Monday, January 21, 2008

Wait a minute, I thought SS wasn't a "tax"

I have heard politicians, especially those on the left say over and over how socical security isn't a tax but a contribution. That is it's a contribution to the ponzi scheme, errr retirement plan from which we will benefit. Essentially their argument is whatever you put in, you'll get out when you're old. It's total bullshit of course for anyone under 40 since we all know we'll get $0. But aside from that, the argument for saving that beast is that it's not a "tax". It is sold by liberals as some kind of group annuity. How many times have we been told that SS is not a welfare program but a fair program where everyone gets out whatever they contributed in?

Fine. Then why is Chuckie Schumer saying this?

"If we did the rebate based on the payroll tax, it would hit a lot more people at a lower end of the spectrum. And so to just say income taxes are the only taxes we're considering that people pay is unfair," said Sen. Charles Schumer, the New York lawmaker who is chairman of the congressional Joint Economic Committee.

Whoa! Hold on there Senator. Those low end workers are not paying taxes, they are making "contributions" to their futures remember? Those unfair taxes you're babbling about aren't really taxes remember? So if you give people who are making "contributions" a tax rebate, I am guessing you will make that up by giving them less money when they're old right? After all in a "fair"system if they contribute less, they should get less.

Of course that is not the case. What Chukie is really doing is giving these people a tax rebate on taxes they are not paying. If they get $1000 reduced from their SS tax, that $1000 will still count when they retire. So the $1000 is being made up with general revenue money. What he is proposing is a simple welfare payment of $1000 to people who pay no income tax. He might as well just cut all these people a check for $1000 and save money on the accounting paperwork. Yet since many people don't even know what their tax rate is**, this proposal comes across to the Joe 6 Pack masses as favorite word of today....fair.

** I was actually told by a former co-worker that he doesn't need a tax cut because he gets a refund every year and so that means he pays no income taxes.

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