How Republicans plan to 'save' Social Security: Massive benefit cuts for most, tax cuts for the rich

Rss@dailykos.com (joan Mccarter) · Monday, December 12, 2016, 7:33 pm

The newly introduced proposal from House Republicans to "save" Social Security is exactly what you'd expect: "saving" Social Security by destroying its promise of guaranteed benefits. Rep. Sam Johnson's (R-TX), the powerful Chairman of the Social Security Subcommittee of the House Ways and Means Committee unveiled his plan last week, basically daring Presidential-popular-vote-loser-elect Donald Trump to renege on his campaign promise to protect the program. But because Johnson says it's a "plan to permanently save Social Security," a willfully uninformed Trump will probably go along with it. That, and the fact that it gives a tax cut to the rich.

Typically, Social Security “reform” proposals at least pay lip service to the fact that the payroll tax has been giving the wealthy a larger and larger pass, by covering an ever-shrinking percentage of their wages and exempting the capital gains and dividends that make up a larger share of high-end income.

Johnson’s plan doesn’t mention that at all. It does, however, give higher-income beneficiaries a tax cut by eliminating income tax on benefits starting in 2045. The tax affects about 30% of retirees by treating at least half of the benefits of those earning more than $32,000 as taxable income.

By law, the tax must be credited to the Social Security system. It’s scheduled to bring in as much as $78 billion in 2025. Johnson’s rationale here is murky. If Social Security is in such bad shape that he sees the need to slash benefits, why cut its revenue, too?

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