Posted on 11/25/2006 11:04:56 PM PST by Zakeet
During the recent off-year elections, the president repeatedly pointed to the booming economy and noted that his tax cuts were responsible. With growth strong and unemployment low despite the ending of the stock-market bubble, terrorist attacks and the war in Iraq, he had every reason to be proud. Moreover, both economic theory and the actual timing of the economic revival support his claims regarding the tax cuts.
That is why it is so odd that rumors swarm around Washington that the president may be willing to raise taxes as part of a "deal" on entitlement reform. In particular, the rumors suggest the president might be willing to get rid of the provision that caps the income level used to compute Social Security taxes and benefits. These rumors aren't without substance; last year the president would not rule out raising the cap when asked.
Doing so would raise the marginal tax rate on the entrepreneurs that Mr. Bush credits for having led the economic recovery by more than 10 percentage points. The new effective rate would be five percentage points above the level when he took office. Moreover, in 2011, the rate would go up a further 4.3 percentage points to an effective 53% marginal rate on entrepreneurial income. The president would thus be not just raising taxes on entrepreneurs to well above the levels that prevailed in the Clinton administration, but to a rate higher than that which prevailed in the Carter administration. Most of the improved incentives for entrepreneurship and work brought about under Reagan would be repealed.
Should the president do this, he doubtless would be thinking that saving Social Security would be worth the price. He would be wrong.
(Excerpt) Read more at opinionjournal.com ...
freepmail when this happens.
>> when in doubt, follow the money.
> Good point, care to expand on this?
Well, for pork it's amazingly easy-- throwing bales of govt money (OUR tax dollars) back home, in return get tons of money to stay in power. The bloated transportation bill, and the infamous "Bridge to Nowhere" shows where a supposedly conservative representative feels no guilt at all about betraying conservative principles.
Look at the lobbyists, and look at the prevalence of exiting Congressmen to the private sector, where they get cushy, overpaid gigs. Look up "Tauzin" to get the backstory on one of these. Oh yeah, there's a quid pro quo. Look at Duke Cunningham, a legislator for whom I had a lot of respect once.
For immigration, what's better for donation-rich corporations than a labor force working for slave wages? Why do you think enforcement at the employer level, while overwhelmingly popular with voters, has always been a non-starter? Follow the money.
So, now, for this: how to start balancing the books? Well, don't bother cutting the pork and waste-- don't bite the hand that feeds you, right? Stick it to the entrepreneur-- not only do they compete with our pocket-stuffing established corporations, but they have very little brib-- er, lobbying power.
I had hoped the Republicans would behave better than the corrupt Dims, but other than some notable exceptions, they have descended into the same pit.
I held my nose and voted, gagging and choking, straight Republican this past election, mostly to avoid the evil of voting Dim (who have been corrupt as well). But the GOP did not earn my vote. And yes, they DO have to earn it.
At this point I'm hoping for gridlock... sweet, sweet gridlock for the pork and spending machine. BUT we won't get even that if the president caves! So let's say I'm very, very wary.
First of all, the caps are raised every year. In 2007, the cap will be $97,500. Taking it off entirely will cause harm to the economy.
Removing Social Security's Tax Cap on Wages Would Do More Harm Than Good
> Do yourself a favour and stop living in the past and try and update yourself to the world we live in today.
And what is your solution?
Bend over every time "our" guys spend like drunken sailors?
Grin nervously and stay silent every time "our" guys sell out our sovereignty and borders?
All we are asking for is that our dumb-as-bricks RINOs and faux conservatives to RETURN TO THE WINNING ROOTS OF CONSERVATIVISM-- to the original 1994 CONTRACT with America. Scream, if need be, if their ears are too stuffed with wax.
Again I ask: What is your solution?
The cap is raised every year. Contribution and Benefit Base It is tied automatically to the average wage index. This predates Reagan. In 1981, it was $29,700; 1990, $51,300; 2000, $76,200; and in 2007 it will be $97,500.
Reagan signed in 1983 the infamous P.L. 98-21, (H.R. 1900), which raised the retirement age, reduced benefits, and some SS taxes. If you recall, SS was paying out more than it was taking in and therefore there was a crisis. Tip and RR struck a deal that was supposed to fix this Ponzi scheme for 70 years. It didn't work. We will be in the same position in 2017, only in worse shape because of the baby boom cohort retirement.
The idea of using part of the money for personal investment accounts was a good idea. As always, the dems said NO. Let them deal with the problem.
It depends on how it is fixed. The system is unsustainable as now structured. Something must be done by 2017. The Dems will want to raise taxes, increase the retirement age, and reduce benefits by changing the COLA formula. We need to change the paradigm for this system, which has an unfunded liability of $12.8 trillion.
In 1950, there were 16 workers paying Social Security taxes for every retired person receiving benefits. Today there are 3.3. By 2030, there will be only 2. By 2030, there will be 70 million Americans of retirement age--twice as many as today. Nearly 80% of Americans pay more in Social Security taxes than they do in federal income tax.
We are headed for a train wreck. PAs are the only way to go to eliminate the future unfunded liability. The UK and Chile have already privatized or partially privatized there government pension schemes.
Let's see how you and the other anti-Republican "conservative" blowhards like "divided government" a year from now.
>How can you say you really knew what was going on in 1994?
> We had a President who was a master at deceit and could convince the majority of how great things were even when the opposite was true.
Yes, and for the past 6 years we have had a Congress AND a President supposedly devoted to conservative principles.
Yes, we are fighting a war now, but the spend-happy, bloated transportation, education, and prescription drug bills had nothing to do with this, and were all a consequence of Republicans betraying core conservative values.
Besides, you never answered my question. How would *you* get these people to return to their conservative roots. Would you do it by blithely accepting all the betrayals to conservatism? Or would you speak up, as we are?
> Let's see how you and the other anti-Republican "conservative" blowhards like "divided government" a year from now.
It all depends on our president finding his veto pen, and stiffening his spine against the moron horde in the two houses.
If he fails to do that, it's hardly a divided government.
The only thing I find more annoying are all the FReepers who go off half cocked and screaming DU style Bush hatred because of these rumors.
you missed at least three things: our nat'l debt and unfunded (SS, Medicare) liabilities, which amount to a future tax (somebody's gonna pay); inflation, which is grossly underestimated and amounts to a hidden tax; and overregulation which drives up the cost of living.
You make a good point. But I put "divided government" in quotes. Whatever we call it, some people, supposedly on our side, are glad that the Rats won this election. Vetoes will help, but they can do only so much.
So, to her, a 30% cut in benefits is fine????????????????????
The Clintons and their horde committed so many outrages, that it's hard to remember them them all. Together, all of us can easily put together the entire list and we should, because we shouldn't ever forget.
Why would you believe a rumor, written about by a DISGRUNTLED ex employee?
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