.

Representative Peter De Fazio is introducing a companion bill in the House.

“Social Security is facing an unprecedented attack from those who either want to privatize it completely or who want to make substantial cuts,” said Sanders at a press conference. “The argument being used to cut Social Security is that because we have a significant deficit problem and a $16.6 trillion national debt, we just can’t afford to maintain Social Security benefits.

“This argument is false. Social Security, because it is funded by the payroll tax, not the U.S. Treasury, has not contributed one nickel to our deficit,” he said.

Sanders estimates switching to a chained-CPI formula for determining benefits for Social Security would result in the average 65 year old living on about $15,000 a year receiving $650 less each year when they turn 75 and $1,000 less a year when they turn 85.

The bill is supported by (PDF) “The Strengthen Social Security Campaign, comprised of more than 320 organization throughout the country representing more than 50 million Americans, including the National Committee to Preserve Social Security and Medicare; AFL-CIO; United Steelworkers; Alliance for Retired Americans; Social Security Work; Campaign for Community Change; The Arc.”

The AARP announced yesterday that it is going to be running ads

If you haven’t read the op-ed by Thomas Edsall (The War on Entitlements) in today’s New York Times, I hope you will take the time to do so now. Thanks to RalphB for posting the link on the morning thread! Here’s the introduction:

The debate over reform of Social Security and Medicare is taking place in a vacuum, without adequate consideration of fundamental facts.

These facts include the following: Two-thirds of Americans who are over the age of 65 depend on an average annual Social Security benefit of $15,168.36 for at least half of their income.

Currently, earned income in excess of $113,700 is entirely exempt from the 6.2 percent payroll tax that funds Social Security benefits (employers pay a matching 6.2 percent). 5.2 percent of working Americans make more than $113,700 a year. Simply by eliminating the payroll tax earnings cap — and thus ending this regressive exemption for the top 5.2 percent of earners — would, according to the Congressional Budget Office, solve the financial crisis facing the Social Security system.

Gore vidal quote

So why don’t we talk about raising or eliminating the cap – a measure that has strong popular, though not elite, support?

I think we all know the answer to that question, don’t we?

31 Comments on “Senator Bernie Sanders Introduces Bill to Apply Payroll Tax to High Incomes”

  1. bostonboomer's avatar bostonboomer says:
    March 7, 2013 at 2:02 pm

    From Philly.com: Means testing? Why not just raise Social Security’s tax base?

  2. dakinikat's avatar dakinikat says:
    March 7, 2013 at 2:11 pm

    Obama looks to make deficit deal with GOP http://www.washingtonpost.com/politics/house-takes-first-step-to-avoid-government-shutdown/2013/03/06/f50c79da-8671-11e2-9d71-f0feafdd1394_story.html …

    • RalphB's avatar RalphB says:
      March 7, 2013 at 3:21 pm

      Fuck Obama if he does. If the people in the country get riled and play this right, he’ll have to do it by himself and not drag the Democratic Party over the cliff with him. That he won’t do.

      • bostonboomer's avatar bostonboomer says:
        March 7, 2013 at 3:37 pm

        Ralph,

        Have you seen this post by Jonathan Chait? He agrees with me that Republicans don’t want to vote for entitlement cuts.

        Republicans Have Won a Budget Battle, But Not the War

      • RalphB's avatar RalphB says:
        March 7, 2013 at 4:07 pm

        BB,

        I think they may vote for the cuts, but they will never be the party that brings them up. They have to escape blame because their old white base voters will throw them out otherwise. Obama has brought them up but the Democratic party isn’t supportive, for now. That’s the fight we have to make.

      • bostonboomer's avatar bostonboomer says:
        March 7, 2013 at 4:10 pm

        They will use any cuts against Dems in 2014, and I think they will do everything to avoid having to vote for SS cuts. They may want them, but only if they can blame Obama. To be honest, I often wonder if Obama is pushing them because he knows the Republicans won’t accept his offer–just like last year.

  3. dakinikat's avatar dakinikat says:
    March 7, 2013 at 2:12 pm

    I was thinking about writing about this too because I watched Alex Wagner today and saw her ask this question. She was completely pooh pooh’d by her panel.

    • bostonboomer's avatar bostonboomer says:
      March 7, 2013 at 2:16 pm

      I heard that too. I realized yesterday that we can no longer count on MSNBC on this issue. Ed Schultz was talking about it for awhile, but now it appears the prime time host either support the cuts or have been told not to talk about other options.

      I hope you do write about it, Dak!

      • ANonOMouse's avatar ANonOMouse says:
        March 7, 2013 at 2:26 pm

        Yep….MSNBC has been ticking me off regularly since they jumped on the “necessity of entitlement cut” bandwagon. I haven’t noticed it on the Ed Show, Rachel or O’Donnell, but Morning Joe is beating the drum loudly as is Chuck Todd and Chris Matthews.

