Social Security
Tax Cuts: To Have or Not to Have?
With a projected budget surplus forthcoming, many conservatives, including
FRC President Gary Bauer, are calling for at least part of the surplus
to be used on tax cuts for working Americans. Bauer advocated a three-percentage-point
FICA, or payroll, tax cut in a Wall Street Journal editorial co-written
with Stephen Moore of the Cato Institute. It is estimated that Social Security
may go bankrupt by 2029 and proponents of tax cuts argue that Americans
need to be able to keep and save more of their own money in order to protect
their retirement years. Several senators may introduce a plan to reduce
the FICA tax by two percentage points.
[Source: Family Research Council’s LEGISLATIVE HOTLINE, Friday,
March 27, 1998]
Social Security.
FRC President Gary Bauer outlined a plan to congressional leaders on
Thursday, February 18 to devote all projected budget surpluses to fix the
long-term deficit in Social Security while simultaneously providing a payroll
tax cut for America's working families. In letters to Senate Majority Leader
Trent Lott, House Speaker Newt Gingrich and other congressional leaders,
Bauer urged that "each upcoming budget surplus should be devoted,
dollar-for-dollar, to a reduction in the payroll tax rate, until such rate
reductions reach 20 percent." In exchange, workers who benefit from
the tax cut would experience a proportional reduction in the scheduled
growth of their future benefits. Bauer pointed out that workers would have
the freedom to invest the additional money they derive from the payroll
tax cut in a personal retirement plan, the stock market, their children's
education or other family priorities. In addition to providing immediate
tax relief for working families, the FRC proposal is designed to address
the demographic deficit facing Social Security when the baby boomers retire.
Bauer emphasized that his proposal would not affect current retirees, but
only those who benefit from the upcoming payroll tax cuts while they are
still in the work force.
[Source: Family Research Council’s LEGISLATIVE HOTLINE, Friday,
February 20, 1998]