For most of last year and so far into this one, the media has passed along the narrative that Social Security is a major cause of the nation’s deficit and it, along with other entitlements like Medicare and Medicaid, needs a good hair cut. The president’s now-defunct deficit commission and assorted deficit hawks peddled that notion so vigorously that it has now become conventional wisdom. And this week major MSM outlets have pounded the drum once more.
On Marketplace, after commenting that the president’s 2,500 page budget explanation is “kind of a big yawn,” host Kai Ryssdal turned the program over to John Dimsdale, who noted that the budget freezes domestic spending for five years, cuts help for the poor to pay for heat, and raises interest on student loans. Then he lamented that “there’s no fix in this budget for the big deficit generators like Medicare, Social Security or tax loopholes.” At another spot in the segment, he said Obama’s budget director Jack Lew was asked “why the budget doesn’t reflect some of the dramatic entitlement and tax reforms recommended by the president’s deficit commission.”
“Deficit generator.” “Dramatic entitlement reforms.” With that kind of language, can you blame the public for thinking Social Security is a big problem?
On the same day, NPR weighed in again on the deficit’s causes, with host Rebecca Roberts and NPR’s Washington senior editor Ron Elving doing the chatting this time on Talk of the Nation. A caller asked where the federal government got the authority to promise all this money and “create this budget deficit and then leave it to somebody else to clean up up.” Elving gave a brief history lesson about FDR and the creation of Social Security, and LBJ and the origin of Medicare, and how the government willingly assumed these obligations supported by the aforementioned presidents. “Those programs were popular and remain enormously popular today,” Elving replied. “People don’t want to see them cut. And yet those are the programs with the costs, along with defense, Medicaid and a few other things, that are driving this deficit.” Driving this deficit? How can you miss the point?
The New York Times got into the swing of it, too, with a piece by Jackie Calmes. In the fourth graph of her story, she wrote:
Neither party has put forward specific proposals to begin grappling with the most pressing long-term budget problem: the huge costs in Medicare, Medicaid and Social Security programs as the population ages and medical costs rise, a bill that could overwhelm the government and crimp the economy if not addressed.
But there was another view of the problem expressed this week—by politicos, no less.
First, there was the president’s budget narrative —the “yawn,” in the parlance of Marketplace. It says:
Although Social Security does not face an immediate crisis and is not driving our short-term deficits or long-term debt, it does face a long-term financing shortfall.
Yes, it does, and experts of all stripes have suggested various fixes. The president, for his part, has not displayed his cards, simply suggesting six principles which are laid out in the budget message. That sounds like what he did on health care, too.
The president also repeated that point at his budget press conference when Ben Feller of the AP asked: “Your plan does not address the long-term crushing costs of Social Security, Medicare, Medicaid—the real drivers of long-term debt. Can you explain that?” The president explained: “The truth is that Social Security is not the huge contributor to the debt that the other two entitlements are.”
Then it was Wisconsin congressman Paul Ryan’s turn, and he said pretty much the same thing. Paul Ryan, the hawkish, influential chair of the House Budget Committee? In an interview with Politico, Ryan said, with a bit of garble:
Social Security is a big part of the problem of future debt. Now as people know—now Social Security is not a contributor to our deficit of any material right now. Social Security is not a big driver of our debt problems. Medicare and Medicaid are the biggest drivers of our future debt problems.
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See, too: http://reut.rs/e73mnI
http:/NewsCommonsense.com
#1 Posted by Bob Griendling, CJR on Fri 18 Feb 2011 at 01:32 PM
The word "entitlement" has become pejorative even though the concept of honoring agreements is central to most people's perception of fair play. So with all that in mind, how are we to understand the Obama administration when his budget director explained away objections to slashing energy assistance for the poor by using the word "entitlement" in his analysis of a means-tested welfare program? Was the word appropriate? Would its usage be more appropriate if there was a payroll tax designated for home-heating assistance in retirement or unemployment? Did he use that word for the purpose of deflecting criticism by using a buzzword with negative connotations? Or did the context of the question about low-income elderly conflate the issue of retirement funding with home-heating assistance? Interesting that the word "entitlement" jumps out as more negative than "grant program". Also curious about the proportion of elderly among LIHEAP recipients. If the elderly regularly qualify for energy grants in significant numbers, is that an indicator that existing methods for funding retirement are not doing enough of the job?
http://www.democracynow.org/2011/2/15/obamas_37_trillion_budget_calls_for
DONOVAN SLACK: What would the President say to a low-income elderly person in Massachusetts who can’t afford to pay their heating bill? Why are you investing in wireless and not helping her pay her bill?
