February 26, 2012

Romney makes his plan official: Skin the Middle Class (so that the 1% continue their free ride)

Romney has the chutzpah to make explicit who he expects to pay for his plan to continue the free ride for the 1% (with lower federal tax rates than Warren Buffet's secretary pays).

Romney (as with all the Republicans) continues to ignore the shameful reality that the historically unprecedented & unsustainably low tax rates paid by uber-rich plutocrats (even in the face of multiple wars) has been possible only by means of stealing the Social Security surpluses accumulated by working & middle class Americans.

Romney also ignores the reality of the highly regressive nature of our current combined income and payroll tax system:

The net effect of using payroll & self-employment taxes for general expenditures is a HIGHLY REGRESSIVE tax system:

This can be illustrated by the fact that the highest marginal tax rate if felt by middle class Americans with combined family income of under $106,800/year. This middle class American pays a marginal income tax rate of 28%, plus FICA tax of 12.4% (whether this is paid as a 12.4% self-employment tax, or as double 6.2% deductions from wages, the tax burden is identical) and Medicare tax of 2.9% on his/her entire income, for a total federal marginal tax rate of 43.3%.

Meanwhile, those in the supposedly top tax bracket (earning over $373,650/year in regular earned income) pay a marginal income tax rate of 35%, but have a 2.9% Medicare tax and zero% FICA tax on income over $106,000, thus yielding a total federal marginal tax rate of 37.9%.

(And at the same time, interestingly, an American trust fund baby with an income of $1,000,000/year consisting totally of long term capital gains pays a 15% capital gains tax, zero FICA tax, and beginning in 2013, a 3.8% Medicare tax, for a total federal marginal tax rate of 18.8%.)

The net effect of continuing to raid the SS Trust Fund to finance general fund expenditures (including military spending) which rightfully should be paid from INCOME TAX revenues, is a tax system that is mildly progressive IN NAME ONLY, but is, in reality a REGRESSIVE tax system which extracts the greatest tax burden from the middle class in order to avoid taxing the top 1-2%.

So it is no surprise who Romney has in mind to screw, to bear the burden of policies crafted by & for the !%........ so that the !% can continue historically unprecedented income tax rates that can NEVER cover general fund expenditures without being subsidized by the permanent theft of the Social Security benefits of working Americans.

Despite the fact that the Social Security Trust Fund can currently pay FULL BENEFITS through 2037 with NO CHANGES WHATSOEVER (by redeeming the bonds representing the surpluses loaned to the Treasury).....(and despite the fact that this solvency can be made permanent beyond 2037 by such simple measures and raising the FICA ceiling on income over $106,000)....Romney will have none of this.

Romney's explicit plan is to rely on the continued skinning of the Middle Class, by slashing their SS and MC.





Of course Romney does not admit it is the Middle Class he has in his sights. Romney-speak for skinning the Middle Class is to make "adjustments to curtail the growth of future benefits for the relatively well-to-do". Which makes it sound like he'd go after the 1%, which is the exact opposite of his plan.

And, by the way, what is Romney's explicit plan for the uber-rich 1%?

You guessed it: In Romney-speak, "lower all tax rates but make sure the wealthiest Americans still shoulder the same percentage of the burden."





That's Romney's formula:

Cut taxes so that the Warren Buffets of the world continue to pay less than their secretaries.....

Financed by the continued theft of the Social Security surpluses of the Middle Class (who in Romney-speak are labeled the "relatively well to do" to give a false populist spin to Romney's thoroughly plutocrat plot.)





The saddest part is that every single Republican would do what Romney makes explicit (or worse)....and that far too many "Democrats" will remain complicit.