has been running a series by John Ydstie on Social Security reform all week. On Friday they had questions from listeners.
In response to a question about fixing the system by lifting the cap on Social Security taxes, Kent Smetters, an Associate Professor at the Wharton School of the University of Pennsylvania who worked on President Bush's Social Security commission made the claim that doing that would have a major impact on small businesses which supply the majority of jobs in the US.
I have no idea what experience he has had in the small business sector, or even how he defines it, but as a small business owner let me enlighten Kent: raising the cap wouldn't even be noticed.
For a small business owner a forty-hour week is a vacation, because you never get an actual vacation. You are the last person paid and the first to take a cut. You don't take any more out of the business than is absolutely necessary to pay your personal expenses. Your business is the be all, end all of your existence, your asset, your retirement plan, everything. If a small business owner is able to take a salary above $100,000/year, he or she is getting ready to sell the business.