JACOB LEW: You’re asking why we make a reduction in the Low Income Home Energy Assistance Program. And I have to tell you, this is a very hard cut. This is a cut that has real impact. It’s a program that’s done an enormous amount of good for an enormous number of people. It was never meant to be an entitlement program. It was meant to be a grant program that the states administered. Its funding level has fluctuated based on needs. Balancing our fiscal challenges and the funding change from 2008 to now, we made the tough decision. And, you know, we have said in our documents in the budget that, you know, we will keep our eye on where prices go and what need in the future is, but we can’t just kind of cruise at a historic high spending level when we’re trying to make these very difficult savings.
#2 Posted by MB, CJR on Fri 18 Feb 2011 at 02:05 PM
The coverage of the deficit in general is terrible. John Dickerson at Slate had a great piece on the media not telling the public why, exactly, we should care and why this is bad.
#3 Posted by Elizabeth, CJR on Fri 18 Feb 2011 at 03:59 PM
Very little is wrong with Social Security as it stands. If the well-to-do paid their percentage to double or triple the amount they are now capped at, there wouldn't be any trouble in 17 years. Medicare and its cousins would be best if overseen more closely and the patients received only the care needed, not a number of additional ones to pad some doctor's salary or to assist in raising the profits of PHARMA. But the House isn't looking at any of it that way. They want them both privatized for the benefit of the wealthy that will never need the assistance in the first place. Congress doesn't worry about their costs since they will be covered until the day they die. Then they wonder why their constituents are so upset?? Really dense of them!!!
#4 Posted by trish, CJR on Fri 18 Feb 2011 at 05:24 PM
trish wrote - If the well-to-do paid their percentage to double or triple the amount they are now capped at, there wouldn't be any trouble in 17 years.
Do the "well-to-do" (whoever these people are in they eyes of the people like trish) get double or triple the SS benefits?
The leftist approach to the looming social security collapse (stealing money from the "rich") is so mundane.
#5 Posted by padikiller, CJR on Fri 18 Feb 2011 at 06:31 PM
Maybe it would be mundane if the rich hadn't used the revenue from social security to pay for Reagan's and Bush's tax cuts which were heavily weighted towards the rich.
The people are owed two trillion dollars. It can be paid back in income tax or it can be paid back in payroll tax. As long as it's paid back (not cut through benefit cuts or another age of eligibility increase) then nobody has a problem.
except for medicare and medicaid in which the conservatives are fighting for cost explosions instead of cost reductions. "Let the market
drain every last drop from your walletsolve it!"#6 Posted by Thimbles, CJR on Fri 18 Feb 2011 at 07:19 PM
Only in Lefty LuLu Land is it possible to "pay" for a tax cut.
"Paying" is the transfer of money. It is an exchange of money from one party to another. By definition.
Tax cuts, by definition, involve no such exchange - indeed tax cuts exist solely to prevent payment.
The people are not owed two trillion dollars, by any stretch of the wildest imagination. Indeed, the people instead owe trillions of dollars because, instead of living within their means, the stupid people (through their representative government) borrowed (and continue to borrow at a ridiculous rate) money to buy Chinese televisions, cell phones and computers from the Chinese military/government.
As for this "rich don't pay enough" silliness, the undeniable reality is that the wealthiest 1 percent of Americans already pay 37 percent of the income tax. The wealthiest 10 percent of Americans pay more than two-thirds of all income taxes paid.
So this notion that the "rich" aren't paying a fair share of the taxes is just silly, lefty lunacy; nonsense that is clearly refuted upon the slightest examination of those pesky, yet readily available, little fact-thingies . Not that the facts matter to you guys.
It's not about facts - it's about your screwy, anti-American, anti-free enterprise agenda. You guys won't be happy until every American is issued a gray uniform, a rice ration and a government job.
#7 Posted by padikiller, CJR on Fri 18 Feb 2011 at 07:47 PM
"Only in Lefty LuLu Land is it possible to "pay" for a price cut.
"Paying" is the transfer of money. It is an exchange of money from one party to another. By definition.
Price cuts, by definition, involve no such exchange - indeed price cuts exist solely to prevent payment.
To try and say Walmart needs to account for a price cut before they offer the lowest price... why that's just crazy talk."
Boy, you must have some fine think tanks or fine drugs to come up with this reasoning.
"As for this "rich don't pay enough" silliness, the undeniable reality is that the wealthiest 1 percent of Americans already pay 37 percent of the income tax. The wealthiest 10 percent of Americans pay more than two-thirds of all income taxes paid."
