Social Security tax holiday | Eastern North Carolina Now

    Publisher's Note: Jim Bispo's weekly column appears in the Beaufort Observer.

    It's interesting. The Dems seem to have the Reps in a corner on the question of continuing not to collect social security tax (i.e that would be the tax cut for the great middle class - +/- $1000 per $50,000 of income). Why has no one asked what that grand give-away is doing to the Social Security Trust Fund - which reportedly is already running low?? The answer is that the money that Social Security is "losing" is to be made up from the general fund. Where do you suppose that money comes from?? Could it possibly be a lot of the same folks who are going to end up with all the "savings"?? Or do you suppose the anointed one is simply trying to drain the Social Security Trust Fund dry so he can make an even greater power grab for America?? If he is, it might work. Between the anointed one and Harry the Dealer, they are liable to pull it off. Unfortunately, at that point, being able to say "I told you so." won't be much of a consolation. It needs to be stopped sooner rather than later!!

    According to Roberton Williams, Senior Fellow at the Tax Policy Center, instead of extending the "Making Work Pay" tax credit, the lame duck congress (following the disastrous - from their standpoint - 2010 mid-term election) replaced the "Making Work Pay" refundable tax credit with the one year Social Security "tax holiday". We can only wonder if they anticipated that a year later (at the beginning of a big time election year) they could use that as a club to put the Reps into a rather untenable position (which on the surface they seem to have done). The Dems are able to accuse the Reps of wanting to raise taxes on the great middle class.

    But wait!! Take a look at the two alternatives. The tax holiday is regressive. (Regressive is bad.) The Making Work Pay credit is not.

    Under the tax holiday, the lower your income, the less you save. The higher your income the more you save. Take a look at these numbers. A $25,000 annual income saves you $500 per year (.02 x 25000 = 500) not quite $10.00 per week. If your salary is $100,000 you save $2000 per year or a little less than $40.00 per week. So who is getting the best of the deal, the lower paid folks or the higher paid folks??

    When you stop to think about it, the give away the Dems are pushing provides a greater benefit to the rich than it does to the so called middle class. If that was not true, it would be one of the Dems endlessly repeated talking points - spoken by every Dem who is able to get his face in front of a TV camera or a radio mike. Instead, all we hear is that a $50,000 a year family will lose $1000 per year if the temporary tax holiday is not continued. (By the way, that amounts to a just a little over $19 per week) No Social Security tax is paid on income above $106,800. They pay the reduced rate up to that amount and then nothing on the earnings above it. Not a bad deal for them. Yet this is what the Dems are touting - while at the same time arguing that the rich need to pay more tax - "their fair share". In effect, the tax holiday scheme is regressive, something that the Dems normally find abhorrent. That is to say that the poor and middle class pay a disproportionately higher share than do those with higher incomes. But then when it can be used as a cudgel with which to beat up on the Reps...

    The "Making Work Pay" tax credit "rewarded" those with the lower incomes with a higher credit. The Making Work Pay credit was 6.2% of your earnings but it was capped ($400 for a single person twice that for a married couple filing jointly). If the Dems wanted to put more money in the pockets of the middle class, all they had to do was increase the cap. In that way, they could have truly been helping the poor and middle class without "rewarding" those with higher incomes (which is normally anathema to Dems - at least that's what they say). Keeping the Making Work Credit would not have been a drain on the already suffering Social Security trust fund. All this tax holiday has done is hasten the day when Social Security payments will have to be reduced or eligibility requirements made more stringent or something else equally as unpleasant. Do you suppose it could have been the word "work" in the name of this credit that made the Dems want to jettison it?? But then, who cares?? The anointed one will be drawing his rather generous non-Social Security pension by then. (As an aside, I suspect there are quite a lot of folks who would subscribe to the notion the sooner that happens, the better..)

    I have no idea where Warren Buffet would come out in the tax holiday scheme. (Surely he has some earned income on which he pays social security tax, and, if so, he will likely again be paying a lower percentage of tax than his secretary. And just as surely, that would not be the case if the Making Work Pay credit was still in place..

    By opting for the tax holiday, it certainly begins to look like the Dems are tending to favor the more well to do over the middle class and the poor - all the while talking about what good care they are taking of the poor and middle class..

    I don't suppose a suggestion that we get rid of both of those giveaways would get very far in today's entitlement oriented society..

    D'ya think??.
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