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Monday, March 14, 2005

I disagree with Matt Yglesias too.

Yglesias argues that Democrats should not propose a plan to save social security

I think the Democrats should propose a reform which consists entirely of eliminating the cap on the payroll tax. There is overwhelming support for such a proposal in every poll on the issue. It would cover the social security shortfall for, at least, the next 75 years.

Yeglesias' argument is that prefunding is a fraud, so an increase in FICA is just like an increase in an other tax. Then he concludes arguing that Democrats should instead propose reducing the general fund deficit by increasing some other tax. That is two things are the same and therefore one is better than the other.

I accept the general rule of political strategy that one should avoid specific proposals about spending cuts, one should not take strategy advice from ones adversaries and one should not distract attention from Bush while he is trying to defend a terrible and unpopular proposal.

Every rule has an exception. The elimination the cap is such excellent policy and such excellent politics that it is an exception.

There is no law of nature which implies that FICA must be regressive. There is overwhelming support for making it, at least, a flat tax on payrolls. Furthermore, the Democrats have the advantage of flexibility since they are in opposition. On social security, no decent compromise with the Republicans is possible, so There is no reason for them to try to come up with a proposal which is acceptable to Republicans. Instead they should make a simple effective wildly popular proposal which is absolutely unacceptable to the Republicans.

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