And half of all government revenue comes from the payroll tax which is weighted towards the bottom 90%. It's supposed to pay for social security. If it's not paying for social security then that money is owed. If tax cuts are being given to the rich, they have to be accounted for unless you want massive borrowing to pay for other massive costs. And taxes for the rich are low, historically low.
http://www.msnbc.msn.com/id/3096434/vp/41648574#VpFlash
And you guys won't be happy until every American is living in a third world 1% super-rich, everyone else super poor paradise.
#8 Posted by Thimbles, CJR on Fri 18 Feb 2011 at 10:18 PM
Rat fooey, stupid wrong link above
http://www.msnbc.msn.com/id/21134540/vp/41648574#41648574
#9 Posted by Thimbles, CJR on Fri 18 Feb 2011 at 10:29 PM
Of course there's an interesting parallel between the tax cut created deficit, and how conservatives are trying to rob the middle class to pay for it, and the tax cut created deficits in wisconsin, and how the Koch puppet is trying to rob unions and the middle class to pay for it.
http://tpmdc.talkingpointsmemo.com/2011/02/wisconsin-gov-walker-ginned-up-budget-shortfall-to-undercut-worker-rights.php
http://digbysblog.blogspot.com/2011/02/cheese-and-koch-wisconsin-republicans.html
#10 Posted by Thimbles, CJR on Fri 18 Feb 2011 at 11:00 PM
The Kruggie monster has been busy:
http://www.nytimes.com/2011/02/18/opinion/18krugman.html
#11 Posted by Thimbles, CJR on Fri 18 Feb 2011 at 11:55 PM
The wealthiest 10 percent of Americans pay nearly 70 percent of the income tax.
How much more should these "rich" citizens pay, Thimbles? Wait.. I know the answer... 100 percent.
Snatching other people's money is always the answer with you guys.
Newsflash... The Commie thing just doesn't work out. The free enterprise thing does work out.
Tax cuts don't cost anything. Spending money you don't have costs. Borrowing money from China (a country that figured out - after mass starvation - that the Commie thing doesn't work) costs money.
You liberals are trying to keep an underclass going. You insist upon denying the "poor" the chance to have "skin in the game". To what end? To create a permanent underclass? To eliminate the ability to acquire wealth and property? What's the ultimate goal here?
#12 Posted by padikiller, CJR on Sat 19 Feb 2011 at 11:30 AM
The top income tax rate is 35%. The top 1% tripled their after tax income, the top 25% doubled it:
http://www.cbpp.org/cms/index.cfm?fa=view&id=3220
This has lead to an increased gap between rich and poor, which has lead to an increased percentage of taxes paid by the wealthy while their tax rates have been cut.
http://www.nytimes.com/2007/03/29/business/29tax.html
One more link in a second
#13 Posted by Thimbles, CJR on Sat 19 Feb 2011 at 12:08 PM
"Tax cuts don't cost anything. Spending money you don't have costs."
http://www.cbpp.org/cms/index.cfm?fa=view&id=3036
Nonsense. If I take you out to lunch and pay for your meal, that costs nothing for you and something for me. If the government provides services and stops charging for them, that is a cost. It costs nothing for you, but something for the government.
Please keep in mind that you've repeated this stupid argument a couple of times now and it's starting to bore.
#14 Posted by Thimbles , CJR on Sat 19 Feb 2011 at 12:19 PM
You have to go back pre-depression to find a time when taxes have been lower:
http://en.wikipedia.org/wiki/File:Chart_1.png
#15 Posted by Thimbles, CJR on Sat 19 Feb 2011 at 12:27 PM
"Nonsense. If I take you out to lunch and pay for your meal, that costs nothing for you and something for me. If the government provides services and stops charging for them, that is a cost"
BINGO!.. If you brown bag the lunch, then you don't have the problem! The people keep and spend more of their own money in they way they choose and the economy grows in short order.
Market forces reward innovation, efficiency, fortune, and diligence. Government spending rewards complacency, inefficiency, misfortune and sloth. Which of these demand systems will grow the economy faster? (HINT - It ain't rocket science)
The "cost" of your hypothetical lunch comes from S P E N D I N G money you don't have!. There is no doubt that government spending has gone nuts, especially under the Obama administration.
There is also no question that liberals demand such a mythical free lunch... The problem is that such an animal does not exist here in Reality Land.
You haven't answered my question, by the way, Given that the wealthiest 10 percent of Americans already pay nearly 70 percent of all income taxes.... How much more do you think these "rich" people should be paying? What do you think is fair number?
