Cutting Social Security Tax by 2%

Lee Iacocca’s particularly fine column (“FICA Tax Reprieve Can Jump-Start Economy,” Commentary, Dec. 23) most appropriately points out that a 2% cut in the current Social Security tax, by adding $100 billion to our economy, would immediately contribute to a rapid recovery from the current recession.

His proposal, initially introduced quite some time ago by Sen. Daniel Patrick Moynihan (D-N.Y.), merits strong support by both the Democratic congressional majority and the Republican Administration.

The current regressive tax structure, resulting from the excessive 15.3% tax of the first $53,400 of earned income (although half paid by the employer on a deductible cost basis) when added as a percentage of earned income to health benefits and other payroll costs plus the regressive 8 1/4% sales tax, curtails significantly the purchasing power of productive labor as well as our ability to favorably compete in foreign markets.

Recessions are generated by underconsumption rather than overproduction. Curtailing production facilities, rather than stimulating distribution and consumption, will neither alleviate the recession nor, in the long run, provide additional profits for an appropriate basis for required increased tax revenue.

IRVING M. ROBBINS

North Hollywood