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Monday, September 12, 2011

The truth behind Obama's Payroll tax break

~ Isn't "Trickle Down" just wonderful?

Last December as part of a massive compromise (or capitulation) to the Republicans, President Obama agreed to extend the Bush tax cuts for every working American including the Very wealthiest, an extension of unemployment benefits for those not yet reaching 99 weeks (though still not extending that final number) and a payroll tax 'holiday' where for 2011, employees could keep the taxes that would normally have gone to Social Security.

As part of Obama's "Jobs" program, would be an extension of said payroll tax for an additional year. This is supposed to make everyday Americans happy and go "Yay Mr President!" because they'll have a few extra dollars in their pockets now vs later.  Instead if everyday people truly understood what was going on, they'd be exclaiming in unison, "Hell, NO!" because the tax cut is the equivalent of giving people little breadcrumbs now and having no loaf to 'feed' on later.

In 2010, the payroll tax which each employee paid into Social Security was 6.5%.  The employer matched that to make a total of 13% paid into the program per worker. So for example, if your yearly salary before income tax was $40,000 then you and your employer would have each been paying $2,600 into your future retirement.  Because that money goes into your pocket instead, it means your employer is not having to pay the 6.5% either... thus Social Security s not receiving any of the money and becomes $5,200 closer to total insolvency, which is what many in Washington want.

In addition, because this tax break applies to everyone, including the Wealthy, it means a person making say $500k a year will get to keep $32,500.  Double that number since the employer is off the hook, and you now made Social Security $65,000 poorer.  The wealthier a person, the more he/she and their employer would have had to pay into the system to keep the program running, which is a double benefit to the wealthy since they wouldn't have been entitled to Social Security in the first place.


Simply put, Obama's plan is a godsend to hardcore fiscal conservatives.. it speeds up the bankruptcy and eventual death of Social Security, a program many in Washington call an "entitlement" as in "Who do you think you are to be 'entitled' to anything even though you spent your entire work life paying into it!"

But this really should be no surprise.  President Obama is not a True Democrat; he's a Wall Street-ite and all his economic policies are for the benefit of the markets and financial class.  We have economically (and militarily) in office, a third George W Bush term.

Let's look at the job-creation bill proposed last week.. a portion of the $450billion proposed I believe, being the extension of payroll tax breaks which was explained above, then more corporate tax breaks to give incentive to corps to hire (Pure 100% Reagan Republican, Trickle-Down economics; Corps already have amassed $1.5Trillion in banks which they refuse to use to hire), a further extension of unemployment benefits (still no extension beyond 99weeks) and hiring some people to build bridges and such.

What part of that plan would a Real Democrat propose if in office?

And it is this Fact, along with the swill representing the Republican nominees, which make Election 2012 so Deeply Depressing a prospect for so many good, decent people just trying to survive day to day.

1 comment:

  1. Payroll is a complex business and that is precisely the reason why many small businesses and organizations prefer to outsource their payroll to a specialist payroll company.

    Payroll

    ReplyDelete

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