Currently Social Security withholding is capped at $109K. Obama will remove that cap, raising taxes on everyone making over $109K. Additionally, the employer half of that cap will hit every company with employess making over $109K, increasing the prices of goods across-the-board. And all self-employed people who pay both halves of the Social Security tax will see their taxes raised doubly. Add the increases on businesses making whatever the number is $150K, $250k, and the costs – and so prices – of everything they make or sell… rises.
Everyone who buys anything will pay for this tax increase.
What Democrats can’t seem to grasp is that corporations don’t pay taxes, their customers do. And this method of increasing taxes (on corporations) is extremely regressive.
If my prices for groceries per month go from $600-$700, that is a $100 increase against a six-figure income. If the groceries of a poorer family go from $500-$600 against in income of $50,000, they are paying a huge price for Obama’s tax burden. This is hugely REGRESSIVE… and I’m not even talking about the job-killing aspects of higher business taxes, or the facts of increasing flow of investment capital and companies off-shore to lower-tax environments. (Anheuser-Busch recently agreed to be bought by Belgian bewer InBev simply because corporate taxes would decrease as the company left America.)
If you are buying-in to Obama’s nonsense about stopping off-shoring of jobs – at the same time he is raising corporte taxes – you probably ought to re-think that, because it doesn’t work that way in this dimension.
For the sake of simplicity, let’s leave out gross and net(1) and net(2), etc., and just look at cost, price and profit. If I ran a business and decided to make a PROFIT of 20%, and my cost of goods sold was $100.00, I’d charge $120. Now if my taxes increase, say 10% to make the math easy, my cost of goods now is $110. If I still plan to make a 20% profit, my price will increase to $132. My customer now pays $132 for a product that – before corporate taxes were increased – cost them only $120. The CONSUMER pays the taxes, not the corporation. Obama and the Democrats can’t seem to understand this. See my continuing comments on teachers unions.
He also will let the Bush tax cuts expire. Those tax cuts hit everyone across the board, and their expiration will be, as I understand it, the largest tax increase in American history. Of course, Democrats don’t call this a tax increase – they call it a return to Clinton’s taxation. The fact of the matter, however, is that this will be an enormous increase. And Obama and 9% Nancy will add the Social Security tax above, and all kinds of other taxes.
From the Investor’s Business Daily to the WSJ, everyone with working brain cells understands what a disaster this will be to the American economy. Given the importance of our economy to the world – as in China cannot continue to grow their economy and move people from rural poverty to urban middle class without the American consumer – this will result in intensifying the global recession. Obama adds his version of Smoot-Hawley and we get Depression 2.0.
It isn’t hard to understand, but it does require A) some level of education and B) recognition that the media and Democrats are increasingly willing to sacrifice the freedom and liberty of this country to achieve their power aims.
Of course, this is how revolutions happen – the few elite take charge of information, bait the proletariat into overthrowing their productive class (the Middle-Class and Upper Class Investment class; the job-creators), then the masses (proletariat) put the elites into power, the Middle Classes are destroyed, everyone is poorer, and the elites and media continue to tell everyone the problems remain the result of the now-extinct Middle Class.
Go read Pravda in the 1960s-1970s if you want to see how this plays out.
So – Obama will move the tax increase not only down past $150K, but down past $109K, and down to everyone buying anything in America. THEN he’ll spend a new $800B that he can’t cover with current tax revenues. AND he’ll continue to complain about the deficit – which he’ll be running up (but which the past four Congresses – since the drunken sailor W came to power – have doubled), and paying the interest on that still continue to consume a greater and greater share of our GDP. And to top it all off neither he nor the Democrats seem able to grasp that when you reduce tax rates, tax revenues increase. Worked for JFK, RR, Bush 43. Works every time. And every time rates are hiked, tax revenues are lowered. This was pointed out to The Messiah in a debate but he quickly said raising rates wasn’t an issue of revenues; it was an issue of “fairness.”
This, of course, begs the question, “in whose eyes?”