the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
May 23, 2005
In 2003, Social Security taxes produced 40% of federal revenues. That’s almost as much as personal income taxes, which brought in 41%, while corporate taxes made up only 10%.
That’s almost the reverse of fifty years ago when corporations paid 27% of federal taxes, personal income taxes made up 45%, and Social Security taxes produced less than 13%.
That’s a really enormous change, and one that weighs most heavily on those with the lowest income. The cost of government has been shifted onto Social Security, which is a really regressive tax. There is no Social Security tax on income over $90,000, so people with higher incomes pay a lower rate than everyone else.
The change is a drastic one, but it happened in stages. In the last fifty years Social Security taxes have been raised 18 times. In 1955, the Social Security tax rate was only 2% of income. Today, including the Medicare tax, it is 15.3%. That includes what both workers and employers pay in, which economists and the employers consider part of a worker’s total wage compensation.
In that same period, the income tax rate for the top bracket has been decreased four times. These cuts started under Kennedy, when the top tax rate was lowered from 91% to 70%. Under Reagan, the top rate dropped from 70 down to 28%! It was raised a bit under Clinton–but only in exchange for a series of loopholes that benefit only the wealthy. Bush’s tax cuts have dropped the top rate again down to 33%. The rate on the top bracket is never the rate on the entire amount of their income, only on the very top portion. The politicians have lowered the top rate so much that it is barely more than the rate an ordinary worker pays.
The top corporate tax rate has been lowered eight times in the last 50 years, from over 50% to 35%. The "effective" tax rate is always much lower, since the corporations shelter huge portions of their income.
This is what the politicians call "reforming" the tax system. They keep "reforming" upward the proportion workers pay in Social Security taxes and "reforming" down the amount corporations and the wealthy pay in income taxes.
And this is what they are trying to do today again–claiming they need to "reform" Social Security to save it.
Don’t even let them try!