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Tuesday, December 7, 2010

Obama to cut FICA tax that funds Social Security and Medicare


As Democrats know, since the days of the New Deal, the goal of the GOP has been to destroy every single New Deal program -- from Glass-Stegall and it's restrictions on banks, to the Rural Electrification Administration, to Social Security.

The Republicans have made it clear for over half the past century that they will not rest until they have returned us to the good ol' days of the Robber Barons, child labor, the 6-1/2 day work week, rotten meat, and most of the nation living hand to mouth. They got it last night.

One-term President George H. W. Obama handed the GOP what they had always wanted:  The key to destroy Social Security (SS) and Medicare.

SS and Medicare are paid for by payroll taxes.  Payroll taxes are around 12 percent with employer and employee each paying half.

One-term President George H. W. Obama announced yesterday his capitulation to the corporate take-over of the USA, thereby ending our 234 year experiment of government of the people, by the people, and for the people.  Screw the people.

Here's what happened

Part of the capitulation agreement is a one-year reduction of the payroll tax from 12 percent to 10 percent, a 15 percent cut.

As we all know, this is permanent, in spite of One-term President George H. W. Obama's claim that this is only a one-year, temporary action.

Why is this permanent?  Because one year from now, we'll be in the midst of a presidential campaign and any attempt to let the "temporary" payroll tax cut expire will be met by GOP cries of "you can't raise taxes during a recovery."

So the payroll tax has been cut from 12 percent to 10 percent: thereby, reducing SS and Medicare revenue by 15 percent.

SS and Medicare are almost on life support now.  Cutting their revenue by 15 percent now sets up both programs for bankruptcy . . .

Sweet Thing and I are stocking up on cat food.  That's all we'll be able to afford when one-term President George H. W. Obama's capitulation kicks in.

This post makes some good points. Rightardia has suggested that the payroll tax could be cut provided the Social Security cap was raised or eliminated altogether. The $102,500 cap has become a political football and George w. Bush refused to raise it in his second term. 


Because of the cap, the Social Security payroll tax is regressive and his been on the backs of the middle class since Social Security was implemented in the 1930s. 


At the same time, Republicans have been cutting taxes for the affluent since the Reagan administration. As a result the top earning quintile of Americans (top 20 per cent) take in half of the net national income. Most of this income is immune to the Social Security part of FICA because of the income cap. 

The simplest solution is to tax 100 per cent of income for Social Security as Medicare is and reduce the payroll tax in the process. 

It remains to be seen how Obama will reform the Social Security part of FICA. If he doesn't pass more of this tax onto the affluent, he is making a huge historical  mistake.  In fact, he would definitely lose the support of progressives.


As the Zen master said, "We will see,"

source:
Newsgroups: alt.politics

From: Kickin' Ass and Takin' Names ...@hotmail.com>
Date: Tue, 07 Dec 2010 07:11:29 -0500
Local: Tues, Dec 7 2010 7:11 am
Subject: One-term President George H. W. Obama just gave Republicans one of their fondest wishes: DESTROY SOCIAL SECURITY
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6 comments:

60's person said...

I've heard Obama accused as a corporate shill.
More and more he comes off as exactly that, and worse. He has acted like a DINO since the inaugaration.
GR Co Springs

Unknown said...

A lot of progressives feel the same way especially after the Devil's compromise with the GOP. If Obama doesn't improve, he will lose progressives and MoveOn.org in the next election. He beat Hillary becausee MoveOn.org came out in the party caucuses for him.

Is Rightrdiaa disappointed in Obama. Yes!

Tim Wohlford said...

Arch conservative enemy here.

At least we now agree on Obama. I just can lay claim to the fact that I saw it coming during the campaign.

Unknown said...

Well, imagine if gramps had been elected with Sarah P. as the Veep.

Obama will have to mend fences with progressives or he will be finished. The Dems didn't have much enthisiasm in the 2010 election cycle.

It won't improve in 2012 unless Obama makes some big changes.

TheNibbler said...

As s senator, Obama hung out on the left side, with a small flock of others who did as well. Now that he is alone in the spotlight, he's too afraid of pissing people off. As he tries to make everyone happy, he's discovering that nobody is goingto be pleased.
It used to be Donkey vs Elephants, but now its DINOs and RINOs vs the American people

Unknown said...

Yes, it is possible Obama has been "Clintonized." At least the Dems got some work done in the last session of Congress.