#16 Posted by padikiller, CJR on Sat 19 Feb 2011 at 01:15 PM
Thimbles wrote: half of all government revenue comes from the payroll tax which is weighted towards the bottom 90%
???????????
How does paying precisely the percentaqe of income make a proportional tax like FICA "weighted"?
Sure, there is a cap on contributions, but there is also a corresponding cap on benefits.
However, the person who contributes the max, gets only the max benefit, while those who contribute nothing suck up SSI benefits in droves. Just pop into your local public housing project or trailer park to verify the extent of this unearned mooching. The crack trade wouldn't be what is today without the first of the month SSI checks.
The system is weighted alright... Weighted against people who contribute the most of their hard-earned money to the system, and weighted in favor of those lazy sacks of societal crap who collect benefits without contributing a damned nickel.
#17 Posted by padikilller, CJR on Sat 19 Feb 2011 at 04:16 PM
Padikiller, I'm with you on this topic, but you have the political labels wrong. It's actually "statist" or "collectivist" and not "liberal." That is to say, the desires and needs of the collective (or "state") take precedent over those of the individual — a a rate commensurate to each individual's ability (viz, "class" and "income bracket"), of course. Some "libertarians" and general non-interventionists drop the original "classical" modifier and simply call themselves liberals or minarchists or anarcho-capitalists, though the modern language would have them labeled "conservatives." Regardless, I can't blame anyone for using the language used by 999 out of 1000 academics, politicians, and pundits; 99 out of 100 textbooks; and 100% of the MSM.
#18 Posted by Dan A., CJR on Sat 19 Feb 2011 at 07:03 PM
"BINGO!.. If you brown bag the lunch, then you don't have the problem! The people keep and spend more of their own money in they way they choose and the economy grows in short order."
Too bad you can't brown bag your heart once you've been thrown off unregulated private insurance. Too bad brown bagging your house won't help when it's on fire. Too bad brown bagging your city doesn't help much in a flood, earthquake, or fire.
Brown bags. What a load of trite crap.
"How does paying precisely the percentaqe of income make a proportional tax like FICA "weighted"?"
Simple simple math. A person making $30,000 pays 6% of their income, a person making a million pays 0.6%. Since there's more who make less than $100,000 (the fica cap) the majority of the tax is paid by the lower percentiles.
"Sure, there is a cap on contributions, but there is also a corresponding cap on benefits."
Oh shutup. If the benefits were expected to be paid out, we wouldn't be having this conversation. But you are making the argument they should be cut because
the government can't afford to pay out benefits when the revenues collected for those benefits were used to pay for Bush and Reagan tax cuts.
You are being dishonest now.
#19 Posted by Thimbles, CJR on Sat 19 Feb 2011 at 10:15 PM
Thimbles wrote: Too bad you can't brown bag your heart once you've been thrown off unregulated private insurance. Too bad brown bagging your house won't help when it's on fire. Too bad brown bagging your city doesn't help much in a flood, earthquake, or fire.
Insurance is, of course, heavily regulated, despite your unfounded claim to the contrary - indeed it is the most tightly regulated industry, requiring licensure of employees and strict oversight by regulatory commissions in every single state. Consequently, the number of people "thrown off" of private insurance plans is minimal (though grossly inflated by the commie left). At any rate, it's not the federal government's problem. Buy the right insurance. Read your contract. If the insurance company violates the terms of the contract, file a complaint with the insurance commission in your state (where you are entitled to triple damages if you prevail). Act like a grownup and take care of your own health.
Problem solved - no treasury checks needed.
Thimbles beats his dead "tax cut" horse "If the benefits were expected to be paid out, we wouldn't be having this conversation. But you are making the argument they should be cut because the government can't afford to pay out benefits when the revenues collected for those benefits were used to pay for Bush and Reagan tax cuts."
Once again - we've reached an intellectual disconnect - a government doesn't "pay" for tax cuts - As you have already admitted, a government only "pays" for services it can't afford - the mythical free lunch of you misguided hypothetical - the "cost" is only incurred in doling out money that isn't there. If you cut taxes AND cut spending, there is no problem. It isn't the tax cuts that require payment, it is the S P E N D I N G that requires payment (again, as you have conceded).
If you hit the lottery last year, but fail to hit the lottery this year - you don't "pay" for lack of income. You just spend less money - unless you're the government, of course.
Furthe more, these are now the OBAMA tax cuts. Let's stick with the present tense, shall we?
