Government Spending

Why Not Abolish Payroll Taxes Altogether Instead of Screwing Around With a Short-Term, Low-Percentage Cut?

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So the House hath rejected the Senate's genuinely useless payroll tax cut plan. Here's what the World's Greatest Deliberative Body (read: League of Ordinary Gentlemen) proposed:

The Senate's short-term, lowest-common-denominator approach would renew a 2 percentage point cut in the Social Security payroll tax, plus jobless benefits averaging about $300 a week for the long-term unemployed, and would prevent a 27 percent cut in Medicare payments to doctors. The two-month, $33 billion cost would be financed by a 0.10 percentage point hike in home loan guarantee fees charged by mortgage giants Fannie Mae and Freddie Mac, which the administration says would raise the monthly payment on a typical $210,000 loan by about $15 a month.

You got that? In order to pay for a FICA tax cut, they would ding homeowners. The House had passed legislation that was slightly different in terms of paying for the continued payroll tax cuts but mostly different in that it extended the cut through the end of the fiscal year:

The House passed a separate plan last week that would have extended the payroll tax cut for one year. But that version also contained spending cuts opposed by Democrats and tighter rules for jobless benefits.

Both the House and Senate bills included a provision designed to force Obama to make a decision on construction of the controversial Keystone XL pipeline, which would deliver up to 700,000 barrels of oil daily from tar sands in Alberta, Canada, to refineries in Texas. The provision requires him to issue the needed permit unless he declares the pipeline would not serve the national interest.

There is no reason to believe that the payroll tax cut has been job-creatin' or stimulative in any meaningful sense of the words. Yes, it's better to pay less in taxes but absent any cut in Social Security benefits, we all know that the current reduction simply means higher taxes (and/or bigger benefit cuts) down the road.

Here's an idea: Let's stop the fiction of "payroll taxes" altogether. FICA taxes are sucked out of every dollar of earned income from dollar one through around $110, 100 (starting in 2012); they are split between employer and employee and the total comes to a touch over 15 percent. Ostensibly, these funds go to cover Social Security and Medicare. But that's not really true in either case. Social Security's "trust fund" has been raided for a very long time to pay for general government outlays and, more recently, doesn't provide enough cash to cover day-to-day expenses anyway. The funds collected for Medicare were never intended to cover the full costs of that program and they just keep falling far shorter every day.

Let's be adult and admit that "payroll taxes" are just another form of income tax; it's a mental dodge to pretend call them by a different name. If they were named accurately, perhaps it would allow us to discuss spending more accurately too. If we want a payroll tax "holiday," then why not actually kill the taxes altogether? What sort of vacation from reality are we getting by trimming 2 percentage points anyway? What a strange time for a government that borrows more than 40 percent of every dollar it spends to miser out!

And let's be even more adult and try not to spend more than we're willing to pay for. I'm not even being brave or super-principled in suggesting that. The bill's going to come due some day and it's not going to be any easier when we're older. As we've shown here at Reason, it actually wouldn't be that tough over the next decade or so to bring revenues and expenses in line with one another. Indeed, if we kept spending to 19 percent of GDP (more than it was at the end of the Clinton presidency), outlays and revenue would match up. It requires small (3.6 percent) year-over-year cuts from a federal tab that has basically doubled over the past decade-plus.

I know it's nuts to suggest that the government, like living, breathing human beings, should live within its means, but it's really all I want for Christmas.

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103 responses to “Why Not Abolish Payroll Taxes Altogether Instead of Screwing Around With a Short-Term, Low-Percentage Cut?

  1. Oi Vey, I Say!

  2. Why Not Abolish Payroll Taxes Altogether Instead of Screwing Around With a Short-Term, Low-Percentage Cut?

    Because it’s more fun this way!

    1. Exactly! And people might move on to other issues – like the non-existent budget.

    2. It’s certainly what I propose (and what Mitt Romney supports).
      Pass an Amendment abolishing the 16A and specifically forbidding the collection of income taxes, institute a fixed national sales tax rate on all items except food, housing, health care and transportation, and impose a balanced budget requirement.

      Problem solved.

      1. no execptions. sales tax on everything otherwise you create a lobby industry.

