| 来源类型 | Article
|
| 规范类型 | 评论
|
| Don’t raid the General Treasury for a payroll tax holiday |
| Alan D. Viard
|
| 发表日期 | 2019-10-15
|
| 出版年 | 2019
|
| 语种 | 英语
|
| 摘要 | In August the Trump administration considered a temporary reduction in Social Security taxes, commonly referred to as a payroll tax holiday, as a way to provide Keynesian demand stimulus to the economy. If Congress adopts a payroll tax holiday, it will probably transfer general revenue to the Social Security Trust Fund, shifting the holiday’s revenue loss from the trust fund to the general treasury. Congress made a similar transfer during the previous payroll tax holiday in 2011 and 2012. Repeating that raid on the general treasury would be a mistake.
Social Security was established as a self-supporting program in which spending cannot exceed past and present revenue from earmarked taxes, primarily payroll and self-employment taxes. Because Social Security is intended to be a self-supporting program, it is spared from having to compete with other programs in the annual budgetary process. However, it is subject to another form of fiscal discipline — the constraint that spending cannot exceed earmarked tax revenue.
Providing general revenue transfers to Social Security would alter the program’s budgetary status. The exact outcome would depend on whether and how the general revenue transfer affected perceptions of Social Security. If Congress and the public incorrectly perceived the program to still be self-supporting, fiscal discipline would be undermined; Social Security would still be protected from the annual budget process, but its spending would no longer be limited to earmarked tax revenue. If Congress and the public recognized that the program was no longer self-supporting, Social Security would be seen as — and perhaps explicitly transformed into — a general revenue program. That outcome would disrupt long-standing attitudes toward Social Security and might force changes in the benefit formula.
Because Social Security should remain a program with earmarked financing, a payroll tax holiday financed from general revenue should not be adopted. If additional Keynesian demand stimulus is needed, it can be provided in a progressive and effective manner through refundable tax credits and other income tax provisions.
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The full version of this piece will be posted on this site on 11/12/19. |
| 主题 | Economics
; Tax Reform
|
| 标签 | budget reform
; payroll tax
; Social Security
; tax revenues
|
| URL | https://www.aei.org/articles/dont-raid-the-general-treasury-for-a-payroll-tax-holiday/
|
| 来源智库 | American Enterprise Institute (United States)
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/266383
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Alan D. Viard. Don’t raid the General Treasury for a payroll tax holiday. 2019.
|
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