Friday, April 15, 2016

Social Security tax rate issue mauled in debate

In last night's debate, listening to the yelling about social security tax rates and the level of income that is taxable was painful to hear, as was much of the debate.  Some commentators, who one could have presumed were smart, viewed this as a big Sanders' win.  In fact Sanders' contradicted his own goals and goaded Clinton in an unattractive manner.

Sanders supports raising the amount of income taxable for Social Security purposes from $118,000 to $250,000.  In his words, this is "tax the rich".  Much of the time Sanders talks about the top 1% of the population that is rich, or just as often the 1/10th of the 1%, or sometimes even a smaller sliver.  At those levels he is easily understood even if all of his proposals are not.  His characterization of families making up to $250,000 being viewed as rich may well be true in my southern Virginia hometown or in many small towns around the country, but that is not remotely the case in the city that he was speaking in.

In New York City the sales tax is 8.875%, the state income tax is for most with any income of consequence is between 6.85% to over 8%, and one can guess a federal income tax of 28% or more. Add up all of this plus the 6.2% Social Security tax and the starting point for spendable income is dramatically reduced.  Factor in the cost of housing in any area with an adequate school system and reasonably manageable access to mass transit, and for a family of four $118,000 is just scratching into the middle class while $250,000 doesn't come close to making that family rich.  Yet Sanders rigidly proposes expanding the regressive 6.2% social security tax to further burden those trying to get by, or build some wealth, maybe save for their children's education or for their own retirement.

He would not let Clinton get a word in without interrupting as she was trying to lay out ways like taxing passive income that would actually touch the vaunted 1% that Sanders always rails against. With the crowd shouting, Bernie pressed his case for here to commit to the 6.2% up to $250,000.  She never completely gave in, and that's to her credit.

Bernie's proposal is wrong headed, but maybe he did win the debate point as the issue could not come close to being fully discussed in that setting.  His vague explanations of many of his own proposals, added to this unattractive exchange, won him no points here as if that's of any consequence. He did come ready to raise awareness of himself as a candidate, and that he did.

1 Comments:

Anonymous kf said...

Many of those yelling in the audience for Bernie were unlikely to be fully supporting themselves financially, and almost totally unlikely to be supporting a family. They like the personal appeal of Sanders, and Clinton to them represents the past.

4:57 PM  

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