        1. Good. Create one then. Tying the tax to a balanced budget means that every tax break you give out comes at the expense of a government expenditure. Soon, all we will have is border security and national defense.

    3. Instead of eliminating, how about just include an opt-out?

  3. “Am I the only one who would have respected them more if only…”

    men are always saying that to twins; albeit female sets but of course, there is NWWT

    1. Re: rather,

      These men were librarians, I fancy – otherwise, how would you know?

      1. I am going to take a Zach Morris time-out on arguing with you to ask: What is the deal with the librarian thing vis-a-vis rather?

        1. Re: Rev. Blue Moon,

          What is the deal with the librarian thing vis-a-vis rather?

          Well, about 2 or 3 weeks ago, during one of those times when rather had the urge to make a really stupid point (for which she has a penchant) she said that it would not be worth it to date a man that does not read or have books. So if you do a reduction ad absurdum, I argued that she would have to whore only with librarians to fully comply with her standard.

          Hence: She likes to whore with librarians. QED.

          1. OM, lacks the subtlety necessary to understand reading H&R comments. The story was on John Waters and his own quote

            http://www.goodreads.com/quotes/show/399629

            1. Re: rather,

              OM, lacks the subtlety necessary to understand reading H&R comments.

              That’s probably because I am not a librarian like the ones you want to whore with.

              1. some days I think your helle…Have you ever donated to a spooge bank?

  4. the answer to the article’s question is obvious – because it’s all bullshit. Without the gamesmanship, obfuscation, trimming around the edges, and other activity disguised as action, Congress would have to actually do its job.

    The Senate that passed this “momentous” measure is the same Senate that has not passed its version of a budget in three years. A two-month extension serves primarily to set up the next act in this odious political theater.

  5. Let’s be adult and admit that “payroll taxes” are just another form of income tax;

    But it’s a fair tax that everybody pays. Just ask Rev. Blue Moon, who seems not to mind any kind of disgusting act of aggression so long as it has the adjective “fair” next to it.

    1. But it’s a fair tax that everybody pays. Just ask Rev. Blue Moon, who seems not to mind any kind of disgusting act of aggression so long as it has the adjective “fair” next to it.

      Wow. I never, ever said that, you blistering moron. What I said is that you were knowingly equivocating and distorting the use of the word “Fair” in order to misattribute arguments to those you wanted to criticize.

      And here I see you are just flat-out lying. Quote me just one time saying that I don’t mind “aggression” so long as it is fair and/or equitable Quote me one time or apologize right now.

      1. Re: Rev. Blue Moon,

        What I said is that you were knowingly equivocating and distorting the use of the word “Fair” in order to misattribute arguments to those you wanted to criticize.

        No – YOU were the one that put his big nose on a point I was making, that there’s nothing “fair” about thieving. We ended up in a meaningless discussion all early morning about nothing, which made me think you had ulterior motives.

        Hence, my contention that, as long as it is “fair”, it’s ok with you.

        1. We ended up in a meaningless discussion all early morning about nothing, which made me think you had ulterior motives.

          Hence, my contention that, as long as it is “fair”, it’s ok with you.

          In other words, you are a lying sack of shit, an apparent mindreader, and butthurt that your “clever” little Anarchist talking point got demolished.

          Poor baby – maybe you can call Mommy Cita and she’ll rub your tummy and tell you how “clever” you are.

          1. Re: Rev. Blue Moon,

            In other words, you are a lying sack of shit, an apparent mindreader, and butthurt that your “clever” little Anarchist talking point got demolished.

            That’s what I like about you, Rev: your witty repartee. By the way, if you read the post carefully, I say “seems not to mind.” I’m not quoting you verbatim, silly; only that it looks like you are OK with any kind of disgusting transgression as long as the transgressor calls it “fair.” That was the point I was making about Johnson’s usage of the word ‘fair’ to justify gross thieving (what you would call with a very sick sense of humor ‘taxation’.) It would be the same as saying “Fair First-Born-Slaying.”

            1. I say “seems not to mind.” I’m not quoting you verbatim, silly

              “Now, I am not quoting him verbatim, but it seems that Old Mexican likes to fuck sheep.”

              There – that seems fair.