Cut more taxes. Cut services drastically. Cut spending more. Fire people. Lots of them. Most of them. Shrink government. Close the departments of education, labor, commerce, and health and human services. Drastically cut sections from all of the remaining agencies.
And all will be better in the world.
The simple facts (and the ones you must ignore in your horse corpse beating) are that (i) the wealthiest 10 percent of Americans pay nearly 70 percent of the income tax, and (ii) the wealthiest Americans pay the most into Social Security only to see their benefits capped, while millions of "poor" Americans receive billions of dollars in SSI benefits without contributing a nickel to the system.
Why is it that you can't answer my question? How much of the income tax (in terms of percent) should the wealthiest 10 percent of Americans be expected to pay?
I know why, and you know why you can't answer. Any number you pick greater than 70 percent would be asinine. Of course, 70 percent is already asinine. So you simply have to hide from the reality. Well, you can run, but you can't hide. The truth isn't going anywhere.
The truth hurts, I know. But it isn't going anywhere. Deal with it.
#20 Posted by padikiller, CJR on Sun 20 Feb 2011 at 09:30 AM
Paddy, you're dishonest, repetitive, and a waste of time.
"Insurance is, of course, heavily regulated, despite your unfounded claim to the contrary "
And that's something you'd support if you had your way? No.
And the claim you made about "the number of people "thrown off" of private insurance plans is minimal" is contradicted by the evidence of insiders, testimonials, and data. There are lifetime insurance caps, denials of essential treatments, heavy co-pays, rescission, and a whole bunch of etceteras that the medical consumer has to deal with when they cease to be a source of profitable premiums and turn into source of unprofitable liabilities.
But this isn't about insurance, so quit throwing dust.
"Once again - we've reached an intellectual disconnect - a government doesn't "pay" for tax cuts"
But it has to account for them, especially when it designs a service - which is supported and used by every citizen paying into it - with a dedicated tax,
You can't take in money for a service, actually an excess of money required to pay for the service, and then claim there is no money to redeem the service. That is fraud.
People will demand "Where did our money go?" The answer will be "It was used to offset/pay for tax cuts from the wealthiest players in the economy."
People will then say "That money wasn't theirs. If you wanted to cut taxes, then you should have cut spending first so that you could prevent the tax cuts from creating liabilities.You didn't pay for those tax cuts, therefore you should not have given them." The answer will be, from people like paddy, "Oh well, better luck next time."
People will then say "No how about better luck this time, person who has tripled their after tax income in the last three decades since Greenspan and Reagan made this crappy deal. Your tax rate is going back up to 40%. A 5% jump, how will you live?"
"Cut more taxes. Cut services drastically. Cut spending more. Fire people. Lots of them. Most of them. Shrink government. Close the departments of education, labor, commerce, and health and human services. Drastically cut sections from all of the remaining agencies.
And all will be better in the world."
Eisenhower said it best - stupid people believe this garbage.
"The simple facts (and the ones you must ignore in your horse corpse beating) are that (i) the wealthiest 10 percent of Americans pay nearly 70 percent of the income tax"
Not ignored. You say "70% of income tax" I say a 35% top income tax rate. The top quintile earned half the income in America. They can afford it.
"the wealthiest Americans pay the most into Social Security only to see their benefits capped"
No they don't, their payments are capped, and - as Trudy illustrated here in the past - the wealthy live longer and healthier because they work cushier jobs and have more money. They collect plenty of benefits and they stand to benefit even more than the poor in future because they will be able to work until 70 and collect their full benefits whereas poorer people, working more manual labor intensive jobs, will be forced to retire earlier with reduced benefits.
The rich get to both keep their tax cuts and wait out until the increased retirement age to collect their full benefits. The truth is this game is rigged.
And dishonest people, who throw around dishonest arguments which they know to be wrong, support the rigged game.
But any really fiscally responsible person knows tax cuts must be paid for and, if they can't be paid for, then they can't be given.
PS. Obama sucks, but those were Bush's tax cuts pushed through by reconciliation and given the blessing by Alan Greenspan. You conservatives want them permanent.
#21 Posted by Thimbles, CJR on Sun 20 Feb 2011 at 12:14 PM
I never understood why so many Republican minimum-wage burger-flippers go foaming at the mouth because people who make more than $113,799 end up paying, in dollar terms, 69.94% of federal income dollars collected. People who make more than $113,799 AGI per year pay 18.71% ($21,292.79) of that adjusted gross income in income taxes. That's about the lowest effective rate in history, and I'm sure they love it. These 13,996,058 wage slaves earn 45.77% of the earned income -- 4 billion dollars, versus 1 billion dollars earned by the bottom 50%.
