McCain must focus on the payroll tax
Commentator Reihan Salam says some Republicans have lost touch with the economic anxiety of average Americans. He offers a suggestion for self-improvement.
Reihan Salam (PewForum.org)
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TEXT OF COMMENTARY
KAI RYSSDAL: John McCain and the Republican Party will turn their convention back to politics tonight, which provides us the opportunity to do something similar to what we did when the Democrats were meeting last week -- ask some GOP policy types to weigh in on this topic: Where can your party do better?
Commentator Reihan Salam says some Republicans have lost touch with the economic anxiety of average Americans, and he offers a suggestion for self-improvement.
Reihan Salam: Republicans have been winning elections by promising income tax cuts for decades. But times have changed. When Ronald Reagan promised to slash taxes in 1980, a median-income family of four was paying almost 12 percent of its earnings in federal income taxes. It's no wonder that the tax burden was the number one issue for middle class families. Since then, however, that number has fallen to less than 6 percent.
Which is why the GOP seems so out of touch with the economic fears that keep Americans up at night. The working- and middle-class voters who form the bedrock of the Republican base still worry about their income taxes, sure -- but they worry a lot more about rising health insurance premiums and gas prices and the huge share of their income that goes to the regressive, job-killing payroll tax.
This year, John McCain has offered voters a decent plan to tackle health-care costs and a way forward on energy. But if he wants to win the election and build a lasting Republican majority, he needs to go further than Ronald Reagan ever dared. He needs to take on the payroll tax.
In 2005, the payroll tax raised $760 billion. The income tax raised $1.1 trillion. The main difference is the income tax burden is borne by the rich, while the payroll tax hits working stiffs. That's why we need a fairer, more family-friendly system. Call it a progressive consumption tax with a twist. The rich would pay a higher rate than the poor. Savings would be exempt. And now for the twist . . .
The idea behind the payroll tax is that, through Social Security, you eventually get out of the system what you put in. But we all know that today's retirees are supported by today's workers. And tomorrow's retirees will be supported by today's children. So why not give parents of young children a big credit against the payroll tax -- big enough so that a middle-class family with two or three kids will pay zip?
The Democrats will cry foul. But moms and dads across the country will know that the Republicans are looking out for them, and not just a bunch hedge-fund billionaires.
RYSSDAL: Reihan Salam is the co-author of the book "Grand New Party: How Republicans Can Win the Working Class and Save the American Dream."
Comments
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From Plainwell, MI, 09/03/2008
In his commentary of 9/2/08, Reihan Salam urged that the Republican Party lower the payroll taxes because this would buy the support of the workers that contribute substantial portions of their income to these government social programs.
He barely bothers to discuss whether this would benefit these people or the country as a whole. He wasn't talking about monetary or fiscal policy. He was primarily advocating a marketing policy. His suggestion to retool the payroll taxes is a straight forward attempt to buy political support.
Any suggestion to reduce government revenues is meaningless without a counter balancing suggestion to replace those revenues or reduce specific government expenses. The Republicans have long accused the Democrats of being the party of tax and spend. This of course is the most sensible way to pay for government programs. The Republican Party policy of the last eight years has been to borrow and spend. This is a much less honest and responsible approach.
From Boston, MA, 09/03/2008
Mr. Salam - I agree that the government should reduce the payroll tax burden on the working poor and the middle class. The Earned Income Tax Credit essentially does this to a limited extent for very low income wage earners. This could be expanded to more middle income earners. One way to fund this would be to raise the Taxable Wage Base threshold. It currently is set at $102,000 for 2008. This means that employees (and their employers) pay no payroll taxes on amounts earned in excess of that amount. I don't see Republicans agreeing to increase the higher wage earners' burden to help the young children of the middle class or the working poor, though.
From Bloomington, IN, 09/03/2008
Parents already get plenty of tax deductions for having children and now they deserve more? I think not.
From Indianapolis, IN, 09/02/2008
RE "ELIMINATE PAYROLL TAX..." by Reihan Salam
Mr. Salam says that the Republican Party should endorse this to "show that is represents more than billionaire hedgefund managers." Mr. Salam is certainly acquainted with humor, but now he should become acquainted with logic.
The GOP has always looked out for the very wealthy first and foremost. It is a testament to GOP mastery of propaganda, obsfucation, various flavors of bigotry and the inattention of the US voter, that the middle class has ever believed that the Republican Party was on its side. Of course, the ultimate client of the GOP has always been the very wealthy in the personages of oil, coal and nuclear barrons; weapons contractors and, oh yes, hedge fund managers. Remove these nefarious allegiances and effectively there is no Republican Party; there would merely be those self-identified factions of American society who oppose the common good, civil and human rights of others.
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