Democrats propose ending another tax break.

MayrMeninoCrash

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Dec 9, 2004
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#1
Did I say Democrats? I meant Republicans

GOP may OK tax increase that Obama hopes to block

WASHINGTON (AP) — News flash: Congressional Republicans want to raise your taxes. Impossible, right? GOP lawmakers are so virulently anti-tax, surely they will fight to prevent a payroll tax increase on virtually every wage-earner starting Jan. 1, right?

Apparently not.

Many of the same Republicans who fought hammer-and-tong to keep the George W. Bush-era income tax cuts from expiring on schedule are now saying a different "temporary" tax cut should end as planned. By their own definition, that amounts to a tax increase.

The tax break extension they oppose is sought by President Barack Obama. Unlike proposed changes in the income tax, this policy helps the 46 percent of all Americans who owe no federal income taxes but who pay a "payroll tax" on practically every dime they earn.

There are other differences as well, and Republicans say their stand is consistent with their goal of long-term tax policies that will spur employment and lend greater certainty to the economy.

"It's always a net positive to let taxpayers keep more of what they earn," says Rep. Jeb Hensarling, "but not all tax relief is created equal for the purposes of helping to get the economy moving again." The Texas lawmaker is on the House GOP leadership team.

The debate is likely to boil up in coming weeks as a special bipartisan committee seeks big deficit reductions and weighs which tax cuts are sacrosanct.

At issue is a tax that the vast majority of workers pay, but many don't recognize because they don't read, or don't understand their pay stubs. Workers normally pay 6.2 percent of their wages toward a tax designated for Social Security. Their employer pays an equal amount, for a total of 12.4 percent per worker.

As part of a bipartisan spending deal last December, Congress approved Obama's request to reduce the workers' share to 4.2 percent for one year; employers' rate did not change. Obama wants Congress to extend the reduction for an additional year. If not, the rate will return to 6.2 percent on Jan. 1.

Obama cited the payroll tax in his weekend radio and Internet address Saturday, when he urged Congress to work together on measures that help the economy and create jobs. "There are things we can do right now that will mean more customers for businesses and more jobs across the country. We can cut payroll taxes again, so families have an extra $1,000 to spend," he said.

Social Security payroll taxes apply only to the first $106,800 of a worker's wages. Therefore, $2,136 is the biggest benefit anyone can gain from the one-year reduction.

The great majority of Americans make less than $106,800 a year. Millions of workers pay more in payroll taxes than in federal income taxes.

The 12-month tax reduction will cost the government about $120 billion this year, and a similar amount next year if it's renewed.

That worries Rep. David Camp, R-Mich., chairman of the tax-writing Ways and Means Committee, and a member of the House-Senate supercommittee tasked with finding new deficit cuts. Tax reductions, "no matter how well-intended," will push the deficit higher, making the panel's task that much harder, Camp's office said.

But Republican lawmakers haven't always worried about tax cuts increasing the deficit. They led the fight to extend the life of a much bigger tax break: the major 2001 income tax reduction enacted under Bush. It was scheduled to expire at the start of this year. Obama campaigned on a pledge to end the tax break only for the richest Americans, but solid GOP opposition forced him to back down.

Many Republicans are adamant about not raising taxes but largely silent on what it would mean to let the payroll tax break expire.

Republicans cite key differences between the two "temporary" taxes, starting with the fact that the Bush measure had a 10-year life from the start. To stimulate job growth, these lawmakers say, it's better to reduce income tax rates for people and for companies than to extend the payroll tax break.

"We don't need short-term gestures. We need long-term fundamental changes in our tax structure and our regulatory structure that people who create jobs can rely on," said Sen. Lamar Alexander, R-Tenn., when asked about the payroll tax matter.

House Majority Leader Eric Cantor, R-Va., "has never believed that this type of temporary tax relief is the best way to grow the economy," said spokesman Brad Dayspring.

The nonpartisan Congressional Budget Office says payroll tax reductions give the economy a short-term boost. But it says the benefit is bigger if employers get the tax break instead of, or along with, workers.

Some top Republicans have taken a wait-and-see approach, expecting the payroll tax issue to be a bargaining chip in the upcoming debt reduction talks.

Neither House Speaker John Boehner, R-Ohio, nor Senate Minority Leader Mitch McConnell, R-Ky., has taken a firm stand on whether to extend the one-year tax cut.

Most GOP presidential candidates also are treading lightly.

Former Massachusetts Gov. Mitt Romney did not flatly rule out an extra year for the payroll tax cut, but he "would prefer to see the payroll tax cut on the employer side" to spur job growth, his campaign said.