Of course, the wealthy taskmasters pick an obscure number out of a tax table, that has nothing whatever to do with anything, and whip the gullible dumbasses into a frenzy.
How's this to feed your outrage: The top 50% of wage earners pay a WHOPPING 97.30% OF THE TOTAL INCOME TAX! And they only earned 87.25% of the total earned income! Where's the outrage?
Source (for those who can do arithmetic in their head): The Tax Foundation - Summary of Latest Federal Individual Income Tax Data, 1980 - 2008. It's actually a nice little spreadsheet you can have a lot of fun with, if you are into that kind of thing.
#22 Posted by James, CJR on Sun 20 Feb 2011 at 12:16 PM
Nearly half of all American "taxpayers" pay no income tax at all.
I'm still not seeing a number, here, guys.
What percentage of the income tax should the top 10% of income-earners pay?
What's a fair number?
#23 Posted by padikiller, CJR on Sun 20 Feb 2011 at 01:11 PM
Yes, they do. They pay Social Security taxes at 12.4 % of their earned income, and Medicare tax of 2.9% of their earned income. That's a huge chunk, almost as high as the effective tax rate of your beloved top 10%.
I'm still not seeing a number, here, guys.
You know why? Because nobody gives a crap about a dumbass, meaningless number like that, except easily-led, weak-minded fools.
#24 Posted by James, CJR on Sun 20 Feb 2011 at 02:22 PM
The crap-job Thimbles is trying to pull here warranted a detailed presentation of the facts, straight from the Social Security Administration...
So here is the real deal..
Two twin brothers are born on 01/01/1945. Richie goes off to school and lands a great job at the age of 18, starting work on 01/01/1963 and earning the maximum contribution salary every year from then until he retires on 01/01/2011.
Dopey stays at home, mooching of his parents for 10 years, finally taking a lousy job on 01/01/1973 that pays only a third of the maximum contribution amount, and continues earning only a third of the maximum contribution amount each year until he too retires on 01/01/2011.
Richie's SS benefit?... $2346
Dopey's SS benefit?... $1257
So, Richie not only contributes THREE times what Dopey contributed to SS for the years 1973 to 2011, but Richie also pays the MAX into the system 10 years longer than Dopey, yet Dopey rakes in more than half the benefit that Richie gets.
So much for Thimbles' little commie crack dream.
This irrefutable little slice of reality can be verified here:
http://ssa.gov/retire2/AnypiaApplet.html
using the data posted here:
http://www.ssa.gov/OACT/COLA/cbb.html
You "watchdogs" can thank me for my fact-checking at your leisure.
#25 Posted by padikiller, CJR on Sun 20 Feb 2011 at 02:28 PM
james wrote " Yes, they do. They pay Social Security taxes at 12.4 % of their earned income, and Medicare tax of 2.9% of their earned income. That's a huge chunk, almost as high as the effective tax rate of your beloved top 10%."
padikiller tolls the Reality Bell - No they don't...
1. Employees pay 6.2 % of their wages in Social Security tax. Employers pay another 6.2 % of their wages.
2. The earned income credit recoups much, if not more than, the amount of SS payroll taxes these low income earners pay. Unlike a tax cut, this tax credit does indeed cost money (something I don't hear the left griping about). It is not uncommon for low income earners to receive more money in refunds than they pay in all form of taxes due to the EIC and other credits.
3. These payroll taxes result in nontaxable retirement and disability benefits that will be returned to the taxpayer (in theory, at least). So these low income earners will get all of this money back, and more, courtesy of the "progressive" (i.e., communist) tax schedule that, as I have proven above, will rob from the high wage earners to pay the low wage earners.
Nice try, James, but no cigar...
Better luck next fabrication.
#26 Posted by padikiller, CJR on Sun 20 Feb 2011 at 02:51 PM
You just betray your profound ignorance by referring to a "communist" tax schedule. It's obvious that you lack the very basic, sixth-grade education. How can someone take any argument about tax issues seriously from someone who throws out that kind of unhinged, clownish description? That's the stuff of three-year-olds. Get real.
#27 Posted by James, CJR on Sun 20 Feb 2011 at 03:24 PM
You can huff, and you can puff, James...
But 6.2 percent (the real SS tax rate on employees) isn't 12.4 percent (your silly claimed tax rate).
This is third grade arithmetic, Jimbo.
