Gunpowder Chronicle posted on November 3, 2008 6:59 PM | Rating:
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Socialists backing Obama's tax plan fail to take in the entire big picture on his tax plans and policies, even when those details are lying in plain site. Obama's own rhetoric on his redistributionist policies highlights this: he argues that the 47% of US taxpayers that don't pay taxes are entitled to "refunds" because they pay sales tax, and FICA, and payroll taxes. And therein lies the ugly truth of the tax increases of those making $250,000 and more.
You see, Obama's master plan also includes lifting the current cap on FICA (Social Security) taxes above $102,000. That means that for the self-employed and those in LLCs, they will now be paying 12.4% on any income earned above $102,000. If you were making $250,000 this year, you only paid $12,648 in FICA as a self-employed taxpayer. But under Obama's tax plan, you will now pay $31,000 in FICA tax-- on top of $99,000 in income tax. Plus another $17,500 in Medicare tax. That is $147,500 in taxes... for an overall effective tax rate of 59% for just the FEDERAL RATE. Don't forget that many states (like Maryland) still have an income tax.
What do you think that means for small businesses? Think they will hire new employees? Invest new equipment? Pay for better health insurance benefits?
Would you, if the Federal Government was confiscating 59% of your income just to redistribute it to people who don't pay income taxes?
So, Obama's tax increases are not just "chump change", moving from 35% to 39.6%. They are big-time change. Of course, if Obama had ever held a real job -- one where he actually had to perform to get paid -- he might understand that. And he might understand why people who haven't reached that "threshold of wealth" yet fear the reaper the Obama represents.