A new USA Today/Gallup poll on Social Security reform has been served up this week to bolster the belief that the future financial soundness of the pension system can be assured by eliminating the current cap on the amount of a given person's income that can be taxed.
This serves as a vivid example of how the wording of survey questions can steer the answers in a given direction.
Based on a graph of the poll published in USA Today, it appears Gallup asked if respondents would favor or oppose legislation that would "require higher income workers to pay Social Security on all of their wages."
It shouldn't shock anyone that nearly 67 percent favored the idea. Further, virtually the same percentage said they would favor placing a limit on the Social Security benefits that "wealthy retirees" receive.
Gallup's question presupposed that most Americans are knowledgeable about the structural details of the Social Security system. They aren't, of course.
All workers pay the same Social Security tax rate on their incomes up to $90,000. They pay nothing on earnings over that amount. Employers must match one half of the amount of tax the employee pays.
Few Americans know this. So Gallup's phrasing of the poll question may have left many respondents with the mistaken impression that "higher income" workers somehow escape paying their fair share of Social Security taxes.
This isn't to say that a general tax-the-rich sentiment -- always popular with the voters -- didn't play a big part in the poll's finding. Still, given the complexities of Social Security and any efforts to reform it, the survey would have been truer to the mark if it had asked questions with wordings that more accurately represented the differences between the current system and the proposed new one.
Consider how many American small businesses are owned and operated by men and women who earn, say, between $150,000 and $200,000 a year. They have undertaken great risk in being entrepreneurs, and in creating jobs and buying goods and services that invigorate the U.S. economy.
Under the Social Security reform suggested in the Gallup poll question, these good folks would suddenly find themselves paying somewhere between $7,444 and $13,640 more in taxes, depending on where along the $150K-$200K line they fall.
The above salaries may sound dazzlingly high to many people. But the prospect of making that kind of money is the incentive designed to entice capable Americans into creating the lesser-paying jobs that many of us take for granted.
Given such a reform measure, who in their right mind would ever again want to
take on the hassles and headaches of owning or running a small business? Where's the reward for risk and hard work?
Employees on the verge of getting a high-level promotion would also be penalized by a Social Security tax on salaries over $90,000. The company would likely pass them over because it wouldn't want to have to match the additional tax the employee would have to pay.
More ridiculous still is the notion that no matter how much more a high wage earner might pay into the Social Security system than a low wage earner would, the wealthier worker upon retirement would receive either the same or fewer benefits than his more modestly employed counterpart.
The USA Today story that accompanied the poll used pro golfer Tiger Woods as an example. It noted that Woods reportedly earned about $80 million last year. Under this soak-the-rich reform plan, he would pay over $10 million in Social Security taxes, but his benefits would be cut! The article went on to proclaim that such an approach would help keep Social Security solvent and even thriving.
Here are a few follow-up questions that might be fitting for those who support this kind of reform:
Q. Do you work for a business that employs fewer than 200 people?
Q. If so, do you think the poor soul who had to borrow the money and start the business would ever have done so if they had known their reward for success would be an additional huge Social Security tax bill and fewer Social Security benefits for their own retirement?
Q. If your answer to the above is "No," then where do you plan to find your next job?
I'm sure it's clear that I would never have our firm poll this illogical reform idea with such pointed and leading questions. But I wouldn't have polled it the way Gallup did either.
Let's hope our elected leaders are smart enough to ignore this absurd proposal. If passed, it would destroy all of the economic benefits to the United States that the tax cuts of the '80s, '90s and early 2000s helped to create.