Of course, the distinction between communism and a "progressive" tax is a purely semantic one. The intent and the outcome of each system are precisely the same - namely, the redistribution of property by force of law.
#28 Posted by padikiller, CJR on Sun 20 Feb 2011 at 03:54 PM
Pure unhinged silliness. I have a policy against arguing with the intentionally obtuse.
#29 Posted by James, CJR on Mon 21 Feb 2011 at 12:32 AM
Not going to continue the derp derpa business with paddy, but if someone is curious about his 70 percent income tax figure, they can look at the pretty graphs here:
http://www.outsidethebeltway.com/redistribution-from-the-feds-not-really/
#30 Posted by Thimbles, CJR on Mon 21 Feb 2011 at 04:42 AM
@James -- Only in Liberal La La Land can it be considered "obtuse" to point out that 6.2 percent does not equal 12.4 percent.
Or that the payroll taxes paid by low income earners are returned in Earned Income Credits and disability and retirement benefits paid for by the progressive tax scheme by the higher income earners. Or that employers (the "rich") pay another 6.2 percent of the wages of low income earners into SS.
This is just the reality, James. Those fact-thingies get in the way of the liberal fairy tales, I know, but they are what they are.
@Thimbles - YOU made the claim that the "rich" don't pay their fair share of taxes. So... All I am asking you to do is to quantify your own claim.
What percentage of federal income tax do you think the top 10 percent of wage earners should pay? That's it. All I am asking for is a fair number.
The fact that you can't provide a number proves that your position is ludicrous. Any number you pick will be asinine, because the proportion of taxes paid by the "rich" in this country is already asinine and you know it.
So you, like James, have to resort to the Liberal "Ad Hominem" Two-Step in order to dance away from reality.
Shine on, you crazy diamonds! The facts will be here when you come to.
#31 Posted by padikiller, CJR on Mon 21 Feb 2011 at 08:48 AM
I think the issue with Medicaide and similar state level programs is that "we" don't trust the means testing, or the level of vigilance by which it's applied. As an example, probably multiplied millions of times, my father carefully managed his cash-flow by giving cash away to various people so he could meet his monthly asset obligations under Medicaid and maintain his residence in an attended living facility. Since he managed his own checking account until his death at 88 years old, we were unable to track his expenditures but do know that he gave gifts and bought groceries for his non-Profit house-keeper and other care-givers.
"We" don't trust Medicaid administration to be any more efficient than the US Postal Service or more vigilant on fraudulent claims and services than Medicare.
#32 Posted by BK, CJR on Mon 21 Feb 2011 at 04:14 PM
I think they should pay 90% of the income tax, which would be achieved with a 40 to 50 percent income tax rate.
And if there really is an entitlement crisis, then the FICA cap should be temporarily adjusted up to $600,000.
And then, maybe next time, idiots will be incentivized to pass tax cuts when they are paid for instead of passing them willy nilly and busting open a deficit trillions of dollars wide.
#33 Posted by Thimbles, CJR on Mon 21 Feb 2011 at 05:51 PM
BK's post illustrates all that is wrong with boondoggle government social programs.
Rather than do what the law intended - exhaust available resources to defray costs before Medicaid eligibility, BK's father squandered the money by doling it out to the very people who milk the system.
#34 Posted by padikiller, CJR on Mon 21 Feb 2011 at 06:34 PM
Ten percent of population pays ninety percent of the taxes?...
Now there is a great plan for representative democracy,
Why not just make it a hundred percent, Thimbles? We'll just let the "rich" pluck money from their Money Trees ad infinitum and the "poor" can laze about in the Great Utopia forever.
What a deal!
#35 Posted by padikiller, CJR on Mon 21 Feb 2011 at 08:01 PM
You've got a point paddy. We should raise the top marginal tax rate to 90%, like it was under Eisenhower. That would pay off federal debt very quick and really teach the tax cutters a lesson about deficit funded tax cuts.
An interesting thing, according to this:
http://www.usgovernmentspending.com/
Federal spending has fluctuated between 18 to 23 percent of GDP since 1960. Government spending is a stable 4th of GDP.
Federal deficits were about 1 to 3 percent of GDP until Reagan, where they jumped to 5 and 6%, and Bush II, where they went from -1 percent to 3 percent.
Now a days there are deficits of 10 percent and not because the ratio between GDP and Federal Spending has changed. It hasn't.
According to here:
http://www.usgovernmentrevenue.com/
Federal government revenue dropped from 17.5 to 14.5 percent of revenue to GDP. It remains stuck at 14.5% You need tax revenue, not tax cuts. The lower percentiles are either unemployed or under employed. They don't have the money. The rich do, and the rich were the ones bailed out by the government, right or wrong - those were the Bush bailouts, for their screwups.