      • RalphB's avatar RalphB says:
        March 7, 2013 at 3:23 pm

        MSNBC hosts are also highly paid. If your income depends on you not knowing something, it’s damned hard to admit you know it. Thus, spectacular bullshit everywhere.

      • bostonboomer's avatar bostonboomer says:
        March 7, 2013 at 3:38 pm

        Plus, they work for Comcast.

  4. bostonboomer's avatar bostonboomer says:
    March 7, 2013 at 2:17 pm

    The AARP has started running ads about how Chained CPI cuts will affect different groups. The first ads focus on women.

    The Social Security benefit cut known as Chained CPI remains a piece of the deficit puzzle for reasons that baffle conservatives, veterans, progressives, and almost everyone in between. The $85 billion in sequester cuts for 2013 have begun and many in Washington have still said they’re willing to cut the modest Social Security benefits we’ve earned by $127 billion over 10 years, even though Social Security by law remains separate from the budget and its deficit. Let’s give every woman and anyone who has or has ever had a mother, sister, daughter, grandmother, aunt or girlfriend a reason to despise this wretched proposal.

    This week AARP began running ads about the impact of what the Chained CPI Social Security benefit cuts would mean to women. Below is a copy of one of those ads. In the weeks ahead we’ll roll out new ads showing what the cuts would mean to other groups of people. I’ll also come back with even more reasons we need to kill this proposal. For anyone that sees this as a generational effort, Social Security also provides benefits for girls and boys who have lost a parent, and older Americans overwhelmingly want to see Social Security in existence for the generations that come long after them.

  5. Fredster's avatar Fredster says:
    March 7, 2013 at 2:21 pm

    I hope it gains some traction but I doubt it will. If it will wipe out any funding “issues” it ought to be seriously considered.

    • bostonboomer's avatar bostonboomer says:
      March 7, 2013 at 2:37 pm

      It will only gain traction if voters make their wishes known–very very loudly.

      • Fredster's avatar Fredster says:
        March 7, 2013 at 2:42 pm

        bb: every email petition on soc. sec. that I have received I have quickly signed onto. I hope folks will let their congress critters know about it. However, I’m still having to correct folks who state they got a tax increase back in January. “No you didn’t. The withholding “holiday” expired.” “Withholdings just went back to where they were before.”

      • bostonboomer's avatar bostonboomer says:
        March 7, 2013 at 2:45 pm

        I wasn’t directing that at you personally, Fredster. I think it’s important for all of us to talk to our friends family about this. I know you do that.

  6. ANonOMouse's avatar ANonOMouse says:
    March 7, 2013 at 2:22 pm

    I believe bills similar to the Sanders bill have been introduced before only to die in that limbo between the two chambers. I hate to be Debbie Downer, but even if this bill passes in the Senate, the House companion bill will never get to the floor for a vote. Boehner will dispatch it file 13.

    • bostonboomer's avatar bostonboomer says:
      March 7, 2013 at 2:43 pm

      Reid is co-sponsoring the bill. I don’t believe the Senate will go along with SS cuts. If they do, they’ll lose their jobs–and that includes many Republicans. Something like 70% of Republicans are opposed to cuts in SS and Medicare.

  7. Fredster's avatar Fredster says:
    March 7, 2013 at 2:38 pm

    From the WaPo link…am I reading this correctly? They are going to fund government through the rest of the year but with the sequester cuts?

    In hopes of avoiding a crisis this month, the House approved a six-month spending bill that would fund the government through the end of the fiscal year. The measure passed 267 to 151, with most Republicans supporting it and most Democrats voting against it.

    The stopgap measure would provide $982 billion, enough to keep federal agencies humming past March 27, when current funding will expire. It also would lock in the across-the-board spending cuts known as the sequester for the rest of the fiscal year.

    So other than keeping the govt running, the sequester cuts stay in?

  8. bostonboomer's avatar bostonboomer says:
    March 7, 2013 at 2:47 pm

    Dean Baker: Has NPR Joined Peter Peterson’s Crusade Against Social Security and Medicare?

  9. RalphB's avatar RalphB says:
    March 7, 2013 at 4:21 pm

    Perhaps being the party of obstruction and No isn’t working out so well after all.

    Poll: Majority Of Republicans Disapprove Of Congressional GOP

    Republicans in Congress are much less popular than their Democratic counterparts, according to a poll released Thursday, with even a majority of GOP voters nationwide disapproving of their party’s leadership on Capitol Hill.

    The poll from Quinnipiac University found that 71 percent of voters nationwide, including 53 percent of Republican voters, disapprove of the job the congressional GOP is doing while only 20 percent of voters overall and 38 percent of Republicans approve.

  10. dakinikat's avatar dakinikat says:
    March 7, 2013 at 4:27 pm

    Sen. Carl Levin (D) of Michigan will retire at the end of his term next year

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