Did Reagan's increased FICA tax take away half the savings capacity of most Americans?

[dkf]

"At its peak the excess tax equaled 4 percent of wages subject to FICA. That excess tax took away half of the savings capacity of the vast majority of Americans.

Factor in the time value of money and the effect of Reagan’s and Greenspan’s excess FICA tax was enormous and helps explain why so many Americans are mired in debt today. Fewer than half of taxpayers have ANY cash savings, while more than half did before Reagan took office.

Because of to Reaganomics, Social Security was converted from a pay-as-you go system into a subtle way to subtle way to overtax wages and thus finance tax cuts for the rich. The integrated federal budget (SS used to be accounted for separately) made this sleight-of-tax possible.

Without overtaxing workers Reagan would not have been able to persuade Congress to give massive tax relief to the few who paid the 70 percent (and later 50 percent) marginal rates."

The author of the post says it is from David Kay Johnston. I couldn't find the page.

http://www.cjr.org/the_audit/what_is_social_security_trust_fund.php?page=all&print=true

[FreakinDJ]

1. NO - the Corp Raiders did when they stole their Pensions

These Fucking RATpubliCONs have no shame

[reformist2]

2. It's a complex issue - we did need to create a SS trust fund for the boomers.

[Warren Stupidity]

10. Did we? Odd that, as the alleged trust fund is the 800 lb gorilla

in the Bullshit Debt Crisis. It is the avoidance of paying that trust fund back the 2.xT owed it that is the unspoken narrative in this idiocy. Here's your trust fund, you can't have it when you need it.

Scrap the entire funding system. End FICA. Pay SS and Medicare out of the regular budget and raise income taxes appropriately to do so.

[snot]

3. I'd like to hear more informed comment about this.

Another hindrance to savings, of course, has been the fact that our inflation-adjusted earnings have remained flat or worse for 40 years.

[Major Hogwash]

4. This part of that article was much more interesting than what you quoted.

"And of course, since much of this money has been transferred from lower- and middle-class workers to rich folks (you quit paying payroll taxes on income over $106,000), as we’ll see below, you could also raise or eliminate the cap on the payroll tax. For all the talk about how high taxes are on the rich, I’ll bet you didn’t know the effective income tax rate on those with adjusted-gross incomes of $2,000,000 is just 22 percent, not 35 percent."

[dkf]

9. Was transferred. The deed has already been done.

How do you fix something when all the players are different?

The only way to fix it is the estate tax.

[JDPriestly]

5. If was theft by accounting trick.

And thanks to this theft, the lowest paid of working Americans will be tricked into paying a much higher share of the taxes to the General Fund than is fair.

We have to raise taxes on the rich.

[csziggy]

6. If wage increases had kept pace with the other parts of the economy

It would not have been such a big hit. Although American workers have continued to increase productivity, pay rates have been almost flat.

If we want to blame Reagan, it belongs with his union killing moves as much as anything else.

[noiretextatique]

7. YES eom

[Angry Dragon]

8. NO!!

Greed from the top is the cause

[Warren Stupidity]

11. Doesn't that assume that people would actually save that money instead of spending it?

I find that assumption wanting.