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Editorial
September 15, 2010
If this year's election is about the economy, voters would be wise to listen to a congressman who's been there.
Republican Pat Toomey.
The former congressman has spoken and written extensively about Social Security and corporate taxes.
His solution: End both.
Toomey recently came in for criticism when he told the Pennsylvania Press Club "I've never said I favor privatizing Social Security."
He may never have used those exact words, but Toomey is a proponent of ending Social Security as it now stands by allowing younger workers to invest part of their Social Security contribution in private markets. He has written and spoken about it extensively.
In his book "The Road to Prosperity," Toomey wrote that he would allow older workers to keep their Social Security accounts while having younger workers switch a portion of their Social Security payments to private accounts.
Toomey said privatization, which President George W. Bush unsuccessfully pushed in 2005, would provide a dramatic improvement on Social Security's low investment return, and would offer today's workers "the promise of more retirement income in the decades to come."
Sounds wonderful on paper, but removing any money from Social Security jeopardizes a system that, with a few minor tweaks — increasing the earnings cap, phasing in a higher retirement age and incorporating means testing — could be self-sustaining for another 75 years.
And given today's markets —investors lost an average of 40 percent of their retirement savings based on 2008 returns alone — the private markets argument is hard to make.
Toomey also has said he favors eliminating corporate taxes — a view that was the focal point of Congressman Joe Sestak's first commercial. The commercial uses a film clip from a July 20, 2007, CNBC broadcast in which Toomey said, "Let's not tax corporations. ... I think the solution is to eliminate corporate taxes altogether."
PolitiFact, the agency that checks the veracity of political ads, found the ad to be "mostly true." PolitiFact also said it gave the Toomey camp "the opportunity to say the candidate opposes zero corporate taxation, but the campaign did not do so."
Toomey spokeswoman Nachama Soloveichik, has said Toomey favors lowering business taxes, but recognizes that a zero corporate tax rate is "impractical."
He has, however, written that he favors a zero corporate tax rate.
Corporations already use loopholes to avoid paying taxes. If corporate taxes were eliminated completely, it would add $225 billion to the national debt every year.
And who would pick up that tax burden? The middle class.
According to Citizens for Tax Justice, Toomey's preference for a 17 percent Flat Tax would allow CEOs at bailed-out banks to pay nothing on Wall Street earnings "while 95 percent of workers would see a tax hike of roughly $3,000."
That's an impractical approach to fixing the economy.
Read more: http://articles.lancasteronline.com/local/4/289695#ixzz10CmKNw63