I hear this a lot: “Well, that sounds reasonable!” It isn’t, and you should read this so you can influence others not to support it:
In Washington-speak, “means-testing” is a scheme to deny or reduce Medicare and Social Security benefits for people who are “too wealthy” in the name of saving money. It’s a counterproductive, harmful idea, but one that well-intentioned liberals often end up embracing.
It’s easy to see why. Economic inequality has exploded to dangerous levels, and the argument for means-testing seems to appeal to a powerful sense that the rich are getting more than their fair share at the expense of everyone else. Combine this with the deficit hysteria promoted by conservatives, and the trap is set.
Don’t fall into it. The truth is that means-testing is a sneak attack on vital programs meant to weaken and eventually destroy them. There’s a reason why an ultra-conservative like Paul Ryan pushed means-testing during the presidential campaign. And there’s a reason why private equity billionaire Pete Peterson, enemy of Social Security and Medicare who served in Richard Nixon’s cabinet, makes a special point of bringing up means-testing [3] when he is talking to liberals.
Conservatives push means-testing because it’s a highly effective political strategy for getting liberals and progressives to act against their own values and interests — so effective that some economists billing themselves as liberal, such as Jared Bernstein, a former adviser to the Obama administration, sometimes promote means-testing as a reasonable idea. Bernstein recently went on CNBC [4] and said that means-testing “sounded like a good idea” and characterized people opposed to it as “fringe.”
Bernstein’s assertion that means-testing opponents are “fringe” is nonsense. Does that include Paul Krugman of the New York Times, who describes [5] means-testing as “an even worse idea, on pure policy grounds, than even most liberals realize”? In researching this article, I communicated with several highly respected economists, including Nobel Prize-winner Joseph Stiglitz, James K. Galbraith, Dean Baker, and Thomas Ferguson. All of them expressed their concerns about means-testing and provided a variety of sound arguments against it. (Bernstein, after being roundly criticized, backtracked in a blog [6] and admitted that means-testing is a bad policy idea and a questionable way to address income inequality. He just forgot that when he was on TV!)
Here are six reasons why you should be on high alert any time you hear the phrase “means-testing” — whether it comes from government-hating conservatives or liberals who wish to appear “moderate.” The truth is that there is nothing moderate or reasonable about means-testing – or any other plan to weaken Social Security and Medicare.
Go on, go read the rest.
Means-testing drills holes in a system that is meant to cover everyone. Rich and poor. If the Republicans are so concerned about “fairness” then they should propose legislation that raises the contribution ceiling to infinity. It now cuts off at $113,000. Then offer additional legislation that taxes the income, earned and unearned, of the top 20% at a much higher rate. Say 74%. With NO deductions. Which is where the rate stood before Reagan began his scorched-earth policy of destroying all of the New Deal legislation. To hell with the Republicans and their ideological bedfellows the Libertarians and the T-baggers.
Every time this is brought up, the counter talking point should be: We’re for means-testing income tax. There is no reason why individuals and corporations should be able to shift their tax burdens on to ordinary Americans when they already rake in billions in taxpayer subsidies.
Well, actually, to good Corporatist Dems Paul Krugman and the other economists listed are indeed “fringe.”