CLASS » TRUTH ADDICT » U.S.

New York Times’ Complicity in Raiding Social Security

December 20, 2012   ·   0 Comments

Source: NYTX

By Michael McGehee:

If you were to go to the New York Times website and type in “Social Security” into their search engine you will get more than twelve thousand results for the last twelve months.

But if you were to include “cap” and “$110,100″ to the search parameters then the results dwindle down to just four articles—one of which is a letter to the editor, one of which does not favor removing the cap but simply acknowledges the cap, and only one columnist for the entire company actually took the sensible approach which reflects the majority of Americans, which is not to cut benefits.

This past summer, James Albert of Lancaster, Pennsylvania wrote a “letter to the editor” in which he commented that,

In a nation that prides itself on fair play and equal opportunity, it seems incongruous that people with wealth-based income — interest, dividends, capital gains, rent — are excused from paying Social Security (traditionally 12.4 percent) and Medicare taxes (2.9 percent) on that income. Equally odd, they do not pay Social Security tax on wages above $110,100. Shouldn’t these taxes be paid on all income? Taxing the “earned” and not the “unearned” seems rather un-American, doesn’t it?

And a few months prior to Mr. Albert’s poignant letter, Gail Collins, an op-ed columnist for the New York Times, wrote in her opinion piece “A Big Day’s Coming,” that, “The basic answer to fixing the long-term Social Security imbalance is just to eliminate the payroll tax cap, which currently exempts all income over $110,100 a year.” Collins then wrote, “Do that, and you have solved the problem.”

And in a published conversation with fellow NYT columnist David Brooks, Collins told Brooks that her “ideal road map for getting Social Security on a secure footing for the very long term would be to lift the cap.” Gail was right to point out that, “Right now the payroll tax applies only to an individual’s first $110,100 in income,” and that, “End the cap, end the problem.”

With no leg to stand on, Brooks followed up with the comment: “Don’t forget about the need to raise the retirement age. That’s only fair.”

Luckily, Collins didn’t back down, and she shot back:

The retirement age for maximum benefits is currently 66, on its way to 67. I think raising it further would be dumb. People may be living longer but often they don’t have the option of working longer. All you’re really doing is forcing the people who retire earlier – who are often the neediest – to accept lower benefits.

We are very close to seeing the Obama administration cut benefits to stave off the so-called “fiscal cliff.”

In the summer of 2011 President Obama offered, in his debt ceiling talks with Republican Speaker of the House John Boehner, to cut Social Security benefits. In late July of last year, after Boehner walked away from the talk, President Obama told reporters:

Essentially what we had offered Speaker Boehner was over a trillion dollars in cuts to discretionary spending, both domestic and defense. We then offered an additional $650 billion in cuts to entitlement programs — Medicare, Medicaid, Social Security. We believed that it was possible to shape those in a way that preserved the integrity of the system, made them available for the next generation, and did not affect current beneficiaries in an adverse way.

It was the president who offered to cut benefits. He was willing to “affect” the “next generation” in an “adverse way” in order to raise the taxes on the rich to a level that is still considerably lower than it was during the so-called “Golden Age of Capitalism”—when unemployment was lower, and the economy and the middle class was growing. For most of the “Golden Age” the tax rate on the top earners was more than ninety percent. Now it is in the mid-thirties, and President Obama is not even trying to get it into the forties or above.

And why? Because the deficit is growing out of control. To resolve this Congress passed a bill that says if they do not come up with an agreement to reduce the deficit then automatic cuts will kick in, and we have less than two weeks for Congress to come to an agreement before the recession takes a considerable turn for the worse. In other words, they purposefully created a crisis for them to solve.

But notice what neither President Obama or the Republicans are calling for: a serious reduction in military spending.

The United States is five percent of the population but accounts for about half (some say even more) of the worlds “defense” expenditures. What is behind this enormity is our multiple wars, hundreds of foreign military bases, foreign torture sites, assassination programs (i.e. President Obama’s “kill list”), huge navy, and weapons that don’t work, and many of which should not even exist.

In America, where income inequality continues to grow, and where black America disproportionately makes up the prison population, those murdered by cops, those who comprise the lowest wages and highest rates of home foreclosures and unemployment, and where the Economic Policy Institute recently said “the poverty rate for female-headed families with children was 40.9 percent, nearly 87 percent higher than that of male-headed families with children,” and where federal poverty rates are at their highest levels in fifty years, it makes absolutely no sense to put the costs and burden of fiscal austerity on those who are more vulnerable and not responsible for our fiscal problems.

The bottom fifty percent account for just two percent of the nations wealth, and the bottom forty percent have three-tenths of one percent. Whereas the top twenty percent enjoy eighty-four percent of our wealth, and the notorious one percent account for a third. In the aftermath of the Great Recession, an amazing ninety-three percent of the wealth gained in the United States went to the top one percent.

A few months back there was an interesting item in the news: “Super rich hold $32 trillion in offshore havens.”

This is more than the five richest countries GDP‘s combined. That’s the U.S., China, Japan, Germany and France. Combined. You can only imagine how helpful this revenue would be for the supposed “budget” crisis plaguing America and Europe.

