President Clinton proposes to increase the tax on Social Security benefits. Although the administration calls this an "entitlement spending reduction," what it proposes is a tax that will fall primarily on elderly investment income. The remainder of the burden will fall on the wages of elderly workers. If passed into law, the proposal would cause marginal tax rates faced by the middle-income elderly to reach a record high, resulting in less capital H and labor, a slower rate of economic growth and a lower income for all Americans.
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