Proposals to ease the Social Security payroll tax burden on workers are picking up new support in Congress, spurred by heavy complaints from the public.
Although massive new payroll taxes just voted by Congress have not gone into effect, smaller ones scheduled under previous law took effect Jan. 1 and are producing heavy mail from constituents.
As a result, lawmakers are beginning to take another look at proposals to fund part of the Social Security system from Treasury general revenues instead of the payroll tax which falls most heavily on low-income workers.
Treasury general revenues, by contrast, are raised from progressive income taxes and from corporate taxes and therefore fall more heavily on the well-to-do.
Tomorrow, Senate Social Security Subcommittee Chairman Gaylord Nelson (D-Wis.), Sen. John C. Danforth (R-Mo.) and House Ways and Means Committee members Abner J. Mikva (D-Ill.), William M. Brodhead (D-Mich.) and Richard A. Gephardt (D-Mo.) will introduce a bill to fund the entire Social Security disability and health insurance programs from general revenues, leaving the payroll tax to support old age and survivor insurance only.
This would mean the tax rate for an employe in 1979 would be only 4.3 per cent instead of the 6.13 per cent scheduled under current law. It would go to 4.4 per cent in 1981 and stay there for a number of years, instead of rising to 7.15 per cent by 1986.
Under current law, a person with a $10,000 annual salary is parying $605 this year for Social Security, but would go to $715 in 1987. Under the Nelson proposal he or she would go down to $430 next year and still be only at $440 in 1987.
Higher paid workers would save even more. Under current law a $40,000-a-year worker would be paying $1,404 in Social Security taxes in 1979 and $2,860 in 1987, but only $992 and $1,1760 in those years under the Nelson plan.
House Social Security Subcommittee chairman James A. Burke (D-Mass.), meanwhile, is reintroducing his longstanding proposal to fund the entire Social Security system by paying one-third the costs from general revenues, one third from employer payroll taxes and one-third from employe payroll taxes.