ThinkProgress filed this report from a townhall in Racine, Wisconsin
House Budget Committee Chairman Paul Ryan (R) faced questions on numerous issues from townhall attendees in Racine today, but his most ardent challenges came from constituents urging him to raise taxes on the wealthy and corporations.
One of the tax issues involved Social Security, which is paid for by a payroll tax that is levied on yearly wages up to $106,800. One constituent stood and asked why he pays the payroll tax on everything that he earns, but New York Yankees third basemen Alex Rodriguez — who made $32 million in 2011 — is only taxed on his first $106,000. “Why can’t you take the cap off” the payroll tax, the man asked.
Ryan responded by saying that he is “not unsympathetic to that idea,” but then proceeded to mislead the crowd, telling it that raising the Social Security payroll tax cap wouldn’t dramatically extend the program’s lifespan:
ATTENDEE: Last year i worked 52 weeks out of the year trying to support my family. They took Social Security and Medicare out of every one of my paychecks. What I don’t understand is why a baseball player for the New York Yankees can make $22 million a year and they only take a little bit out of his first paycheck. Why can’t you take the cap off of Social Security?
RYAN: I am not unsympathetic at all to that idea. Here’s the one issue that raises concern in my mind. If it’s just the guy who’s making that kind of a salary, that’s one thing. But the problem is it’s a self-employed tax as well. […] When you run the numbers…it gets you about six years of solvency in a 75-year problem. The problem is it doesn’t get you that much savings. I think the better way to go to get savings in Social Security is to stop subsidizing the rich. … If you could just do the salaried person and not get the self-employed person, that’d be one thing, but it wouldn’t be that much money at the end of the day.
Ryan’s numbers, while popular among Republicans, are wrong. According to the Congressional Research Service, eliminating the tax cap would create a surplus for the program while ensuring its solvency for another 75 years, not six, as Ryan claimed.
Unfortunately, Republican intransigence when it comes to any tax increase prevents lawmakers from shoring up the program’s future, even while multimillionaires like Rodriguez continue to have an extremely low percentage of their income covered by the payroll tax.