              1. Oh! Oh! Oh! You got me there! Oh! Except, of course, that there’s evdence to back up what I am saying, if anybody cares to look.

                1. “Now, I am not quoting him verbatim, but it seems that there is evidence that might make it look like Old Mexican has a giant cache of child porn. Don’t believe me – there is ‘evidence’ if anybody ‘cares to look'”

                  1. That’s a good one, but like rather, I’d rather whore with librarians – of the female kind. A “You Got Mail” fetish I have.

  6. In order to pay for a FICA tax cut, they would ding homeowners.

    Oh, and here MNG was gloating that the tax cut’s failure was somehow the Republicans fault alone…and didn’t involve a “revenue increase” anywhere.

    1. Look, he has studied–extensively–the tax cut disparity in this country, especially between Democrats and Republicans. And he makes more money than you, so, well, uh…you’re wrong?

      1. WHERE ARE THOSE FOUR SENTENCES YOUNG MAN??!

      2. Look Epi, if you were not such a hyper partisan little green footballs reading Republican hack, you would see MNG’s genius.

        1. The LGF thing has gone from annoying to bizarre. I mean, what is that guy’s obsession with that place?

          I like it that he’s on this talking point of “Awww man, this place used to be WAY cooler when [antediluvian commentator #1, 2, and 3] was here!” It reminds of a hipster talking about how much better the Beatles were with Pete Best.

          1. He used to be on a Hanity kick. I honestly didn’t know who the fuck Hanity was when he first started. But he was convinced I never said anything unless I heard it from Hanity first. So fucking tiresome.

        2. Charles Johnson is crazier than a runover dog. I haven’t been on that site in at least 6 years now. Dude went from funny to nuts in about no time flat. Sad, really. LGF used to be a fun site before he turned it into an echo chamber of crazy.

          1. LGF was great during Rather-gate (even though Johnson wasn’t the one who originally broke that story, I believe it was some Freeper who noticed it).

            But the minute LGF got that fame, CJ became a first-class douchebag really fast–it wasn’t so much about GWOT issues or anything else, it was about CJ fishing for compliments by pandering to his audience, which grew increasingly left-wing as 2008 got closer. (A similar transformation happened at Balloon Juice around 2005, when John Cole was finally so overwhelmed by left-wing commenters he gave in and became a Team Blue cheerleader instead of a Team Red one.) I stopped reading that site in 2002 or 2003, just because the constant Muslim-bashing and CJ-fellating was so tedious. And it wasn’t any surprise at all when CJ migrated back to his left-wing roots in 2008.

  7. This argument commits the argumentum ad adulthood fallacy. This is an often used fallacy popular in use because so many assume a mental state of adult like behavior to those above a GS-11.

  8. There is no reason to believe that the payroll tax cut has been job-creatin’ or stimulative in any meaningful sense of the words.

    Repeat after me:

    SPENDING DOES NOT STIMULATE THE ECONOMY. INVESTMENT DOES.

    Altogether now!

    SPENDING DOES NOT STIMULATE THE ECONOMY. INVESTMENT DOES.

    1. Don’t even say that. Trust me, when they say “investment” it is not what you think it is.

      1. Re: John,

        Trust me, when they say “investment” it is not what you think it is.

        It’s not even what anybody else would think it is! I totally agree, but using the correct meaning of the wrods, what government calls “investment” is really simple spending.

        1. hat government calls “investment” is really simple stealing.

          Fixed it for you.

          1. government spending, government stealing… tomahto, tomayto.

            🙂

  9. Yes, eliminate payroll taxes, increase income tax rates (or preferably replace the whole system). I’m sure the poorest quintile would rather pay a 2% income tax rate, for instance, than an 8% (or more if you count employer contributions) payroll tax. Trickle down economics is bad economics – the poor are more likely to spend any additional money they keep directly into the economy than the wealthy.

    Also, this ends the pretense of Social Security as a program we “pay into” as it is now combined with the regular budget and revenue stream.

    1. How do rich people avoid spending money “into the economy?”

      1. We “invest” it, you simpleton.

      2. I’m not saying they’d avoid it, I’m saying that poor people will be more likely to spend it directly on goods where rich people are more likely to buy CDs and low-risk bonds. Those things still help the economy, but the stimulative effect is not as strong, and it doesn’t really trickle down to the poor.

