William A. Alexander – 3/2/05

This page was last updated on March 2, 2005.

Don’t buy Santorum’s pitch; William A. Alexander; Beaver County Times; March 2, 2005.

Below is a detailed critique of the letter.

“Sunday on ‘Meet The Press,’ U.S. Sen. Rick Santorum lied about Social Security taxes and federal income tax levels.”

[RWC] It never ceases to amaze me how easily the “liar” accusation rolls off the tongues of some people. I find those that most easily accuse others of lying are themselves “truth challenged.”

“Santorum stated that to raise the upper limit of Social Security payments above the present $90,000 would increase taxes on those people by 12.4 percent. Social Security taxes are made up of 6.2 percent from the employees plus 6.2 percent paid by their employers.

“He said it as if the whole 12.4 percent was from any employee wages above $90,000. He then added these people are already paying 35 percent in income taxes.”

[RWC] Sorry, Mr. Alexander, but the “employer portion” of the Socialist Security tax is one of the myths used by Democrats to sell Socialist Security in 1935. It’s a deception intended to make us believe the tax is half its true level. If you believe the employer pays 6.2% out of his own pocket, I have a bridge to sell you. The 6.2% paid by the employer on your behalf is part of your overall compensation, just like “employer paid” premiums for healthcare insurance and other benefits. In truth, the “gross pay” shown on our paychecks is really the gross less 6.2%. Technically, it’s really your gross less 5.84%, but I used 6.2% for clarity.

“Studies have indicated to raise the top limit on Social Security deductions to the $175,000 to $200,000 range alone would solve the Social Security solvency problem.”

[RWC] Mr. Alexander, these are confiscations or taxes, not deductions.

It’s no surprise Mr. Alexander didn’t cite the sources of the “studies” he mentioned. The truth is, even completely eliminating the Socialist Security max taxed earnings cap would not “solve the Social Security solvency problem.” According to the Socialist Security Administration actuaries, eliminating the cap completely would push SS’s critical dates by 7 years (when outlays exceed taxes) and 38 years (when the surplus is exhausted).¹

I assume Mr. Alexander doesn’t realize that the more taxes you pay into Socialist Security, the greater your benefits. As a result, increasing the max taxed earnings cap also increases Socialist Security’s future liabilities. Once Mr. Alexander learns this, he’ll probably claim benefits for the “rich” should be cut.

For those who believe increasing Socialist Security taxes is the answer, consider the following. Today’s 12.4% Socialist Security tax is 6.2 times its original 2% in 1935. Today’s $90,000 maximum taxed earnings cap is 30 times the original $3,000 of 1935 and now increases every year by law. It more than doubled in the last 18 years alone and increased nearly $14,000 since 2000!

“For a single person filing income taxes with standard deductions, the tax rate is 28 percent up to about $157,000. For income over $157,000 to about $336,000, the tax rate is 33 percent. Incomes over that would pay the top rate of 35 percent. Married filing jointly, persons with additional dependents or higher deductions would pay less.

“Santorum’s statements are either totally disingenuous or he is so far out of touch with his constituents he is clueless on what anyone pays in taxes. Either way, Santorum should be voted out of office in 2006, let alone be voted for president or vice president in 2008.”

[RWC] Whether the income tax rate is 28% or 35%, increasing the max taxed earnings cap would increase taxes for these workers on their incremental earnings to anywhere from 40.2% to 47.2%. Does Mr. Alexander believe it’s fair for the feds to take 40.2% of your incremental earnings?

Mr. Alexander wrote, Sen. Santorum “is so far out of touch with his constituents.” Aren’t the “rich” also part of Sen. Santorum’s constituency? Don’t they deserve representation? Remember, the “rich” already pay a disproportionate share of income taxes. As of the 2001 tax year, those earning more than $90,000/year were roughly 10% of those persons filing income tax forms, yet they paid about 65% of the taxes collected. The top 1% (above about $290,000/year) paid 34%. The bottom 50% of earners paid only 4%!

“I imagine more than 90 percent of Santorum’s constituents have paid Social Security taxes on every dollar they ever made. I believe to save the system that all of his constituents should pay Social Security taxes on every dollar they make. This would generate a large surplus and permit the Social Security tax rate on everyone to be reduced, giving all working Americans additional money for essentials or retirement savings.”

[RWC] Mr. Alexander must be living in fantasyland. First, as shown above, even completely eliminating the max taxed earnings cap won’t solve Socialist Security’s solvency problem. Second, he believes increasing the tax on the “rich” will allow the tax on everyone else to be reduced and still maintain solvency. I suspect a tax reduction for everyone else is Mr. Alexander’s true goal. In other words, Mr. Alexander wants to turn Socialist Security into an income redistribution program.

“Remember: Santorum lives in Virginia and expected Pennsylvania to educate his kids at more than $100,000 a year.”

[RWC] Mr. Alexander doesn’t tell the whole story. First, it’s not $100,000/year. It was $100,000 since the 2001/2002 school year. It would be about $38,000 this year for Sen. Santorum’s five kids old enough to attend school.²

Sen. Santorum could probably have handled this better, but our representatives are placed in a tough position. Should a representative have to live away from his family? Sen. Santorum maintained a house in the Penn Hills school district, paid property taxes on the house, and paid the PA income tax. He moved his family to a Washington, DC, suburb so they would not be separated most of the year. This meant his kids did not meet the school district’s residency requirements to have the district contribute to their tuition for Western Pennsylvania Cyber Charter School in Midland. Five of Santorum’s eight kids were enrolled at the school.² He clearly wasn’t trying to cheat anyone because he paid the same PA and school district taxes he would have if he resided in PA.

1. Social Security Tax May Mean More Money; Laura Meckler; Associated Press; February 18, 2005.

2. Taxes pay Santorums’ tuition costs; Vera Miller; Pittsburgh Tribune-Review; November 6, 2004.