2/21/2005 09:28:00 AM|||Toni|||I know to most people Social Security is the ultimate in boring but the ramifications to the economy are significant, especially to small business. Interesting commentary by Kudlow on Bush's comment about raising the salary cap for Social Security:

Wall Street economist Michael Darda has also turned in some startling numbers. Eliminating the $90,000 ceiling on payroll taxes would boost the top marginal income-tax rate to 47.6 percent from 35 percent. Darda estimates that after-tax returns on marginal work effort would fall from 65 cents to 52.4 cents on the extra dollar earned, a 20 percent decline.

Ironically, Harvard’s Feldstein argued that hiking the wage cap would create a dead-weight loss on the economy and would lead to significant tax evasion by small-business owners who have chartered as S-Corps or LLCs. Consequently, the net revenue gain from a wage-cap increase might be only $14 billion if the cap were hiked to $110,000. While damaging the economy in terms of rolling back incentives to work, this small revenue yield would do virtually nothing to solve the pending Social Security financial problem.

Is it just because of the battle of the 'classes' (poor vs rich) that people are always wanting to raise the salary cap? To me, demographics show what should be changed is the age qualifiers along with the add-ons to Social Security outside of retirees.|||110899971640505983|||Bush’s mad cap idea