Want to cure millennials' financial woes? Reform the payroll tax.

Sharon McCutcheon / Unsplash

In early June, the Social Security and Medicare trustees released their annual report on the fiscal health of these programs, and the situation looks dire. Medicare is scheduled to run out of money in 2026 (three years sooner than anticipated), while Social Security is expected to run out in 2034. The rising national debt is only one of the well-known financial struggles the millennial generation faces. The burdens of student loan debt, high housing prices (thanks to zoning restrictions), stagnant wage growth, the rising cost of healthcare and lingering aftershocks of the Great Recession are among the biggest sources of economic anxiety millennials feel.

Progressive politicians have been very successful at courting the youth vote, partly because they actually promote policy ideas that address many of these concerns. As unrealistic or counterproductive as Senator Bernie Sanders' proposals for single-payer health care or a $15 an hour minimum wage might be, they feel in theory like they would provide the economic stability and prosperity millennials want.

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Republicans, on the other hand, have struggled to craft a message to address these concerns. Fiscal conservatives recognize, correctly, that the burden of the $20 trillion national debt and over $200 trillion in unfunded liabilities will fall on millennials. Some conservatives have even written books about that fact. But the need to reform entitlements hasn't exactly caught millennials' attention. Pollster Kristen Soltis Anderson, in her book The Selfie Vote, notes that millennials generally view protecting the safety net as more important than reducing the deficit.

Clearly, Republicans have a problem. They need to craft solutions that address the millennial generation's struggles, but they can't seem to sell entitlement reform, their biggest policy preference that addresses those problems. The Republican approach to wooing millennials on policy is failing because talking about stopping the debt from reaching an unsustainable level is long-term and abstract, and offers few immediate tangible benefits. A new approach to both pave the way for entitlement reform and give millennials an immediate financial boost is to first reform not entitlement spending, but the payroll tax: specifically, by partially (or wholly) replacing it with a value-added tax.

Under the current Social Security model, workers pay for the benefits of current retirees through the payroll tax. This system creates the illusion of a pension program, in which what you put in is what you get out, but in reality Social Security is a universal safety net program for the elderly paid for by taxes. The payroll tax falls on workers and is a tax on labor, while the value-added tax (VAT) is a tax on consumption imposed at every part of the production process. Assuming that this policy change is revenue-neutral, switching to a VAT will shift the responsibility for funding Social Security and Medicare away from workers, disproportionately poorer and younger, and onto everyone participating in the economy as a whole. Furthermore, uncoupling Social Security funding from payroll taxes would pave the way for fiscal reforms to transform the program from a universal benefit program to one geared specifically to eliminating old-age poverty, such as means-testing benefits for high-income beneficiaries, indexing benefits to prices rather than wages or changing the retirement age.

Switching from the payroll tax to the VAT would address both conservative and liberal tax policy preferences.

Switching from the payroll tax to the VAT would address both conservative and liberal tax policy preferences. As the Tax Policy Center notes, the change would actually make the tax system more progressive. The current payroll tax is regressive, meaning that people with lower incomes tend to pay a higher effective tax rate than people with higher incomes. On the other hand, the value-added tax is much closer to proportional than the payroll tax, meaning that each income group pays closer to the same effective tax rate.

For Republicans, such a change would fit conservative economic ideas about the long-run causes of economic growth. A value-added tax has a much broader base than the payroll tax, and therefore would allow for much lower marginal tax rates, and lower marginal tax rates mean smaller disincentives to economic activity. According to the Tax Foundation's analysis of a value-added tax, the VAT would be a more economically efficient revenue source than most other taxes currently in the tax code.

Not only would replacing part or all of the payroll tax provide an immediate benefit to millennial taxpayers, it would also open the door for the much-needed entitlement reforms that have been so politically elusive. Furthermore, it would make the tax code both more pro-growth and less regressive. In order to even begin to address the entitlement crisis, win millennial support and stimulate the economy in a fiscally responsible manner, Republicans must propose moving from the payroll tax to the VAT.

