1. In off the record conversations, Democratic strategists insist that these temporary tax cuts actually represent one step in a multi-stage plan for permanent transformation of the tax system, achieving a sweeping redistribution of money and power. 2. Mr. Obama urgently demands that Congress slash tax burdens for some 40% of Americans (who pay nothing in federal income taxes) by approximately one-half: dropping the Social Security tax rate from last years 6.2% to 3.1% next year. A typical family earning $50,000 would surely welcome the chance to keep $1,500 more of their own money, but how would they feel if Washington erased that break in 2013? 3. Veteran observers know that proposed changes will prove no more fleeting than the last payroll cut to 4.2% from 6.2%--that the lameduck Congress cheerfully enacted in December, 2010. As the president noted in his joint session speech: If we allow that tax cut to expire-- if we refuse to act-- middle-class families will get hit with a tax increase at the worst possible time " 4. In other words, the new low rates in payroll taxes for every American household wont suddenly evaporate at the end of 2012; they will become permanent, shrinking revenues not by $240 billion in a single year, but by at least $2.4 trillion over 10 years. 5. Revenue reduction on this scale would swamp any combination of spending cuts and tax hikes cooked up by the Congressional Super Committee in November more than doubling the 1.5 trillion in 10 year deficit reduction they need to find. What could government possibly do to plug the resulting hole in its budget? 6. According to CBO projections, if all Bush tax reforms lapse in 2013 revenue will soar by $4 trillion over the next 10 years (compared to the relatively modest $700 billion increase if, as Obama publicly demands, only those earning more than $200,000 saw old rates return). 7. If this plan unfolds as the administration hopes, within 15 months President Obama will have achieved a fateful, historic shift of the federal tax burden from the highly regressive payroll tax to the sharply progressive income tax. The portion of federal revenue generated from Social Security payroll taxes (with their flat rate and cap of $106,800 in taxable income) will fall by nearly half while increases in the income tax burdens for everyone (with a new top rate of 39.6% and higher rates across the board) will more than cover all losses. 8. The overall result would mean those earning less than $50,000 (and paying more in payroll taxes than income taxes, if they pay income tax at all) would see major reductions in their tax payments. But those earning $100,000 or more would see burdens sharply increased-- with limited benefit from payroll tax cuts (which apply only to the first $106,800 we earn) but major increases in income tax on every dollar. 9.Remember, the return to across-the-board Clinton rates wouldnt just hit those earning more than $200,000. Income currently taxed at 10% would go up to 15%, money taxed at 25% would rise to 28%, and so forth. Success in this tax strategy could fundamentally change the nature of government. Nearly half our citizens already get more from Washington in benefits of various kinds than they pay in taxes. With even lower contributions in payroll tax from the 42% who currently pay no income taxes at all, those figures will soar. Government would cease to demand that every citizen provide some level of support for necessary operations and would become instead a mechanism for transferring wealth from the more successful (who will pay vastly more taxes) to the less successful (who will receive undiminished benefits, while paying even less into the system than they do today). 10. Mr. Obamas payroll tax holiday isnt an emergency measure that may or may not create jobs. Its part of a major reconfiguration of the tax system in a sharply more progressive direction. The GOP must respond immediately with their own restructuring plan, including sweeping reform and radical simplification. They should build on the presidents own Simpson-Bowles deficit commission, demanding lower rates for all combined with elimination of loopholes and broadening the base. What is Barack Obama's Long Term Game on Taxes? - Page 1 - Michael Medved - Townhall Conservative Medved's analysis is pretty scary....if you like the America in which you currently reside. I believe that most Amreicans see this, as well....November 2012 can't come soon enough.