Wednesday, November 28, 2012

The Growing Burden of Payroll Taxes

All taxes are burdensome, but the payroll tax hits most Americans, pay attention. Congress may debate taxing the rich, but when all is said and done the broad tax, the payroll tax, keeps climbing.

Owen Zidar writes in NYT:
Payroll taxes and corporate income taxes accounted for an equal share of federal tax revenue in 1969. By 2009, payroll taxes generated more than six times as much revenue... 
First, some background. The share of federal tax revenues coming from payroll taxes has doubled since the 1970s, to about two-fifths of revenue. The payroll tax, underwriting social insurance programs, nearly surpassed the individual income tax as the single largest source of federal tax revenue in 2009.

Since payroll taxes finance Social Security and part of Medicare, cost growth in these programs pressures policy makers to raise those taxes. In particular, pressure from the Social Security disability insurance program and Medicare Part A has been intensifying.

The number of disability recipients has increased nearly sixfold since 1970. Disability outlays exceeded revenues by roughly $34 billion in 2011. And costs are likely to continue growing because shrinking labor market opportunities for noncollege-educated workers are likely to continue well past this recession...

Pressure on the payroll tax from Medicare Part A is even worse. Health cost growth has steadily outpaced inflation, and the pattern shows no sign of abating.

And guess what, the payroll tax is the only tax that is certain to go up on January 1. It will impact anyone earning a wage: poor, rich or middle class. Most noteworthy, even though this tax supports Social Security and Medicare, both are headed for bankruptcy even with the tax increase. Your government central planners at work.

Keep those facts in mind, suckers.

3 comments:

  1. So they want small business owners to just take on "unpaid interns" and start making "business investments" in bitcoins, and then letting the "unpaid interns" manage these "business investments" as part of their responsibilities. Understood.

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  2. For every single dollar of payroll taxes paid by employees, the corporation pays the same (in actuality, the customers and clients pay the corporate income and other business related taxes and fees). And, if a person earning a high salary switches jobs during the year, both companies could get to pay the maximum FICA. As you said: "Keep those facts in mind, suckers."

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  3. Ya know this article is depressing...

    I'm late on my property taxes, recently got a job through a temp agency.. was unemployed for a year+, not on unemployment, I did odd jobs/used credit cards to fund the basics.. keep utilities on and eat.. put fuel in vehicle.

    Anyways, in debt now.. and their toward the end of my unemployedness... odd jobs dried up because winter was coming..so late fees on credit cards..

    The only positive thing is I am working fulltime now, getting overtime, trying to pay my debt down. But hell the way this article sounds, I may not have a job long enough to do so.. Its freaking depressing, it really is. I wish someone had a solid time frame on when the shits gonna hit the fan. Because I might know whether to just give up all together on paying my debt and just buy silver, food and ammo. haha.. *sighs heavily* Neal boortz was saying that were going to end up like Greece, with riots and crap.. eventually.. But when is eventually? If its five years from today I have hope.

    You know something that really annoys me, I'm just kinda rambling. Is the fact that the local, state, and federal government get a huge chunk of everyone one of my paychecks, so rather than that money go toward you know.. paying my debt off quicker, I've gotta deal with those assholes, in two ways.. taxes, them screwing over the economy, and THEY STILL GET PAID.. what a load of bull shit! *sighs heavily*

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