Tax Proposal

[jwoodie]

Leave income tax rates alone but lift the cap on Social Security taxes. Pros/Cons?

 

[jillian]

Leave income tax rates alone but lift the cap on Social Security taxes. Pros/Cons?

why wouldn't you restore taxes to where they were when clinton was president? we were booming and the economy was great and our budget was balanced.

seems to me that raising the SS cap disproportionately affects the middle class.

 

[jwoodie]

Leave income tax rates alone but lift the cap on Social Security taxes. Pros/Cons?

why wouldn't you restore taxes to where they were when clinton was president? we were booming and the economy was great and our budget was balanced.

seems to me that raising the SS cap disproportionately affects the middle class.

The current cap is $110,000 per individual, so I wonder how you define middle class. Further, lifting (eliminating) the cap would only raise taxes on earnings in excess of $110k. For high income earners, adding a 5.56% tax on earnings above this amount would result in approximately the same increase as Obama is proposing. Having employers match this amount would remove the current incentive to have fewer highly paid workers than hire new employees.

 

[PaulS1950]

So you would rather have more less qualified employees working at, say, Boeings, than the fewer number of highly skilled workers.
In other terms - you want employers to fire those who have been there a long time to hire more employees that will need training and get paid less...
Fire twenty well paid, highly skilled people to replace them with 29 or 30 lower paid less skilled workers that can't do the same job that the ones you fired could do and do well.
Yep! I bet a lot of employers will jump right on that. (one way or the other the businesses will close down because of taxes jumping or buisiness drops due to lost production and poor quality control)

 

[jwoodie]

So you would rather have more less qualified employees working at, say, Boeings, than the fewer number of highly skilled workers.
In other terms - you want employers to fire those who have been there a long time to hire more employees that will need training and get paid less...
Fire twenty well paid, highly skilled people to replace them with 29 or 30 lower paid less skilled workers that can't do the same job that the ones you fired could do and do well.
Yep! I bet a lot of employers will jump right on that. (one way or the other the businesses will close down because of taxes jumping or buisiness drops due to lost production and poor quality control)

My point is that there is a DISINCENTIVE to hire new employees because most employer costs are front loaded on each employee, such as SS, UI, DI and health coverage. If we are ever going to get out of our economic mess and start balancing the budget, we have to create jobs in order to turn tax eaters into tax payers. One way to do this would be to base employer costs on payroll rather than the number of employees.

I am not in favor of firing anyone, but I believe that the cap on Social Security taxes is an unconscionable regressive tax break for high income earners and their employers. Besides, how else can we justify restoring the irresponsible SS tax cuts on lower incomes?

 

[PaulS1950]

You can make it easier for employers to hire and expand their businesses by continuing to allow tax exemptions for businesses that do that. It is, after all a business expense and should be exempt from taxes - it always has been. If you want to limit it to those businesses that hire more and expand more in this country then I am all for that. If a business hires or expands outside the USA they should not get exemption for that. It is taking money from the programs in which they are supposed to be participating.

 

[jwoodie]

You can make it easier for employers to hire and expand their businesses by continuing to allow tax exemptions for businesses that do that. It is, after all a business expense and should be exempt from taxes - it always has been. If you want to limit it to those businesses that hire more and expand more in this country then I am all for that. If a business hires or expands outside the USA they should not get exemption for that. It is taking money from the programs in which they are supposed to be participating.

What "exemptions" are you talking about? If you are referring to business expenses, THEY REDUCE PROFIT. Businesses do what is most profitable: If it costs less to have existing employees (or contractors) do more work than it does to hire new employees, they will do the former in order to avoid the front-loaded costs associated with new employees.

 

[Old Rocks]

Leave income tax rates alone but lift the cap on Social Security taxes. Pros/Cons?

To solve the deficit will take an increase in taxes and a decrease in spending. And efforts to increase the income of the govenment through income increases in the wages of the working Americans.

A start would be to go back to the Clinton tax schedule. Contrary to all the predictions, the balancing of the budget with the increases in taxes and the decrease in spending under Clinton resulted the most prolonged boom times this nation ever exprerianced. Then adopt the Buffet Rule. If a man and wife raising two children with a combined income of 75K to 100K can afford to pay 30% or more in total taxes, so can the person making a million dollars a year.

Dramatically slash the so called Defense spending. Do we really need 800+ bases around the world? For what?

Spend more right here at home for infrastructure improvements and education for our citizens. Do you realize that even little South Korea is graduating more engineers than we are? Do you realize what that means in terms of our future competiveness?

Yes, lift the cap on SS. The 6.2 % that we pay should apply to all income.

Have a good look at what nations like Japan, Germany, and even little Costa Rica are doing in terms of a health system. They are getting far better results for a good deal less money, and covering all of their citizens.

 

[jwoodie]

Actually, we are so deep in deficit that no amount of tax increases or spending cuts is going to make much difference. The only way out of this dilemma is to drastically increase the number of employed people, which turns tax eaters into tax payers. How are we going to do this?

 

[PaulS1950]

It would take taxes equalling over $102,000 per person for two years with the government spending no money at all to pay off the $16,000,000,000,000 debt that we have today. Each year it will continue to grow by at least $3,000,0000,000,000.
In reality we can stop the growth of the national debt by cutting the budget by 33% but the debt will remain. If we cut the budget in half we can begin to pay the debt down but it will take hundreds of years to pay it off. Two presidential elections in the future we will have to default on the debt, nationalize all foreign business interests in the USA and pull US businesses out of other countries in order to survive as a nation. Triple digit inflation will cut your days earnings to nothing before your work day is over. The great depression will look like a dip in the stock market compared to what we will be going through. Martial law will be proclaimed and we will be living in a place where law and rights mean nothing to those in power.

 

[jwoodie]

Thanks for the pep talk! The only possible ways out of this mess are economic growth and/or inflation. At a minimum, there should be no COLAs or other per capita increases in any government expenditures until the budget is balanced. At this point, tax increases will only retard growth (and tax revenue), while massive spending cuts are politically, socially and economically untenable.

 

[Quantum Windbag]

Leave income tax rates alone but lift the cap on Social Security taxes. Pros/Cons?

That will help Social Security, a little, but do nothing for young families.

 

[jwoodie]

I am concerned with benefiting our country as a whole, not just particular segments of our population.