#WhyIsMyPaycheckLessThisWeek

[Sbane]

Democrats should have made a bigger deal about payroll taxes and show the Republicans wanted to hike it. There are a lot of 🐴 about.

[Sbane]

To be fair with these guys, the Dems giving up on the payroll tax is indeed pretty disgusting and unforgivable.

Yes, the Democrats are pussies and have been for a while, but why not blame the ones chiefly responsible?

[Sbane]

All of you red avatars need to decide whether you think tax cuts are good or bad.

False dichotomy. Not all tax cuts/hikes are the same. Don't be obtuse.

You're right. They're not all the same. This relates to a tax that actually funds a specific program.

The social security fund has been looted for decades so there is no point pretending payroll taxes are only used to fund social security and medicare. It's a question of who gets taxed. Due to this deal, most working people will have to pay 2% more while income taxes won't rise for those making even $350,000 a year. And a good bit of that income (even assuming it is from both spouses earning equally) is not subject to the payroll tax. Why don't the Democrats propose raising the cap on payroll taxes? Oh that's right, because they are pussies.

[Sbane]

All of you red avatars need to decide whether you think tax cuts are good or bad.

False dichotomy. Not all tax cuts/hikes are the same. Don't be obtuse.

You're right. They're not all the same. This relates to a tax that actually funds a specific program.

The social security fund has been looted for decades so there is no point pretending payroll taxes are only used to fund social security and medicare. It's a question of who gets taxed. Due to this deal, most working people will have to pay 2% more while income taxes won't rise for those making even $350,000 a year. And a good bit of that income (even assuming it is from both spouses earning equally) is not subject to the payroll tax. Why don't the Democrats propose raising the cap on payroll taxes? Oh that's right, because they are pussies.

Sbane, you just can't resist embracing that most wrong headed notion that earned income should be taxed at a higher rate than non capital gain investment income, eh?  Punish the upper middle class on their earned income (those making 100K to 200K per year), and punish them some more! This notion is one of the dumbest ideas the Dem Left has ever had really.  Dumb!

When Social security was designed, 90% of income was taxed by the SS tax. Now it has gone down to 80% as there are a lot more people earning more than the threshold. Actually incomes rise pretty fast beyond that threshold because suddenly companies don't have to pay 6% on top of that. So why shouldn't the cap be raised to cover 90% of income again? Moreover, why shouldn't it just cover 100% of income? I can understand the fairness argument, but why doesn't it make economic sense? I don't know if you were trying to make that argument.

[Sbane]

Torie, if you were trying to compare capital gains vs income, yes I don't think it is fair that people get to sit on their ass and make money either. In fact, haven't I ranted about that before? Still, as long as short term investments get taxed at the regular rate of income (and tack on payroll taxes on it as well), I am fine with a lower rate for long term investments. We do want investments in the economy, don't we?

[Sbane]

All of you red avatars need to decide whether you think tax cuts are good or bad.

False dichotomy. Not all tax cuts/hikes are the same. Don't be obtuse.

You're right. They're not all the same. This relates to a tax that actually funds a specific program.

The social security fund has been looted for decades so there is no point pretending payroll taxes are only used to fund social security and medicare. It's a question of who gets taxed. Due to this deal, most working people will have to pay 2% more while income taxes won't rise for those making even $350,000 a year. And a good bit of that income (even assuming it is from both spouses earning equally) is not subject to the payroll tax. Why don't the Democrats propose raising the cap on payroll taxes? Oh that's right, because they are pussies.

Sbane, you just can't resist embracing that most wrong headed notion that earned income should be taxed at a higher rate than non capital gain investment income, eh?  Punish the upper middle class on their earned income (those making 100K to 200K per year), and punish them some more! This notion is one of the dumbest ideas the Dem Left has ever had really.  Dumb!

When Social security was designed, 90% of income was taxed by the SS tax. Now it has gone down to 80% as there are a lot more people earning more than the threshold. Actually incomes rise pretty fast beyond that threshold because suddenly companies don't have to pay 6% on top of that. So why shouldn't the cap be raised to cover 90% of income again? Moreover, why shouldn't it just cover 100% of income? I can understand the fairness argument, but why doesn't it make economic sense? I don't know if you were trying to make that argument.

Oh, that is a different issue. The payroll tax is paid with after tax dollars, so when you get the money back, in theory you should only pay tax on the imputed interest earned over time, not return of principal. 80% is a pretty good approximation of the breakdown - 80% interest, 20% principal. If we make SS into a welfare program, paid our of the general tax fund, probably higher income folks should get nothing, and one gets gradually more as one's income goes down (with tax free income included this time for means testing purposes). If SS is means tested, there is no good reason to tax it at all - that is money just going out of one pocket and into another, and then back to the original pocket - from Tinker to Taylor to Chance.

Economics is just such a beautiful thing isn't it, and even more beautiful, is that I am quite talented at it really. 

What are you even talking about? This is a post of a lawyer's, not an economist.

What I am saying is that 90% of earned income used to be taxed by the payroll tax when it was first set up. Now it has gone down to 80% of income. Of course if we pretend that Social Security is not a welfare program then that additional income should not be taxed. But there is no reason to do such a thing. The fund has been used for Republican wars and other spending by both parties and so the payroll tax should be looked at as any other tax contributing to the general fund. Of course, the pretense of it being a retirement account is important in order to keep up it's popularity.

Torie, if you were trying to compare capital gains vs income, yes I don't think it is fair that people get to sit on their ass and make money either. In fact, haven't I ranted about that before? Still, as long as short term investments get taxed at the regular rate of income (and tack on payroll taxes on it as well), I am fine with a lower rate for long term investments. We do want investments in the economy, don't we?

So you think dividends and interest should be taxed at a lower rate than earned income for a given individual?  Anyway, if you want them all (excluding long term capital gains which ain't dividends and interest) taxed the same (makes sense to me), I guess what you are saying is that everyone should have their tax rate jacked up by about 7% or something. Man, are you turning into a tax revenue addict sbane? When did you so fall head over heels in love with such a robust social safety net?  Are you sublimating or something? 

I want high federal taxes and low state taxes. Those are the consequences of a federal system. And the feds should either fund state programs completely, like with the medicaid expansion, or at least heavily subsidize it. And yes, programs like Social Security and Medicare, especially Medicare, are very important. I don't support welfare without trying to force them to find some work (if they are able to), but I certainly do support Medicare. Indeed, I support a bismarck style system for all of us with companies competing against each other to lower insurance rates which we buy on an individual market. Subsidies help out the poor and the middle class afford those, and those are paid for by even higher payroll taxes which like the current tax would be levied on both employees and employers.