Keep the Wage Tax to Help Fund Social Insurance
Keep the Wage Tax to Help Fund Social Insurance
This chapter explains why wage tax should be continued to help fund social insurance in the United States. It argues that the politics of using payroll taxes to finance Social Security, unemployment insurance, and Medicare have changed little since Roosevelt's day. The chapter states that it would be unwise to reduce payroll taxes substantially before reaching an agreement on the future structure, coverage, and financing needs of Social Security, Medicare, and Medicaid. For more than seven decades, payroll taxes have served the United States well as a way of financing its programs of social insurance. The chapter suggests that it would be unwise to abandon or eviscerate these taxes now—unmooring Social Security and Medicare from their revenue stream, while knowing that the country is on the precipice of a large shortfall in the funds necessary to keep these programs viable.
Keywords: wage tax, social insurance, payroll taxes, unemployment insurance, Medicare
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