Alex Muresianu is a Young Voices Advocate. His writing has appeared in Townhall and The Federalist. He is a federal policy intern at the Tax Foundation. Opinions expressed here are his only and not the views of the Tax Foundation. He can be found on Twitter @ahardtospell.

The great beyond. What does it hide from us? Do unknown lifeforms linger in the dark? In other words, was David Bowie right? Is there life on Mars? The head of Harvard University's Astronomy Department contends that, yes, there is. Well, not that there's life on Mars. I'll explain in just a minute.

In an academic article for the Astrophysical Journal Letters, Dr. Avi Loeb, the head of Harvard University's Astronomy Department, claimed that an alien probe entered our solar system. He claimed that it is masked as the space rock Oumuamua (Ow-moo-ah-moo-ah), "the first interstellar object to enter our solar system." It turns out that "space rock" is way more than a musical genre.

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In his own words:

Considering an artificial origin, one possibility is that 'Oumuamua is a lightsail, floating in interstellar space as a debris from an advanced technological equipment.

His evidence? pointed to the space rock's abnormal acceleration, activity which he gathered via the Hubble Space Telescope.

He added that "the lightsail technology might be abundantly used for transportation of cargo between planets."

Sounds a bit like Star Wars, no? Or are you more of a Star Trek fan? Either way, it's an odd thing to hear from the head of Harvard University's Astronomy Department. Typically, we hear these sorts of things from the darker corners of the History Channel.

Well, I'll say that, at this point, I'm not really surprised. It's 2019. I'm not surprised by anything anymore.

"I don't care what people say," Loeb said. "It doesn't matter to me. I say what I think, and if the broad public takes an interest in what I say, that's a welcome result as far as I'm concerned, but an indirect result. Science isn't like politics: It is not based on popularity polls."

Honestly, I believe the guy. Well, I'll say that, at this point, I'm not really surprised. It's 2019. I'm not surprised by anything anymore. Heck, I welcome alien lifeforms. Maybe they can give us some advice on how to get our world together.

The third annual Women's March is approaching, and the movement has shown signs of strife. It's imploding, really. An article in Tablet Magazine revealed deep-seated antisemitism among the co-chairs of the movement, which is funny for a movement that brands itself as a haven of "intersectionality." The examples pile up, and just yesterday there was another. I'll tell you about it in a minute.

The Women's March has been imploding, and it started at the very top. Four women have come to represent the diverse face of the movement, the co-chairs: Tamika Mallory, Carmen Perez, Linda Sarsour, and Bob Bland.

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Increasingly, we've learned that anti-Semitism is common among these women.

Teresa Shook, who founded the Women's March has repeatedly asked them to step down: The co-chairs "have steered the Movement away from its true course. I have waited, hoping they would right the ship," Shook wrote. "But they have not. In opposition to our Unity Principles, they have allowed anti-Semitism, anti-LBGTQIA sentiment and hateful, racist rhetoric to become a part of the platform by their refusal to separate themselves from groups that espouse these racist, hateful beliefs."

Tamika Mallory gave us the latest example, by continuing to stand by Louis Farrakhan. Check out Tamika's arrogant, nonsensical response. But the real problem came at the end of Mallory's rambling non-answer.



Women's March Leader Tamika Mallory Doubles Down On Love For Louis Farrakhan youtu.be


Later this week I'll go over the entire controversy on Glenn TV. It's harrowing, really. For now, I'll leave you with this. Critics of 4th wave feminism have argued that the radical identity politics of the left will lead to the exact kind of mistreatment that feminists claim to be against. That argument has been written off as using the slippery slope fallacy. But, as we see with the Women's March, it is in fact a brutal reality.

