The FICA tax that supports the Social Security trust funds has been reduced from 6.2% to 4.2% for the past year as a means of stimulating the economy. The difference has been made up by general revenues. President Obama has proposed that the reduction be continued for another year. The number two Republican in the Senate, Jon Kyl, has expressed opposition to the President's proposal saying that the tax cut did not stimulate the economy. His opposition apparently stems from another part of the President's proposal that would pay for the one year extension of the tax cut by increasing taxes on those with incomes over $1 million. Kyl believes that tax increase would undermine the economic recovery.
I would prefer that the FICA tax revert to 6.2%. Delinking the trust funds from payroll taxes has to be bad for Social Security in the long run. However, if you were trying to caricature Republican positions you could not do better than what Senator Kyl is saying: A tax increase for ordinary Americans is of no consequence for the economy while a tax increase on the wealthiest Americans would be terrible for the economy.
As a small business owner I have no problem reverting to the 6.2% rate. The increase in paychecks was about $13.00 per check. Never enough to do ay stimulating. Big deal. I'd rather the money go into the non existent trust fund at a time when SSA is going broke.
ReplyDeleteBut Charles, certainly you agree that we don't have a tax problem in Washington, we have a spending problem. Raising taxes on "the rich" doesn't fix the spending stupidity. Or maybe you want more shrimp treadmills.
It's both a tax and a spending problem. Let the rich pay their fair share, don't put it all on federal employees. Our pay is frozen for two years and we are already making less than private industry positions for the same job.
ReplyDeleteSurprise surprise. Republicans love wealthy americans.
ReplyDeleteSigned,
I'm disabled NOT retarded.
The question is, though, if a society in which the top 1 percent already pay nearly 40 percent of the nation's income taxes (and when combined, the top 10 percent pay nearly 70 percent), then what would it take for liberals to be satisfied that the rich are paying their fair share?
ReplyDeleteI understand that the 2% reduction is made up from general revenues.
ReplyDeleteThis is the same way trust fund "assets" are liquidated.
Everything comes out of the Treasury's general fund, whether it is Social Security or battleships.
We're just one, gigantic happy family.
Don Levit
"A tax increase for ordinary Americans is of no consequence for the economy while a tax increase on the wealthiest Americans would be terrible for the economy."
ReplyDeleteYes, because as was stated above the $13.00 extra dollars in a worker's paycheck doesn't stimulate the economy, but slapping extra taxes on people that are already paying a large amount of taxes, that in most cases are the people that might hire a new employee, does hurt the economy.
Face it the party is over, if you took every penny of all the million and billioniares in the country, it would not get us out of the hole Bush, Obama and Congress have spent us into.
Republicans are so funny. They'll argue on the one hand that going back to Clinton-era income tax rates would amount to just a drop in the bucket, and so isn't even worth considering if we're serious about reducing the deficit.
ReplyDeleteThen, with a straight face, they'll argue that any increase in taxes for the wealthy would be catastrophic for the economy because of all that job-creation money crumbling into dust. Funny. Haha!
The FICA tax reduction was a trap, and I knew it when it was proposed. It would inevitably have to be raised back up, and Republicans would have to agree, suckering them into supporting a tax increase. That is why all the hopey changey stuff was such nonsense. Obama played the Republicans for fools, because he is from the Chicago machine, which cranks out al the old cynical, manipulative crud that it can to do the one thing it does best--retain power. That's why the OWS folks are the biggest dopes of all--they think this stuff will really change if they raise a big enough stink--they're just more fodder for the voting booth before the Dems pat them on the head and shunt them aside.
ReplyDeleteThese comments sure do show the division in this country.
ReplyDeleteLatest news today--O now wants the FICA cut increased to 3 percent, and is challenging the Republicans to go along with this. This guy is totally out of copntrol, and we will be lucky just to survive another 14 months of this kind of cr@p. The arrogance and condescension in his tone is maddening. He's just sooo much smarter than the rest of us peons. It has to be someone else's fault always that his policies have failed.
ReplyDelete