Even assuming taxes fund spending, why should Social Security be pre-funded?
There is no inherent need to single out any particular area of public spending as causing a budget deficit if it is not pre-funded. It is a travesty of progressive tax policy to only oblige workers whose wages are less than (at present) $105,000 to pay this FICA wage withholding, exempting higher earnings, capital gains, rental income and profits. The raison d’être for taxing the 99% for Social Security and Medicare is simply to avoid taxing wealth, by falling on low wage income at a much higher rate than that of the wealthy. This is not how the original U.S. income tax was created at its inception in 1913. During its early years only the wealthiest 1% of the population had to file a return. There were few loopholes, and capital gains were taxed at the same rate as earned income.
The government’s seashore insurance program, for instance, recently incurred a $1 trillion liability to rebuild the private beaches and homes that Hurricane Sandy washed out. Why should this insurance subsidy at below-commercial rates for the wealthy minority who live in this scenic high-risk property be treated as normal spending, but not Social Security? Why save in advance by a special wage tax to pay for these programs that benefit the general population, but not levy a similar “user fee” tax to pay for flood insurance for beachfront homes or war? And while we are at it, why not save another $13 trillion in advance to pay for the next bailout of Wall Street when debt deflation causes another crisis to drain the budget?
But on whom should we levy these taxes? To impose user fees for the beachfront reconstruction would require a tax falling mainly on the wealthy owners of such properties. Their dominant role in funding the election campaigns of the Congressmen and Senators who draw up the tax code suggests why they are able to avoid prepaying for the cost of rebuilding their seashore property. Such taxation is only for wage earners on their retirement income, not the 1% on their own vacation and retirement homes.
Not clear to me what the pre-funding (so-called) of Social Security accomplishes, other than driving it home to the proles that they're proles.
And given the circles most Congress critters move in these days, I'm sure that most of them know very well that nobody checks how much revenue is coming in before writing the checks for their beach house insurance; Congress authorized the money, so write the check! Ditto wars. A President that checked the piggy bank before responding to an attack on the continental United States would be impeached, and rightly. So the argument that "Congress believes that payroll taxes fund Social Security, and therefore we must say that taxes do that, even though we know that is not true" seems pretty foolish to me; talking to each other, as opposed to the press or their constituents, I don't think Congress believes any such thing.
The concept that payroll taxes fund Social Security only reinforces the second class status of those who work for a living, and especially those who punch a time clock. We should really stop repeating it; that "prpgressives" do repeat it is not, in my eyes, a recommendation....