Remember how serious Chuck Schumer and Nancy Pelosi were last week, when they gave their "rebuttal" to President Trump's address? They made it seem like this government shutdown is apocalyptic. A lot of Democrats have done the same. On social media and CNN at least. Thirty Democrats, however, took a different route. Puerto Rico. For cocktails at the beach.

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A group of 30 Democrats have turned the government shutdown into a live-action interpretation of a Jimmy Buffet song:

Nibblin' on sponge cake, Watchin' the sun bake.

No, seriously. In the words of Press Secretary Sarah Sanders:

Democrats in Congress are so alarmed about federal workers not getting paid they're partying on the beach instead of negotiating a compromise to reopen the government and secure the border.

A photo of New Jersey Senator Bob Menendez at a resort beach has gone viral.

They arrived via chartered jet. They're staying at a seaside resort, and attended the ridiculously-priced and overhyped play "Hamilton," where tickets for opening night "ranged from $10 to $5,000," according to the Associated Press. They even attended several afterparties.

Of course, the official occasion seems legit. They're in San Juan for the Congressional Hispanic Caucus BOLD PAC. According to a memo for the gathering:

This year's winter retreat promises to be our most widely attended yet with over 220 guests, including 39 Members of Congress and CHC BOLD PAC supporters expected to attend and participate!

Also in attendance, about 109 lobbyists, from a number of places, including "R.J. Reynolds, Facebook, Comcast, Amazon, PhRMA, Microsoft, Intel, Verizon, and unions like the National Education Association."

Donald Jr. said it well:

And of course no one says anything. I'm not even in government and I'd get killed in the press if I was on vacation right now. Why won't they cover their democrat buddies lobbyist sponsored vacation in the islands???

Maduro takes office and Venezuelans vote with their feet

CRIS BOURONCLE/AFP/Getty Images

Venezuela continues to collapse. A country that used to have the world's largest oil reserves is now in rags. Its money is worthless, with inflation near one million percent. People must work an average of five days at minimum wage just to afford a dozen eggs. But there is one person still pumped about Venezuela's future – its noble president, Nicolas Maduro! I'll tell you why he's still enthusiastic in just a minute…

Venezuelan president Nicolas Maduro had a stellar 2018. Here are some highlights:

  • Running water and electricity only work occasionally and prices for basic goods doubled.
  • Doctors, engineers, oil workers, and electricians fled the country en masse. Over 48,000 teachers also left the country.
  • Over half a million Venezuelans fled to Peru alone.

Maduro created a new digital currency called the "petro." One petro is supposed to equal the price of a barrel of oil, about $60. U.S. Treasury Department officials call the petro a scam. Who could've seen that coming?

Maduro also announced a 3,000 percent minimum-wage hike. Even Ocasio-Cortez might roll her eyes at that one. Or find it inspiring.

And just yesterday, a Human Rights Watch report detailed how Venezuelan intelligence and security forces are arresting and torturing military personnel and their family members who are accused of plotting against Maduro. The torture includes: "brutal beatings, asphyxiation, cutting soles of their feet with a razor blade, electric shocks, food deprivation, [and] forbidding them to go to the bathroom."

It's so bad in Venezuela that even The Washington Post admits Venezuela's problems are mostly due to "failed socialist policies." But President Nicolas Maduro gave a televised New Year's address calling 2019, "the year of new beginnings." He's pumped, you see, because today he will be sworn in for his second six-year term as president. He was "re-elected" last May in an election that the international community declared illegitimate.

Thirteen nations released a statement last week urging Maduro not to take office and saying they would not recognize his presidency.

Maduro doesn't have many friends left at home or abroad. Thirteen nations released a statement last week urging Maduro not to take office and saying they would not recognize his presidency. This week, the U.S. added more Venezuelan officials to its sanctions list.

In a press conference yesterday, Maduro said:

There's a coup against me, led by Washington. I tell our civilians and our military to be ready. Our people will respond.

I think the people of Venezuela who have the means are already responding – by leaving.