Former House speaker Newt Gingrich said Republicans will fall under increasing pressure to extend the payroll tax cut. If they refuse, he said in a recent speech, "we're going to end up in a position where we're going to raise taxes on the lowest-income Americans the day they go to work."

Many Democrats also are ambivalent about Obama's proposed tax cut extension. They are more focused on protecting social programs from deep spending cuts. Some worry that a multiyear reduction in the tax designated for Social Security could undermine that program's health and stature.

For decades the payroll tax generated more revenue than the Social Security paid out in benefits. The excess was used to fund other government operations. Last year, however, Social Security benefits began outstripping revenue from its designated sources, forcing the program to start tapping its "trust fund" of government obligations.
http://www.google.com/hostednews/ap...BU77yg?docId=5e01f49a8f5546578066437dd437299d

Gotta pay for those Tax Cuts For The Rich ™ somehow.
 

domelogic

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#2
Nice (tm) made me laugh. What is the benefit of this besides like an average of less than 1000 for the year? Is this suppose to stimulate spending? Just curious.
 

Party Rooster

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#3
Did I say Democrats? I meant Republicans
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Norm Stansfield

私は亀が好きだ。
Mar 17, 2009
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#4
You should do some research on the exact sum these 46% are currently contributing to the federal budget, compared to the other 54%. Post your findings here.

Then I'll decide whether increasing their taxes, and lowering the 54%'s, is fair or not.
 

Party Rooster

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#5
The only way a tax cut like that works as a "stimulus" is when it's a check like when W did it. And it's very short-lived. Fuck 'em, tax holiday's over. How about lowering the matching percentage that businesses have to contribute and see if that spurs new hiring?
 

domelogic

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#6
The only way a tax cut like that works as a "stimulus" is when it's a check like when W did it. And it's very short-lived. Fuck 'em, tax holiday's over. How about lowering the matching percentage that businesses have to contribute and see if that spurs new hiring?
Now you are getting crazy, stop with a new idea. Hiring whats that?
 

Motor Head

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Jan 23, 2006
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#7
Time to pay the bills, of course the tax cut for working people will be the first victim.

Warren Buffet - Class warfare is quite real, but what surprises me is how well my side is doing.
 
Jun 2, 2005
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#8
I read that entire article, and I still have no fucking clue what the actual proposal is. It reads like an editorial from HuffPo.
 

Begbie

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Jul 21, 2003
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#9
Damn Republicunts.

Voss' Tumor said:
I read that entire article, and I still have no fucking clue what the actual proposal is. That article reads like an editorial from HuffPo.
Which is surprising since it's an Associated Press piece. Or, not surprising at all...
 

Von Maestro

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Mar 12, 2010
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#10
As someone who does payroll for a living, this was NOT a tax cut but rather another welfare giveback from Obama. All he did by lowering the percentage on employee contributions to Social Security was essentially lower even further the current contribution levels to an already unsustainable Social Security system. If our Social Security contributions are supposed to be our contribution to the safety net that Social Security is meant to provide at retirement, then a cut in percentage is not a "tax cut" but rather a postponement of the payment that we will at some point have to make to cover the contributions that are currently being missed.

What the decrease essentially admits (as did Obama's threat not to make out Social Security checks during the debt ceiling fiasco) is that the Social Security system is in fact simply a Ponzi scheme and nothing more. Imagine if you called your 401(k) provider and told them you expect your retirement contributions to stay at 6.2% but will only give them 4.2%... it's a fucking joke that will cost us a ton of money when this thing goes completely insolvent.
 

Party Rooster

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#11
It wasn't until very recently that Social Security revenues stopped exceeding the payouts of it. Had we not dipped into the till to pay for other bullshit it would've been solvent for a long long time.

All those years when baby boomers were earning a lot of money it should have been left alone for when they start hitting retirement age like they are now.
 

CousinDave

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#12
It wasn't until very recently that Social Security revenues stopped exceeding the payouts of it. Had we not dipped into the till to pay for other bullshit it would've been solvent for a long long time.

All those years when baby boomers were earning a lot of money it should have been left alone for when they start hitting retirement age like they are now.

politicians will never be able to resist dipping into the till
 

Norm Stansfield

私は亀が好きだ。
Mar 17, 2009
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#13
It wasn't until very recently that Social Security revenues stopped exceeding the payouts of it. Had we not dipped into the till to pay for other bullshit it would've been solvent for a long long time.