For obvious reasons, the lobbyists and politicians we see or hear in the media (at the New York Times the sole exception is Gail Collins) don’t point out how much revenue we are starved by these tax havens while they preach about the need to reduce spending, lower taxes, and so on. All in the name of fiscal conservancy, of course. And they don’t tell us that if we, in the United States, reverted back to the tax rates of the 1950s, that is to say if we stopped catering to the wealthy, there would be no problem.

The budget is $3.796 trillion.

Revenue to pay for it is $2.469 trillion.

The deficit: $1.327 trillion.

An alternative reading of this is that the profits of America’s businesses could pay for the entire deficit and still retain $500 billion in profits (America’s corporations made close to $2 trillion in profits in 2011, but paid just under $200 billion in taxes). And again, this is without touching the $32 trillion in tax havens, reverting back to the tax rates for the 1950s, or reducing our radically bloated Pentagon system. But both the Republicans and Democrats seem to think the American working class should bear the brunt of the burden of resolving the deficit.

“The crisis” is not about “entitlements,” as President Obama called them. In fact, the deficit is not even really that big of a crisis. Unemployment, allowing financial capital to run amok, our wars, our carbon footprint (and its ecological consequences), and redistributing wealth to the wealthy . . . these things are the real crises. Even this fearmongering about the deficit being a crisis is a bigger crisis, since it is being used to attack the social safety nets for the working poor.

The crisis is about taking from the poor and giving to the rich. And if you observe carefully you will notice the solutions being worked out by the Republicans and Democrats largely target one demographic: the working class, and not what caused the deficit: tax cuts for the rich and military spending.

And when they talk about “entitlements” and welfare they almost always fail to talk about corporations. Here is a list of the 100 top government contractors for the last year we have information, 2010.

Many of these corporations receive almost all of their revenue from the government (i.e.our tax money), and these are companies with corporate executives who enjoy high salaries, and have large profits.

Lockheed Martin? Northrop Grumman? These are two of the largest government contractors, yet they rely almost entirely on government handouts. And each had more than $2 billion in annual profits.

General Electric? They are ranked 21st with more than $3 billion in corporate welfare, and had more than $14 billion in profits. But check this out: they paid no federal income taxes.

For a bit more perspective consider the following: There are a little over 50 million people on Social Security, whose annual budget is just over $880 billion. This comes out to about $17,000 per recipient. Compare this with the more than $280 billion in corporate welfare to the top 100 contractors, which comes out to $2.8 billion per contractor.

For earned income, we pay about one trillion dollars a year in taxes, with the richest five percent paying nearly sixty percent of that, or six hundred billion dollars. Some may think that is unfair, but when you consider how they hoard all the wealth (see above), then what is unfair is that they don’t pay more! Now, their current average tax rate is twenty percent. In the 1950s it was about fifty percent. What this means is that if they were paying the same tax rate today as they were sixty years ago we would have an additional nine hundred billion dollars to add to our revenue.

But it does not stop there. Corporate taxes are about two hundred billion dollars a year, but this is half of what it would be if the 1950s tax rates were applied to today.

$900 billion + $200 billion = $1.1 trillion in additional budget revenue.

And excise taxes are about sixty billions dollars, and would be three hundred billion dollars more if, again, the 1950s tax rates were used now.

That’s a total of $1.46 trillion in increased revenue which just by reinstating the tax rates for the richest five percent, corporations, and excise duties from the 1950s—the so-called “Golden Age of Capitalism.” But there are externalities to be considered: with this surplus benefits and programs could be expanded. Wages could go up, which would be more tax revenue.

But why stop there, right?

Remember our bloated military spending? We spend more than ten times as much per capita as the country with the second highest expenditures.

What if we reduced our spending by a factor of ten? Or, what about just knocking off a trillion dollars? Even at two hundred billion dollars a year we would still spend more per capita than any other country in the world.

But this means we would really have to disarm our nuclear weapons, close down Homeland Security, put an end to many weapons programs that don’t work and shouldn’t exist in the first place, close our foreign bases, cut aid to foreign governments, cancel our covert “intelligence” programs, and end our illegal wars of aggression, back-off with the militarization of local police forces, et cetera. It would be the end of our nuclear-armed imperial police state (and when considering its carbon footprint, ending this would be a great victory for the environment!).

Keep in mind our federal budget has now decreased to $2.8 trillion and our revenue has increased to more than $4 trillion, leaving us an annual surplus increased by more than one trillion dollars (and we haven’t even touched the offshore tax havens).

That would be a sane and fair solution to our economic woes. Instead we see the President of the United States going after a program that has aboslutely nothing to do with the deficit (Social Security is taxed separately and is running a surplus that will last for more than two decades from now), something which even former President Ronald Reagan was opposed to, and right along with him is the New York Times and their heavily lopsided coverage that denies their readers of relevant information.

Supporters of NYTeXaminer, what do you think would happen if the New York Times acknowledged how unfair it is that someone who makes $220,000 a year sees only half of their income taxed for Social Security while a single-mom working overtime in a call center sees all of her income taxed for the same program, and tried to mobilize the public to take action and demand the government leave their vital programs alone?

Correction added 1/10/2013: The author writes that querying the Times’s search engine for the phrase “Social Security” over a 12 month period yields twelve thousand results. However, quotation marks were not used in the query which would have ensured that the words “social” and “security” were found one after the other. The correct search over the same period yields 7,870 results.

By michaelmcgehee

Readers Comments (0)