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  • Taxhiker in Chief Takes On Social Security

    There he goes again. President Obama is proposing yet another huge tax hike.

    Maybe we should cut to the chase and just ask our Taxhiker in Chief to state his final figure—what he thinks the total level of taxes and the tax distribution should look like. Then we could have an honest debate about tax burdens. As it is, all we know for sure is that he wants more, more, and more, and that he believes that those who make the most cannot pay enough.

    From the presidential campaign on, Mr. Obama has argued for higher taxes by way of letting tax relief enacted almost a decade ago expire. He claimed he wanted to tax only the well-heeled, to help spread the wealth around. This approach treats private wealth as public property, contravening both the principles of freedom and the prerequisites of prosperity.

    And through deliberate inaction, Congress is about to let an even bigger tax hike take effect—one that will gouge the middle class, as well. There’s no surprise here. When this Congress was seated, every member knew taxes on all taxpayers would automatically rise unless members intervened. Congress’ inaction is no accident but rather the deliberate strategy of Pelosi-Reid congressional leadership.

    While reiterating that he only wants to raise taxes on the wealthy, Mr. Obama seems anxious to take the extra cash. He could have pressed Congress to act earlier. He could have defended the middle class against the tax hike. Instead, he chose to play a silent role in the political theatre destined to let all the 2001/2003 tax relief expire. This will be Obama’s tax hike, and it’ll be a whopper.

    But that’s not all. He also was perfectly happy to sign Obamacare into law with its new 3.8 percent income tax surcharge on capital income for those earning more than $250,000. This hike raised $210 billion of the total $508 billion of tax hikes in Obamacare.

    The president says he is not anti-business, his recent attacks on the Chamber of Commerce notwithstanding. He claims he understands the importance of the private sector to growth, despite his heavy and futile reliance on government spending to stimulate the economy. Yet he consistently advocates ever higher taxes on the key engine of jobs and higher wages – private investment. Something doesn’t add up here Mr. President.

    And now the Taxhiker in Chief has revealed his plan to save Social Security. Recall that Social Security is now in the red. By 2015 it will require large and ever growing amounts of general revenue to continue to pay current benefits, imposing a new and growing drain on the budget. The Taxhiker’s solution: hike taxes, of course.

    In Mr. Obama’s world, as long as the rich have anything left, there’s something left to tax. So he proposes to lift the Social Security cap. In 2010, the first $106,800 of wage income is subject to the 12.4 percent Social Security tax. The president wants to lift the cap, effectively raising the top federal income tax rate on labor income to 53.2 percent.

    But there’s more. According to a report by the Bureau of National Affairs, Mr. Obama also noted the vast bulk of income earned by millionaires and billionaires is not taxed for Social Security purposes. The horror!

    Of course, the vast bulk of their income is not wage income –the usual subject of a payroll tax. Millionaires and billionaires typically get their money from capital income, which is not now subject to Social Security tax. Mr. Obama seems to be signaling that he wants to turn the Social Security payroll tax into a high-rate general income tax, much as he did with the tax surcharge for Obamacare.

    One can only guess what his next tax hike proposal will target, but you know it’s coming.

    Cross-posted at The Daily Caller.

    Posted in Economics [slideshow_deploy]

    5 Responses to Taxhiker in Chief Takes On Social Security

    1. Drew Page, IL says:

      What are you saying? President Obama promised there would be no new or additional taxes on any family earning less that $250,000. He said it many times, always prefacing his remarks with the statement "Let me be clear".

    2. Ben C. Ann Arbor, MI says:

      The top 400 wealthiest individuals in the US have a combined net worth of 1.25 trillion dollars. Even if the federal government were to seize their assets it wouldn't come close to the 13.6 trillion dollar federal deficit. And forget about the 110 trillion dollar unfunded liabilities in social security. So guess who is picking up the remainder – and the first two guesses don’t count. HR4646 is an attempt to CYA by the democrats but does not curtail spending. At the current rate we will be bankrupt soon without anyone to bail us out. This insanity must stop.

    3. David E M Gilbertson says:

      As an academic observer, far away across the sea in liberal-democratic Britain, but with some knowledge of the US scene having lived and worked in New York for a long time, I found Dr Foster's piece fascinating. What is missing from his discussion, is any recognition of the the fact that in all democratic states which recognise human rights and freedoms, there is a non-negotiable obligation upon those that 'have' to protect and nurture those that 'have not'. This is not socialism or even, (as is claimed by the ignorant), Marxism – it is nothing more than common decency. To claim therefore, as Dr Foster argues, that taxing the wealthy 'contravenes both the principles of freedom and the prerequisites of prosperity', raises greed and selfishness to the level of a public duty.

      Of course 'private wealth is public property'; it would never have been accrued in the first place were it not for a partisan tax system which has operated, virtually without interruption, since the days of Dwight Eisenhower. In the UK pay in excess of 50% of my (relatively large) income in the form of income tax, various corporate taxes, and Value Added Tax on goods and services – and I am happy to do so. It is an investment in the future and provides high quality medical care and a 'safety net' for me, my family and my fellow citizens. Rather that than move towards a society where homelessness and destitution become the norm for those least able to defend themselves.

      I know that the overwhelming majority of 'thinking citizens' in the US, are caring, humane and generous – why is this not reflected in public policy, or political discourse?

    4. jim smith yonkers ne says:

      Nobama's definition of "wealthy" is anyone who formerly or currently owned a wallet, outright.

    5. Mike H, Steubenville says:

      In reading David's comments (his English perspective) confirms what I have seen in my travels throughout Europe. The people of Europe are culturally speaking substantially different than Americans. Europeans have a long history of monarchies, dictators, communism, and now modern democratic socialism. They have been very comfortable with a strong government and the "benefits" that flow from this powerful entity.

      Americans as a general rule have seen that the bigger the government the smaller the person. Americans are suspicious of too much power in the hands of a few. Possibly coincidentally, but I don't think so, Americans are much more religious compared to most of Europe. I think freedom has allowed this to happen but it was also a cultural belief in the limited role of the state. Which leads me to the most ironic point that is made by David and many progressives – Americans seem like charitable people why wouldn't they want this in their policy and accept higher taxes? Americans are the most philanthropic people on the planet but they are not forced to do so through taxation (not fully at this point at least). Our friend David sees an inconsistency when Americans don't except a big tax burden to help out our fellow man. But if you follow the money Americans give more generously when compelled from charity rather than taxation. Charity is not possible without freedom, no virtue is possible without freedom.

      So more taxation actually means less true charity. Saving social security is a noble objective if fiscally possible and sound. But should we follow the first rule of always seeking to do no harm. With greater taxation there is always harm – most usually to those who need charity the most.

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