The Really Unfair Tax

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REX RYSTEDT FOR TIME

If the double tax on Social Security were eliminated, Michael Kasprzak and Betty Williams would save $1600

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Would there be any support in President Bush's inner circle for ending Social Security's double tax? Six years ago, several members of Congress took note of the inequity. That April, a Missouri lawmaker introduced legislation, called the Working Americans Wage Restoration Act, to make Social Security taxes deductible from income. To the sponsors it seemed only fair, since contributions to IRAs and 401(k) plans are deductible. And corporations deduct the portion of Social Security taxes they pay their employees. Calculating that his bill would save the average two-earner family $1,227 in income tax, the lawmaker said, "Ending this unfair double taxation is an excellent way to affirm the value of work, provide tax relief to those who deserve it most and stimulate economic growth. For nearly 73% of American families, payroll taxes exceed income taxes. It is middle-income Americans who are hammered the hardest by the double taxation of payroll taxes."

The legislator? None other than John Ashcroft, then a Senator and now President Bush's Attorney General.

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