All those years when baby boomers were earning a lot of money it should have been left alone for when they start hitting retirement age like they are now.
Yeah, if only the power hungry, short sighted politicians you put in charge of this socialist scheme would've ran it the way a self interested businessman runs his for-profit business, instead of the way power hungry, short sighted politicians run socialist schemes, everything would be alright now.
 
Jan 9, 2006
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#14
It wasn't until very recently that Social Security revenues stopped exceeding the payouts of it. Had we not dipped into the till to pay for other bullshit it would've been solvent for a long long time.

All those years when baby boomers were earning a lot of money it should have been left alone for when they start hitting retirement age like they are now.
Why concern yourself with what the next generation is going to have to pay for? Just live it up and leave a mess for your kids, but also blame those kids for the problems that you caused.
 

Don the Radio Guy

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#15
As someone who does payroll for a living, this was NOT a tax cut but rather another welfare giveback from Obama. All he did by lowering the percentage on employee contributions to Social Security was essentially lower even further the current contribution levels to an already unsustainable Social Security system. If our Social Security contributions are supposed to be our contribution to the safety net that Social Security is meant to provide at retirement, then a cut in percentage is not a "tax cut" but rather a postponement of the payment that we will at some point have to make to cover the contributions that are currently being missed.

What the decrease essentially admits (as did Obama's threat not to make out Social Security checks during the debt ceiling fiasco) is that the Social Security system is in fact simply a Ponzi scheme and nothing more. Imagine if you called your 401(k) provider and told them you expect your retirement contributions to stay at 6.2% but will only give them 4.2%... it's a fucking joke that will cost us a ton of money when this thing goes completely insolvent.
Finally. Someone who understands what's really being done here. This wasn't a tax cut in the first fucking place. It's like when Barry fiddled with the withholding tables and called THAT a tax cut, too. Then a couple million poor people actually had to pay in on April 15th instead of getting the refund they were expecting. Fuck this article.
 
Jun 2, 2005
15,516
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Dallas
#16
As someone who does payroll for a living, this was NOT a tax cut but rather another welfare giveback from Obama. All he did by lowering the percentage on employee contributions to Social Security was essentially lower even further the current contribution levels to an already unsustainable Social Security system. If our Social Security contributions are supposed to be our contribution to the safety net that Social Security is meant to provide at retirement, then a cut in percentage is not a "tax cut" but rather a postponement of the payment that we will at some point have to make to cover the contributions that are currently being missed.

What the decrease essentially admits (as did Obama's threat not to make out Social Security checks during the debt ceiling fiasco) is that the Social Security system is in fact simply a Ponzi scheme and nothing more. Imagine if you called your 401(k) provider and told them you expect your retirement contributions to stay at 6.2% but will only give them 4.2%... it's a fucking joke that will cost us a ton of money when this thing goes completely insolvent.
Wow, best tl;dr version I could have hoped for. Nice job, and I agree 100%.

politicians will never be able to resist dipping into the till
Yeah, if only the power hungry, short sighted politicians you put in charge of this socialist scheme would've ran it the way a self interested businessman runs his for-profit business, instead of the way power hungry, short sighted politicians run socialist schemes, everything would be alright now.
Finally. Someone who understands what's really being done here. This wasn't a tax cut in the first fucking place. It's like when Barry fiddled with the withholding tables and called THAT a tax cut, too. Then a couple million poor people actually had to pay in on April 15th instead of getting the refund they were expecting. Fuck this article.
And +1 to all this.

I know, I really do add nothing lately.
 

Party Rooster

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#17
Yeah, if only the power hungry, short sighted politicians you put in charge of this socialist scheme would've ran it the way a self interested businessman runs his for-profit business, instead of the way power hungry, short sighted politicians run socialist schemes, everything would be alright now.
I put in charge? I wasn't even alive during FDR's administration. But if you're talking recently, the rate at which the SS trust fund has "invested" in government securities sure didn't get any better when Republicans had control of both houses of Congress and/or the presidency.



Finally. Someone who understands what's really being done here. This wasn't a tax cut in the first fucking place. It's like when Barry fiddled with the withholding tables and called THAT a tax cut, too. Then a couple million poor people actually had to pay in on April 15th instead of getting the refund they were expecting. Fuck this article.
As usual, somebody that doesn't understand what's going on here. How was it not a tax cut? Less money was being taken out people's paychecks by the government.

And the "Making Work Pay" tax cuts were explained to you several times before. People paid less taxes OVERALL in those years. Because of how the withholding rates were staggered, some people got caught in the middle. DESPITE ignoring all the warnings that were on the news and from their employers to make sure your withholding was correct.

