Another view of the Obama Tax compromise
Testing the tax compromise
Excerpts:
First, the Bush tax cuts. If they expire in total, everybody agrees the country is in for a heap of hurt. Therefore, up or down, should we let the tax cuts expire? A two-part question, middle class [sic] and filthy rich. There is virtually unanimous consent on the so-called middle class tax cut so keep it, don't let it expire. The so-called millionaire's tax cut? No consensus so let it expire and judge the consequences when the new congress is seated. If necessary, and I think it will be necessary, reinstate it.
Second, extending unemployment insurance. This is obviously a contradiction in terms. Any insurance element to unemployment payments has long since been blown away. Unemployment payments are popular but contrary to sound fiscal policy. Scott Brown, you are half right when you insist on using existing monies to pay for this. ... When I was unemployed and my benefits ran out, I became much more aggressive (and successful) in job hunting.
Third, payroll tax reduction. As I understand this, it is a 2% reduction in the Social Security tax payment for the worker. (I would save $2,200 a year. The total cost to the deficit - $120,000,000,000) Does this mean that we are finally doing away with the fiction that Social Security has a trust fund and a guaranteed funding stream? I think it does. Social Security can now be recognized as the massive welfare program that it actually is, an entitlement in urgent need of reform. Do not cut Social Security funding arbitrarily at this time.
Comment: More ... read the whole thing (mentions Ethanol funding which I oppose. I haven't completely sorted through the proposal. Since my income is less than $ 250K, it would be easy to say "tax the very rich (you know people not like me!)" I am concerned about the reduction of the funding for social security. Hey that program is underfunded as it is. The unemployment insurance: This phrase is accurate: "obviously a contradiction in terms. Any insurance element to unemployment payments has long since been blown away". Yet I feel for those who are unemployed.
Social Security advocates fear payroll tax cut
ReplyDeleteThe plan is part of a package of tax cuts and extended unemployment benefits that Obama negotiated with Senate Republican leaders. It would cut workers' share of Social Security taxes by nearly one-third for 2011. Workers making $50,000 in wages would get a $1,000 tax cut; those making $100,000 would get a $2,000 tax cut.
The government would borrow about $112 billion to make Social Security whole. Advocates and some lawmakers worry that relying on borrowed money to fund Social Security could eventually force it to compete with other federal programs for scarce dollars, leading to cuts.
Social Security taxes "ought to be held sacrosanct," said Rep. Earl Pomeroy, D-N.D., chairman of the House Ways and Means subcommittee on Social Security.
"When you start to signal that the (Social Security) tax levels are negotiable, you end up in long-term trouble, I think, in terms of making absolutely certain that the entitlement funding streams are secure," Pomeroy said.