One Small Step Forward
August 24, 2007
The Wall Street Journal today has an opinion piece about taxes and revenue. It’s pretty standard stuff – they say the rich pay an ungodly percentage of total tax without telling us what percentage of total wealth belong to the rich. They talk only about the income tax, and ignore that other tax … you know, the one that ordinary people pay and the rich don’t, the one that most Americans pay more of than income tax itself … the payroll tax.
But wait – what’s this? In paragraph eight, just before they sign off, they say this:
The real bite on the middle class comes from payroll and state taxes; include them and their tax share rises relative to the wealthy. So yes, cut those taxes, too.
News Flash! The Wall Street Journal has acknowledged the existence of the payroll tax!
It’s small progress, but progress nonetheless.
August 24, 2007 at 7:42 pm
[...] Piece of Mind – Points out that the Wall Street Journal has taken a small step forward in recognising the way Middle Class people pay taxes [...]
August 25, 2007 at 3:52 pm
Grasping at straws again, eh, Mark? If the Wall Street Journal had referred to the “payroll tax” as the “FICA contribution,” nobody would have known what they were talking about, but that is the correct name of the tax.
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The Federal Insurance Contributions Act (FICA) tax is a United States payroll (or employment) tax imposed by the federal government on both employees and employers to fund Social Security and Medicare—federal programs that provide benefits for retirees, the disabled, and children of deceased workers.
–Wikipedia
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Still, I’m all for getting rid of the “payroll tax,” because that would be the quickest way to get rid of Social Security and Medicare.
August 26, 2007 at 8:54 am
Mr. Technics, for reasons unknown, your comment was thrown into the “moderation” bin. We don’t moderate. Either WordPress is acting up, or it’s annoyed that you use so many names.
The “employer share” of the payroll tax is in reality a hidden tax on the employee. The effective rate of taxation is 14.2%. Check out the self-employment tax sometime – Federal Form SE, to see the math. The money collected is thrown in to the big pot called “General Fund”. It is no more dedicated to Social Security and Medicare than your earnings being “dedicated” to your mortgage. That’s for show.
Other than your missing that element of the debate, your FICA point is a small one. Yes, I’m familiar with the terminology. I’m intimately familiar with the tax – it is and is meant to be the great tax on the working class. It goes without notice by most tax experts, who focus exclusively on the income tax.
Anyway, test me. Bring it on.
Your attitude about Social Security and Medicare are radical and destructive.
August 26, 2007 at 3:06 pm
I did not write as “Zardoz.” I think the confusion with my name is due to the fact that I have no control over who uses my IP address, as it is a rented address ($24.95 per month).
I really have no interest in the subject of taxes. I do fill out a Form SE every year because I am a sole proprietor, but it is my understanding that money goes to my Social Security and Medicare accounts. Where the money actually goes is just a bookkeeping problem, anyway. I mean, it all goes to the government—income and self-employment taxes—and they can move it around internally anyway they want. But it makes no difference to me if the money goes into a general fund so long as my Social Security benefits keep building up and are paid as promised.
Also, I do not really look at the dollar amount of my total tax bill. All I care about is what is called my “effective tax rate.” I think something around 10 percent is fair.
August 26, 2007 at 9:20 pm
You’re probably paying 25-29%. But hey – as long as they’ve got you thinking you only pay 10%, we’re cool. Aren’t these tax people clever?