That being said, both were idiotic in their implementation. Should have just cut everyone a check like W did if they wanted to "stimulate" the economy via tax cuts. Or lowered the employer-side contribution of SS taxes to stimulate hiring.
 

Von Maestro

Registered User
Mar 12, 2010
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#18
As usual, somebody that doesn't understand what's going on here. How was it not a tax cut? Less money was being taken out people's paychecks by the government.
Because technically (at least according to the way Social Security is supposed to work), Social Security is NOT a tax. It is a mandatory contribution to a fund that will pay you back those funds when you retire. If you are cutting the current contribution system, while also scrambling to maintain levels for those currently collecting SS, then all this moron is doing is putting further strain on an already broken system.

In short, SS is not a tax in the same vein as your IRA or 401(k) is not a tax. All Obama did by cutting the employee contribution is hasten the timetable in which the system becomes totally fucked.
 

Don the Radio Guy

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#19
I love how we in this thread are supposed to take the word of the most dishonest administration in American history and an opinion piece from its propaganda arm over a guy who does payroll for a living.
 

Party Rooster

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#20
Because technically (at least according to the way Social Security is supposed to work), Social Security is NOT a tax. It is a mandatory contribution to a fund that will pay you back those funds when you retire. If you are cutting the current contribution system, while also scrambling to maintain levels for those currently collecting SS, then all this moron is doing is putting further strain on an already broken system.

In short, SS is not a tax in the same vein as your IRA or 401(k) is not a tax. All Obama did by cutting the employee contribution is hasten the timetable in which the system becomes totally fucked.
Semantics. People have been calling them "payroll taxes" for decades. Do you forward the withholdings to the IRS or the SSA?

And I'm not defending what he did either, I agree with what you're saying about it just pushing the problem further down the road. But I just get tired of people lumping in SS with all the other "entitlements" when for 70 years it took in more revenue than it paid out.

I love how we in this thread are supposed to take the word of the most dishonest administration in American history and an opinion piece from its propaganda arm over a guy who does payroll for a living.
 

Southpaw

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#22
Cut the SS portion of FICA taxes to zero for the next 10 years for both the employer and employee sides and change the law to fund Social Security just like every other government program. That's a 6.2% raise for all workers earning up to $106,800, a 6.2% cut in payroll expenses for employers up to the same cutoff, and an elimination of political/statutorily imposed "insolvency" for Social Security. During that 10 year window we should reform the entire tax code which may eliminate the need to return to the current level of payroll taxes.
 

Party Rooster

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#23
Cut the SS portion of FICA taxes to zero for the next 10 years for both the employer and employee sides and change the law to fund Social Security just like every other government program. That's a 6.2% raise for all workers earning up to $106,800, a 6.2% cut in payroll expenses for employers up to the same cutoff, and an elimination of political/statutorily imposed "insolvency" for Social Security. During that 10 year window we should reform the entire tax code which may eliminate the need to return to the current level of payroll taxes.
Why? The people most likely to need SS are the ones that aren't paying any income taxes as it is now. At least this is one way they're forced to contribute to a system that they will no doubt be drawing from.
 

Southpaw

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Jan 12, 2005
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#24
Why? The people most likely to need SS are the ones that aren't paying any income taxes as it is now. At least this is one way they're forced to contribute to a system that they will no doubt be drawing from.
A large, long term (if not permanent)tax cut that benefits households earning less than $100K would assist deleveraging and increase purchasing power for the population most likely to spend, which will speed up recovery. Year after year of an economy producing far less than its potential output with millions of people out of work is a much greater crisis than the structural issue in the (illusory)funding mechanism for Social Security.
 

whiskeyguy

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#25
Cut the SS portion of FICA taxes to zero for the next 10 years for both the employer and employee sides and change the law to fund Social Security just like every other government program. That's a 6.2% raise for all workers earning up to $106,800, a 6.2% cut in payroll expenses for employers up to the same cutoff, and an elimination of political/statutorily imposed "insolvency" for Social Security. During that 10 year window we should reform the entire tax code which may eliminate the need to return to the current level of payroll taxes.
Great. So instead of the intended use of SS, which is in essence and mandatory savings account, you turn it into another welfare vehicle? So instead of forcing all Americans to pay into their own accounts (which is bad IMO), you now force only the wealthier Americans to further carry the lower income Americans in yet another social welfare program (which is far worse)... because that's working out so well for us now. Do you not believe in any personal responsibility in America? Do people not have to contribute a cent to their own well-being, and be held responsible for their own fucking terrible life decisions that make (at least a good portion) of them dependent on the earners in this country?