Divided Thoughts over the Tax Deal

I find myself with oddly divided feelings about this whole tax deal making its way through congress. On the one hand, while extending the tax cuts which we’re already experiencing seems prudent, especially in a recession, piling additional tax cuts on top of those (especially the across the board 2% reduction in social security withholding) seems seriously unwise when our deficit is already the size that it is.

On the other hand, I could certainly use the extra $150+ per month in take-home income. As I look at moving bills and such, I keep thinking, “Well, if this passes my paychecks will go up soon.”

We routinely scorn politicians for being easily bought, but I’m feeling rather hungry for my pot of lentils myself about now.

9 Responses to Divided Thoughts over the Tax Deal

  • RL says:

    The reduction of the SS tax is insane and incredibly irresponsible. SS is in trouble as it is due to demographic and economic changes coupled with politicians doing things with it they shouldn’t. If the objective is to reduce taxes by two percent it should be done with income tax. If anything I’d like to see the the cap on SS tax removed in order to increase the sustainability of the system. I’d also like to see some creative ways of easing the SS burden like those Bush advocated. I’m not sure his suggestions were quite right, but I’d like to see something done in that regard.

  • American Knight says:

    There really is no actual difference in the nature of income taxes and payroll (FICA) taxes. FICA taxes are NOT segregated in order to provide Social(ist) Security benefits so they are really just general taxes given the impression of being retirement savings managed by the general government. Does anyone with any intelligence think that the feds have behaved as proper stewards of the American people’s retirement accounts? If an insurance company were to run its general account in this manner it would have gone bankrupt a long time ago and its principals and directors would be in prison.

    Any tax cut is a good thing because people get to keep the fruits of their own labor; however, basic accounting dictates that if revenue’s go down, expenses must be reduced by an equal or greater amount. You should never spend more than you bring in. The problem with debts, deficits and unfunded liabilities (promises impossible to keep) is the spending. Only God’s grace stopped another 1.2 trillion from being tacked onto to the already impossible debt, which has been created by the power-hungry politicians and the easy money of the bankers. Of course, we the people with our unending appetite for free stuff have to accept the blame as well. We get the leadership we deserve.

    The mere fact that government thinks that our wealth belongs to them and they allow us to keep almost half of it and consider it a ‘cost’ is ridiculous. Government is supposed to serve at the pleasure of the people, within proper moral constraints, not the other way around.

    Isn’t it odd that God only asks us to return 10% to Him and the government demands more than half? Something is terribly wrong here. We are being treated as slaves and now we are given the impression that master has given us a gift of one third of our payroll tax. Whose buying this?

    It is time for government to be reduced to pre-WWI levels and for us to tighten our belts, write off the fabricated debt owed to the Fed and make good on the actual loans (bonds) we have sold to legitimate investors. Unleash the power of innovation by becoming a business-friendly country and stop the corporate welfare.

    The solutions are pretty simple, the price to pay is high, but we have to pay for that which we have already collected if we are ever going to get out of this mess. Otherwise we will collapse and very, very soon.

    This so-called tax deal is bad. Tax rates should be set by Congress and made permanent until changed by a future Congress within the confines of the Constitution, which should be amended to limit how much Congress can spend as a function of how much real wealth we produce.

    This ‘deal’ is designed to put the responsibility on Republicans and following a short spring-time, the economy is going to crash and crash hard (your equity mutual fund 401(k) will lose half its value in 2011). Then Obama can say, see we tried the failed ideas of the Republicans, they forced me to compromise in order to extend unemployment benefits and we are now worse off. it is time to reject free-markets and opt for a command-economy, we have no choice. Socialism works if you have the right people running it, we’ve just never had the right people before and we are the people that we’ve been waiting for.

    Bye-bye Republic, welcome to the New World Order, one world, one government with no Western Superpower and that pesky remnant of Christendom. Now where is that Pope who is a thorn in our sides?

    Dramatic! Yes, sadly, that is were we are, but it is not too late to fix it, but time is short.

    BTW – with inflation (devaluation of the money unit) running higher than 20%, the ‘savings’ in the payroll tax and ‘extension of tax-cuts’ is illusory. We will all be less wealthy in 2011, in real terms.

  • American Knight says:

    A 4 point reduction (2 employer, 2 employee) is larger than an equal income tax reduction because there are NO deductions against FICA and there are deductions against income tax.

    This does not hurt the OASDI Ponzi scheme, it was broke as soon as it began. Let the people have their money now before it becomes worthless.

  • Joe Hargrave says:

    I agree with AK: it is simply criminal and outrageous that the government considers tax cuts as an “expense”, and wags the finger at those who want lower taxes as if they’re adding a burden to the budget. That is sociopathic madness.

  • Blackadder says:

    I have a more favorable view of the payroll tax cut. Given that unemployment is hovering around 10%, anything you can do to decrease labor costs is worth it. I would have preferred a reduction in employer-side payroll taxes to the employee-side reduction contained in the bill, but even that is likely to have a positive effect.

  • Teresa says:

    I wouldn’t classify this tax deal as “bad” but less than ideal. Been thinking – Can idealism get in the way of compromise and politicians doing what is good for the American people? Or can politicians strive for their ideals while compromising at the same time, without compromising their principles? Maybe, the GOP should have waited until the beginning of the new year to undertake the issue of taxes with the new congress? I believe that if the GOP had waited they would have been in a much better position to make the Bush tax cuts permanent and that they could have stopped the increase in the estate tax, which was increased from 0 to 35% because of this tax deal. That in itself is mindboggling to me how anyone could think that it was okay to tax a person’s property twice. PLus, this is another case of penalizing and discouraging wealth.

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