There is an article, linked on DrudgeReport today, that says some Social Security advocates fear a cut in the payroll tax. Obama recently proposed cutting the payroll tax for Social Security from 6.2% to 4.2% for one year. It can be assumed that this would just be the employee's share of the tax and not the employer's.
This is a joke. Social Security is a Ponzi scheme. Not only that, but any additional tax collections that should have been saved have been spent. There is a Social Security trust fund that is filled with IOUs. The federal government basically owes itself this money. It really doesn't make a difference at this point. The taxes collected for Social Security have been mixed with the general fund for decades. The Social Security surplus money of the past has been spent. Now that it is in deficit, it will be the general fund that makes up the difference. We can't say whether it is federal income taxes, excise taxes, corporate taxes, or money printing that will fund the shortfall in Social Security. All of this money is mixed together.
This is what allowed Clinton to declare a surplus in the late 1990s. This was a lie. The payout for Social Security was less than what was collected at that time. This money should have gone to the Social Security trust fund. Instead, part of the money was spent and the remainder was used to proclaim a surplus.
Now Social Security is in the red as the payouts are greater than the tax collections. It isn't an insurance program and it never has been. It is broke and there is no way the government will be able to keep all of its promises. There is going to be a default eventually. The question is whether it will be a default through inflation or outright default. I think it will be a combination. Either way, the whole system is in jeopardy. It will be painful for many, especially those who are highly dependent on the government. But the laws of economics have caught up with the system. It will go bust and will be cut back severely. Long-term, this should be a good thing.
From a personal standpoint, support any cut in taxes that you can, even if it is the payroll tax. The government is going bust anyway. We might as well get what money we can now. The environment continues to point to high future inflation. We should use any tax cut to increase our positions in hard assets that will hold their value with high inflation. Take what you can get while it is still there.