Voices for Children had an opinion piece in today’s Albuquerque Journal echoing Obama’s claims that the “rich” don’t pay enough taxes. He also repeats the canard that the federal government is somehow “integral” to the success of private sector businesses.
First, let’s tackle the tax burden issue which is really all about payroll taxes. The federal government stops collecting payroll taxes after the 106,800th dollar of earned income. That seems unfair, right? Why would Congress do such a thing to hurt low income Americans? Well, according to the Congressional Research Service, “[H]aving different bases for contributions and benefits would weaken the traditional link between the taxes workers pay into the system and the benefits they receive.” In other words, if it is supposed to be “social insurance,” Social Security can’t be welfare at the same time.
Of course, Social Security and Medicare ARE welfare and have been for some time, but that doesn’t mean raising the cap on payroll tax collections so the wealthy pay even more taxes is a good idea. Rather, it is time to “means test” the programs so the wealthy receive less. After all, is it really fair that Mr. Buffett’s secretary is being taxed to provide his Social Security and Medicare?
Then there are all the “essentials” that Bradley and liberals love to bring up whenever federal spending cuts are on the table: roads, research, air traffic control, the weather service, and courts. As the chart below points out, all of these services combined represent a tiny fraction (less than 5% at most) of the federal budget. Many of these “services” could be done more effectively by the free market if the feds got out of the way, but if we are going to have a serious discussion about the budget, people need to understand that it is Social Security, Medicare, Medicaid, and defense that eat up a bulk of the federal budget (and, yes, the chart has a separate category for “welfare,” but that does not obviate the reality that an overwhelming majority of Social Security and Medicare are welfare by different names.