        1. and if poor people CHOOSE to spend their money on goods, why is this a bad thing? And if they have money to willingly spend on goods, have we not redefined the meaning of poor?

          “Trickle down” has become a meaningless phrase to reflect reality – someone who puts money at risk and sees the move pay off will spread that benefit to others by expanding the business, hiring, increasing business with vendors, or buying things for him/herself.

          1. “Trickle down” has become a meaningless phrase to reflect reality – someone who puts money at risk and sees the move pay off will spread that benefit to others by expanding the business, hiring, increasing business with vendors, or buying things for him/herself.

            But the 8%+ more income taken home y the poor will be more likely to be spent on goods that increase the profits for companies immediately as opposed to increasing liquidity for investment to increase potentialy profits later down the road. My argument is that for economic stimulus, equity or bond investment and expanding bank credit is not as directly or immediately beneficial to the economy (or the poor) as increasing profits by motivating the most likely spenders to spend or pay off debts.

        2. Yes, and when they buy CDs and bonds, the money then vanishes, never to be spent again.

          1. I didn’t say that. I said it is less direct and less stimulative than directly increasing profits by increasing sales. Also, that very little actually “trickles down” to the poor as claimed. The Laffer Curve is not a serious economic concept, it is a political maneuver.

    2. Get rid of income taxes. Get rid of payroll taxes. Institute a national sales tax and there ends the theft.

      1. How does confiscating 23% per transaction “end the theft”?

        1. 23%? I was thinking more like 7-8%. And the tax is not charged on any food, housing, health care or transportation (or anything that relates to any of these) item. All items to be taxed are purchased by choice (meaning public education gets taxed the same as private institutions), therefore no theft. And there can be no tax on items bought abroad and imported.

      2. What happens to a businessman that decides not to collect the national sales tax?

        1. What happened to the businessman that refused to collect the payroll tax? Or the one who got caught cheating on his income taxes (excluding those with connections in the DNC)?

          1. So then you’re saying that the national sales tax would be backed up with the threat of force?

            If so, then the national sales tax (or any tax) is not acceptable in a free society.

            1. At some point, order must be maintained. And force is required to maintain it. It’s the cost of living in a civilized society. I know that won’t play well here, but it’s been a fact since Adam and Eve.

              1. Yep, we should totally base our assumptions about what is or is not needed in society based on God punishing two people for some bitch being connived by a snake-oil salesman.

                I mean, being kicked out of paradise seems like a totally proportionate and rational punishment for eating an apple, no?

                1. Um, let’s see:
                  God grants you paradise. Gives you only one rule. Just one! And you break that rule?

                  Only getting kicked out of paradise was like being given unsupervised probation. I would imagine Allah would have smote them on the spot.

              2. So you think chaos will reign if the sales tax isn’t collected and the government has to step in to maintain order?

                And force is not the “…cost of living in a civilized society.” Force is the antithesis of civility.

  10. I actually think we should keep the payroll tax, as follows:

    (1) Eliminate the “hidden” employer share of the tax. Make it all visible the employee/voter.

    (2) Get rid of the income cap on SocSec. It only preserves the fantasy that this is a quasi-pension program.

    (3) Set the amount of the tax annually at a level sufficient to completely fund all federal welfare programs – SSI, Medicare, Medicaid revenue sharing, unemployment comp, everything.

    That way, these programs aren’t digging us into a debt hole anymore, and the taxpayers will know exactly how much these transfers programs actually cost. Increases in welfare will now carry a political cost, and cuts in welfare will have a political benefit, as they will have an immediate and direct financial impact on the taxpayers.

    1. I think (3) is no way no how going to happen, but (1) and (2) seem only logical. You’d think Democrats would push (2) instead of other new taxes.

    2. Why do (2) at all? It just adds to the amount SSA has to commit to said person in the future. You can argue that the commitment isn’t real, and you can argue that the commitment is only up to a cap, but then why play the fucking game at all?

      Just fund the shortfall from the general taxation. At least I am able to apply deductions (and losses) to that amount, I cannot apply any deductions to FICA.

