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December 3, 2009

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Letter: Tax credit could be useful tool

Tuesday, Feb. 13, 2001 | 8:44 a.m.

President Bush and members of our Congress are discussing the paying back of the tax surplus to those who paid it in. Those taxpayers who are not covered by the Social Security program (employees of all levels of our government as well as the elected officials) did not contribute to the surplus!

The surplus exists only because each year since 1936 the Social Security taxes collected exceeded the benefits paid out. Over the years this has totaled almost $5 trillion.

The fact that such overpayments should have been invested in the private sector for future benefit payments is another issue.

Since they prefer to pay the current Social Security surplus back to those who created it, I suggest they do it through a tax credit representing 6.2 percent of the first $5,000 of taxable income. Then, if they want to continue to collect more than they need for each current year, I suggest that they impose a 6.2 percent tax on all income of any type which is deferred beyond the taxable year in which it is earned. (Deferred income for top corporate executives is an interesting story to be covered at another time.)

LARRY JOHNSON

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