90% of federal taxes paid by the rich under a 40ish% tax rate was my idea, but your idea is better. A 90% top tax rate which will get the fed the revenue required to fund a real jobs and public works program, like what was had when federal revenues were 23% of GDP and federal spending was 40% during WW2 under FDR.
Thanks for the idea, comrade Padkiller.
#36 Posted by Thimbles, CJR on Mon 21 Feb 2011 at 11:20 PM
I'm all for rolling back the tax rates to 1952.
A top marginal rate of 92 percent on wages greater than $3,259,607.55 (equivalent to $300,000 in 1952 after adjusting for inflation) and a reduction in the capital gains tax to 25%..
AND (now for the REST of the story...) a minimum tax rate of 22.2 percent without any earned income credit for ALL taxpayers earning up to $32,596.08 (equivalent to $4000.00 in 1952) subject to a $4000.00 exemption and a $4000.00 standard deduction.
That'll work.
Reducing the capital gains tax and requiring all Americans to have "skin in the game" is the way to go! People who actually have to pay for services will be more responsible citizens.
#37 Posted by padikiller, CJR on Tue 22 Feb 2011 at 08:13 AM
Long term capital gains is currently at 15%, so that would be a tax increase, and a 22.2 percent tax to replace FICA and expand medicare into a state by state run National Health Service, similar to the one in Canada. Hmmmn. That could work. A $600 a month family health insurance policy premium works out to almost exactly 22% of a $32,596.08 salary. That's a decent trade.
I think the 92% on wages figure is a bit draconian and I'd be more than happy to take a 44.4% cut of wages and short term capital gains, similar to the taxation that produces a sturdy social net and free universities in the European welfare states. We can leave long term at 25% since it will incentivize less destabilizing short term speculation.
I think we have a deal Mr. Pad Killer. *shakes hands*
#38 Posted by Thimbles, CJR on Tue 22 Feb 2011 at 09:38 AM
Why are the top ten percent paying 70% of the income tax? Because the top 20% have 80% of the money.
http://www.balloon-juice.com/2011/02/22/soak-the-super-rich/
You aren't going to get more from the poor, you have to tax the rich. There's no other place to go.
#39 Posted by Thimbles, CJR on Tue 22 Feb 2011 at 07:02 PM
Now wait a minute, Thimbles..
If we're going to do 1952... Let's do 1952!
A top marginal tax rate of 92 percent of wages in excess of $3,259,607.55
A capital gains tax rate of 25 percent (no matter how long the property was held)
A FICA tax of 1.5 percent on employees and employers (No disability benefits or Medicare, only retirement and death benefits)
And a minimum tax rate of 22.2 percent on all income more than $8000.00 - no tax credits (no EIC, no education credits, no child credits, nada)
A single parent of two kids, filing as head of household, and earning a taxable income of $32,596.08 (the inflation-adjusted equivalent of $4000.00 1952 dollars) would pay $3,218.86 income tax under 1952 tax rates (on top of the 1.5 percent contributed to FICA)
This same parent now pays NOTHING (and indeed, makes money) under 2010 tax rates... This parent would pay a tax of $4289.00, but receives an Earned Income Credit of $3325.00, a $2000.00 child tax credit and a $400.00 "making work pay" credit. So... using 2010 tax rates, this "taxpayer" gets at least $1436 from the government.
It's even worse than this of course. We haven't figured in the education credits, the dependent care credits, etc... We also must note that the standard deduction and personal exemptions are higher now (in inflation adjusted dollars) than they were in 1952. So a taxable income today requires a much higher base wage than it would have in 1952.
So.. summing up...
A single, head of household tax filer with a taxable income of $32596 would pay $3,218.86 income tax into the treasury under 1952 tax rates (on top of 1.5 percent to FICA) while this same tax filer sucksmore than $1436 from the treasury now.
So yeah, Thimbles... I'm all for going back to 1952 rates... The wealthiest tax payers would have an effective tax rate of around 25 percent and so would the lower income tax payers.
So go back to 1952? Hell yes!
No disability. No SSI, No Medicare, No Medicaid. No EPA, No Departments of Education, HHS, Energy, etc., etc, etc. Pay down the debt just like Ike did!
Sign us up!
http://www.irs.gov/pub/irs-prior/f1040--1952.pdf
#40 Posted by padikiller, CJR on Wed 23 Feb 2011 at 08:15 AM