      1. I’ve pointed this out to left-wing commenters here that have made the same claim–yeah, it might *seem* fair to put the tax on all payroll income, but that will do nothing more than add to the final payout amount that’s owed. It would be shoring up the payouts on the front end, only to get screwed later down the road on the back end once the payments came due.

        And if the government decides, “Well, you’ll pay on all income but only see a return based on the $110K cap,” how is that fulfilling the “social contract”? Even with the TRAINZ and ROADZ, the wealthy can see some benefit from those taxes because they use those services to a greater or lesser degree. “We need more; you have more” isn’t going to be a winning argument here.

        And quite frankly, if you can’t save up a decent retirement nest egg on $110,000 or more a year, then no amount of government moneys is going to make you more fiscally responsible in your old age.

        1. “yeah, it might *seem* fair to put the tax on all payroll income, but that will do nothing more than add to the final payout amount that’s owed.”

          That’s the naive thinking of an honest man. The people advocating subjecting all income above the cap to the payroll tax have absolutely no intection of giving the extra benefits that should be commiserate with the higher total taxes paid.

  11. The thing that bothers me is that now the Feds are raising taxes via Fannie and Freddie. They’re never going to be off our books. Ever. The politicians have found another revenue generating tool, one that owns 90% of the housing market.

    Given that market share, this fee is almost the equivalent of a federal parcel tax.

  12. Let’s be adult

    You know who else was an adult?

    1. Benjamin Button? (I think?)

    2. Half the AV stars?

    3. The students on Glee?

      1. Only in the physical sense.

  13. Ultimately, the lefties want to heap the cost to fund the social safety net onto the rich. At the same time, they want to bitch and moan about the rich having more influence over politicians, than the average Joe.

    Sorry, but you can’t have it both ways. If someone is paying a disproportionate amount of money to fund the government, at the very least, they deserve to have a bigger say as to how that money is used.

    1. If someone is paying a disproportionate amount of money to fund the government, at the very least, they deserve to have a bigger say as to how that money is used.

      “Deserve a bigger say”, indeed! That’s injustice, straight up. We are all equal under the law.

    2. Sorry, but you can’t have it both ways.
      ———————–

      come on, now; our political system absolutely depends on having it both ways.

  14. Clearly we do not have a spending problem. http://www.kansas.com/2011/08/…..oblem.html

    1. current revenue levels, compared with the size of the overall economy, are further below historic levels than spending is above them.

      1) Half the country not paying taxes; and 2)Unemployment.

      1. Yeah, it’s funny how he leaves out the unemployment rate and employment-to-population ratio there. Nor does he mention that deficit spending is 10% of GDP.

      2. Also noticed this:


        Take away these two categories, and general government spending ? including the military and interest on the national debt ? is lower than it was 50 years ago, or 30 years ago…
        In the 1960s, the 400 taxpayers with the highest income paid over 40 percent of their income in federal income taxes.

        In the 1960s, the Great Society hadn’t gone full-bore yet–hell, for the first half of the decade it didn’t even exist.

        Spending on a per-capita basis was also far lower in the 1960s, both in real and inflation-adjusted terms. But you won’t see him mention that, either.

  15. I think I’ve had just about enough of anyone saying that a cut needs to be paid for.

  16. “I will gladly pay you Tuesday for a hamburger today.”

    1. We have truly become a nation of Wimpys.

  17. In my opinion the title “Social Security Trust Fund” (SSTF) is misleading — a better title would be “America’s Pension System”. I will do everything I can to make sure that “America’s Pension System” is there for my children and grandchildren. Since 2000 our Politicians have been neglecting the SSTF and even worse, taking actions that degrade the SSTF. George W. Bush wanted to replace the pension system with “private savings accounts”. Barack Obama is reducing the Payroll Tax contributions to this pension system. I encourage every American to educate themselves about out SSTF and then decide whether or not we want to continue “America’s Pension System”.
    I have done exactly that and am a firm supporter beleiver in restoring the Payroll Tax and taking additional measures to repair the neglect that has been happening since 2000.

    1. Your bizarre fealty to a Ponzi scheme notwithstanding, SS is unsustainable as it is right now. Look at the projected liabilities – this was set into motion as soon as SSA was passed, not in 2000.

