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The Greatest Injustice In America

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By WILL GRAVES

Published: January 14, 2008

Nothing clarifies an issue like $57 billion.

And when an individual worth that kind of money gets up on a soapbox, as Warren Buffett did, and tells Congress that he and his fellow net worth individuals enjoy a lower tax rate than their company receptionists, a national debate ensues. The watercooler buzz has yet to die down.

There is no greater financial injustice in the United States than the gross inequity found in our 1935 pension plan known as Social Security. Consider the following: A taxpayer earning $30,000 a year is fully taxed under Social Security. No exemptions. A taxpayer earning $300,000 a year is able to shield most of his or her income from Social Security tax. All but $97,500 to be exact. That's a national outrage.

Recently, the United Autoworkers agreed to set up trust funds that allowed U.S. automakers to unload their healthcare obligations for cents on the dollar. It was a matter of survival for the U.S. auto industry.

Certainly, no one could fault autoworkers for accepting health care benefits that exceeded those enjoyed by the president of the United States. But economic realities have dismantled the benefits entitlement culture that took root following World War ll.

So far, the Social Security system has been immune to economic realities due to deep-pocketed special interests. And the plight of the $30,000-a-year taxpayer isn't even being heard. The effect is taxation without representation.

Warren Buffett could help settle an age-old argument that has always differentiated Democrats from Republicans. Republicans have always felt that Democrats skipped Economics 101.

If Buffett will use his "bully pulpit" to help change the Social Security tax system to enable the $30,000-a-year taxpayer to exempt all but $9,750 of his or her income for a five-year test period, a healing process would begin. The "have-nots" would have a seat at the table with the "haves."

Republican dogma states that the six-figure earners are more likely to be employers and, as such, need tax breaks to hire the "have-nots" and stimulate the economy. "Have-nots" usually don't employ, tend to be employees and, as such, wouldn't make good use of a tax break.

Regardless of the side to which you ascribe, there's a question of equality. A question of justice. Yes, $300,000-a-year earners tend to work longer and harder and take more risk. No, they shouldn't be able to exempt most of their income from Social Security, especially when the $30,000-a-year earners are literally paying part of their tax bill for them!

At the end of five years, let's see whether the $30,000 a year earners help grow the economy and invest some of their Social Security exempt tax savings in the stock market to improve their lives over time.

Buffett would be uniquely qualified to invest their tax savings for them. And, as the world's greatest investor, he could safely trounce the pathetic Social Security returns many times over. Even Al Gore would feel safe.

And the late Daniel Patrick Moynihan, who railed against his fellow Democrats for living on stock trust funds while not allowing the "have-nots" the same privilege, would applaud.

Will Graves, chairman emeritus of Graves' Quality Chrysler, lives in Winter Park.

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