Click here to access article by Dean Baker from CounterPunch.
This economist who is a darling of liberal-left circles (even as far left as Z Communications), reinforces the confusion over the issue of Social Security/Medicare funding. This is accomplished by sticking to the ruling class framing of payroll contributions as "taxes". Thus, his proposed solution--issue tax credits to workers and their employers--suffers from this confusion.
Contributions to retirement pensions and health care are totally separate from income taxes. To equate them allows the ruling class to attack these worker programs that our ancestors fought so hard to create back in the 1930s (for example, Social Security), and then in 1966 with Medicare given to workers by Lyndon Johnson as a sop to workers so that they would soften their resistance to the unpopular war in Vietnam.
Hence, the ruling class likes to mix them up with withholding taxes which are a deposit against yearly income taxes. Everyone is against taxes, so the framing of the contributions to these pension and health insurance funds as "payroll taxes" makes it easy for ruling class politicians to reduce worker contributions. Such cuts are a direct attack, albeit a stealth attack, on these worker benefit programs.
If I understand his solution correctly in spite of this confusion, his tax credit proposal would decrease the income tax rates on employees and their employers. While this would be fine for workers, do large corporations need more tax cuts after their taxes have declined so radically in the past several decades? Corporations are already holding hordes of cash. And, should we reward these corporations who in many cases have shipped their operations along with American jobs to locations in other countries? What kind of public policy is that?! Well, it's called liberal policy (in the political sense) and Baker is an exponent of liberal policies. What the US and the rest of the world needs most urgently are radical changes in social-economic arrangements.