    2. this “pension system”, as you call it, was created to kick in at age 65. At a time when life expectancy was 63.

      SS was never meant to be the national pension system. And the neglect predates 2000. Remember AlGore and his babbling about the ‘lock box’? Everyone knew there was no such thing, that SS money was being diverted into the general fund.

    3. I don’t think you’ve studied as closely as you think you have. There is no way you could possibly support the status quo of SS if you had.

    4. The unified budget process was a LBJ-era innovation. It did not start in 2000.

    5. Obama is reducing the Payroll Tax contributions to this pension system.

      Hey there. You might be interested in this:

      (2) TRANSFERS TO SOCIAL SECURITY EQUIVALENT BENEFIT ACCOUNT- There are hereby appropriated to the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1(a)) amounts equal to the reduction in revenues to the Treasury by reason of the application of subsection (a)(2). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Account had such amendments not been enacted.

      Or in human English, the payroll tax “holiday” is money borrowed from the Treasury.

      Cans kicked down the road, shit rolled downhill, etc.

  18. I still can’t see the Libertarian opposition to a sales tax. You people are willing to miss out on the good because you seek the perfect, and that’s just not realistic in the real world.

    I will repeat it again: Repeal the 16A and institute a National Sales Tax at a fixed rate. Any and all items related to food, transportation, health care and housing will be exempt from the tax. And as a sop to Libertarians, we should tax all education, whether it is public or private, at the same rate. Education is optional, whereas the items I exempted are pretty essential for survival.

    1. Oops, I wasn’t done. Anyway, tie it to a balanced budget amendment and it sails through the Amendment process. It could be done in two years at the moist.

      1. Your idea has merit, but it doesn’t have a snowball’s chance in hell of ever getting approved, so it’s a waste of time to discuss it. We have to focus on ideas that are more realistic.

    2. ” Any and all items related to food, transportation, health care and housing will be exempt from the tax”

      I can’t wait to see all the lobbyists spending money to convince congress to label iPods as healthcare, etc. etc.

      This plan is just rearranging deck-chairs my friend.

      1. Florida already has this problem. Newspapers are exempt from sales tax but weeklies aren’t. Haircuts, exempt. Nails, taxed. Accountants don’t have to charge sales tax for their services, etc. I can only imagine how much graft the Feds would get into.

    3. I think in Texas the only items exempt year round are food, medicine, and newspapers. There doesn’t seem to be too much confusion over the system here.

      1. Yeah, but it isn’t all food. My goddamn hostess chocolate donuts still get taxed, the fuckers.

        1. Then that’s not right. Again, like I said below, let the cronyism flow freely. Every item added to the tax-exempt list is another government program they are forced to cut. At some point, vital services like border security and national defense are all we will have left in the federal government.

  19. Any and all items related to food, transportation, health care and housing will be exempt from the tax.

    Why?

    If you really want to do this, the only way to make it work is by exempting nothing.

    1. People have to eat. People have to have a place to live. People have to have medical care. People have to have transportation. These things are necessary for survival. Taxing them is just morally wrong.

      Everything else, on the other hand, is purchased by choice. This prevents poor people from crying foul.

      And the more lobbying for exemptions, the better as far as I’m concerned. Remember, that it’s tied to a balanced budget. So for every favor they dole out and grant tax-exemption, they’re gonna have to cut the same amount of money from the government’s expenditures.

      In this scenario, cronyism actually works for the citizenry, not against it.

      1. People have to eat. People have to have a place to live. People have to have medical care. People have to have transportation. These things are necessary for survival. Taxing them is just morally wrong.

        To what extent is medical care “necessary for survival”? Does that mean any and all efforts to keep someone alive should be made, even if it means a drain on the country’s or the individual’s financial resources? Does it mean that someone should receive full treatment at all times for, say, cancer, regardless of the extent of the illness or the prognosis for recovery?

        Or is it limited to “preventative maintenance”–i.e., if you follow a doctor-proscribed diet and don’t turn into a human aircraft carrier like Michael Moore or Melissa McCarthy, don’t smoke, don’t drink, don’t huff Elmer’s, get annual or semi-annual checkups, and are treated just for things like broken bones and infectious diseases?

