According to an article on Bloomberg.com December 21, “Democrats have spent the past several days warning that average middle-income workers could lose about $40 from each paycheck if the tax cut expires.” Supposedly everyone agrees the tax cut should be extended, there will be dire consequences if it isn’t, the recovery will be stalled, the middle class will be harmed, yada, yada, yada!
Somehow this has taken on a life of its own. No longer is anyone asking if we should do this at all or if we accomplished anything by doing it for 2011. Lost from the debate is the fundamental issue of changing the funding stream for Social Security. Democrats should be asking the question, what would FDR do? Instead the politicians are asking what will play well next November. And then we have the President doing this as reported by Politico:
“Surrounded on a stage by people who had responded to an invitation by the White House to describe how rescinding the tax cuts would affect them, Obama said that “enough is enough” and that “the people standing with me here can’t afford any more games.”
The very people who criticize corporations for wanting to relocate or to cut their workforce to meet earnings targets, are more than willing to do far worse to the country to meet their political goals as long as they can mask it as a benefit to the middle class. By this time next year unemployment may be at 8%, GDP 3% if we are lucky. Will the 90% of workers who are currently employed and living their lives as they always have, be in better shape to “lose about $40 from each paycheck” or will they be dependent on the extra 2% in their paycheck and be unconcerned about Social Security funding?
While counterproductive to increasing spending, earlier this year I suggested that people take the extra 2% in their pay and leverage it by increasing pre-tax 401k or IRA contributions to boost retirement savings and also avoid the shock of a future tax increase when the largess expires (assuming it does, of course). I still think that’s a good idea.
What the President probably meant to say was “the people standing with me here can’t afford me anymore.”
“Senator Reid and I have reached an agreement that will ensure taxes do not increase for working families on January 1. Ah, good news …
- Another Raid of Social Security is No Tax Cut (economicnoise.com)
- President Obama Fires New Shot At GOP In Tax Cut Fight (huffingtonpost.com)
- Payroll Tax Showdown: What It Means to You (abcnews.go.com)
- Social Security Being Savaged, Does Anyone care: With payroll tax(SSI) cut unresolved, Congress packs up (tarpon.wordpress.com)