Lying, Cheating and Stealing to Gut Social Security (Dean Baker)

Making Social Security More Progressive: The Games They Play in Washington

To understand what CAP and other proponents of increasing the progressivity of Social Security mean, consider the idea of raising a marginal tax rate paid by many middle-income people from 25 percent to 35 percent. The current 25 percent bracket begins at an income of $34,500 for singles, and $69,000 for couples.

Raising this tax rate by 10 percentage points would be a substantial hit to tens of millions of families who are certainly middle class by anyone's definition. However, this tax increase would also be progressive. The bottom 60 percent of the income distribution would not be touched at all, and those just over the cutoffs would only see a small increase in their tax burden.

Nonetheless a couple earning $100,000 a year would see their taxes rise by $3,100, which is not a trivial matter for a middle-class couple. This is the way in the CAP plan for cutting Social Security benefits is progressive. It would lead to substantial reductions in Social Security benefits for people who earned an average of $60,000 or $70,000 during their working lifetimes. While such people earned more than most workers, such salaries don't quite put them on par with Bill Gates.

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