        And what about food, since it’s related to health? Is that pile of crap from McDonalds considered as necessary for survival as the plate of rice, baked beans and side of spinach? If not, do we really want government determining who gets “most favored food provider” status?

        As far as housing, why should someone who bought a 3,000 square foot, $500K house on an ARM be treated the same as someone who took out a 20-year-fixed rate loan on a 1,200 square foot home for $130K? Is the 3,000 square foot home any more necessary for survival than the 1,200 square foot home?

        Don’t get me wrong, I’m not opposed to your VAT idea as an overall principle. Some taxes are necessary to keep basic services and infrastructure in place, and I don’t think you’ll see very many people here argue otherwise. A tax on consumption is extremely fair, as it leaves the amount of taxation entirely up to the person consuming–the more you buy, the more tax you pay. But unless those taxes are applied across the board, there will be too many “exceptions to the rule” and crony capitalism sanding the bureaucratic gears.

      2. Taxing them is just morally wrong.

        So, no more taxes on hotel rooms? That’s a big earner for a lot of cities. And we collect sales taxes on cars, too.

        And no taxes on restaurant meals?

        What counts as health care? Will my mouthwash be taxed, unless its one of those whitening deals?

        Won’t work with those exemptions. You’ve just created a huge bureacracy, tons of graft and influence peddling, unspeakable complexity, and (the cardinal sin) narrowed the tax base.

        This prevents poor people from crying foul.

        The fundamental problem with our current income tax system is that so many people don’t fell the pain. Taxes should be painful. Its a feature, not a bug.

  20. Why not impose a 10% charge for the Fannie and Freddie guarantees?

    We all know that tax increases don’t influence taxpayer behavior. And, even if it does, it would put Fannie and Freddie out of business, which is much to be desired.

  21. There is a solution already before Congress. It’s known as HR-25 the FairTax,and would exempt necessities through what is called the prebate. It taxes consumption above the poverty level at a rate of 23%. Thus for a family of 4 spending $58000.00 the tax rate would be 11%. Read more about it at ; http://www.FairTax.org.

    1. Oh, and I didn’t say, it isn’t an added on tax. It completely replaces all taxes on income, both personal and corporate, does away with inheritance taxes, the alternative mininum tax and FICA taxes. This leaves Congress without tax lobbyist influences!

  22. Extending the payroll tax cut would be a big mistake and many
    economists including Bruce Bartlett agree that it is not the best thing for our
    economy. http://eng.am/qu39cL

    The biggest problem with the payroll tax cut is that it is
    not targeted to those with the most need. Yes, people with relatively low
    income will spend their extra money, but wealthy people who would also receive
    the tax cut will just save their money. http://eng.am/uvIDMJ

    Also, promoting continued reduced payment into Social Security
    is the same as telling people it’s a good idea to borrow from their retirement
    and spend the money now.

    Partisan Politics might make extending the payroll tax cut
    the only option to spur consumer spending, but it doesn’t make it the most
    effective option.

  23. Extending the payroll tax cut would be a big mistake and many
    economists including Bruce Bartlett agree that it is not the best thing for our
    economy. http://eng.am/qu39cL

    The biggest problem with the payroll tax cut is that it is
    not targeted to those with the most need. Yes, people with relatively low
    income will spend their extra money, but wealthy people who would also receive
    the tax cut will just save their money. http://eng.am/uvIDMJ

    Also, promoting continued reduced payment into Social Security
    is the same as telling people it’s a good idea to borrow from their retirement
    and spend the money now.

    Partisan Politics might make extending the payroll tax cut
    the only option to spur consumer spending, but it doesn’t make it the most
    effective option.

  24. People have to eat. People have to have a place to live. People have to have medical care. People have to have transportation. These things are necessary for survival. Taxing them is just morally wrong.

    As I already knew, you’re a fucking moron.

  25. many economists including Bruce Bartlett agree

    Another fucking moron rears his head.

  26. You got that? In order to pay for a FICA tax cut, they would ding homeowners.

    Why not just stick with the original plan? Pay for it out of the general fund, the Treasury just borrows more, the debt increases, and the dumbshits who are permitted to vote will have been successfully bribed with the money from their own pockets.

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