I seem to remember both Republicans and Democrats saying that they did not want to raise taxes on the Middle Class. Then how come, even if a deal is reached to avoid the fiscal cliff, taxes on the Middle Class are going up in January?
The Washington Free Beacon posted an article today explaining what is about to happen:
Employee payroll taxes are scheduled to rise nearly 50 percent in 2013 absent action by lawmakers, and there is a growing sense that both parties might be willing to let that happen.
Party leaders have about five weeks to resolve a host of budget issues to avoid going over the “fiscal cliff,” the term used to describe more than $600 billion in automatic spending cuts and tax increases scheduled to occur on Jan. 1, 2013.
The discussion thus far has focused on the Bush-era tax cuts, with very little discussion of what to do with the temporary cuts on employee payroll taxes that has been in effect for the past two years. The employee payroll tax cut affects roughly 160 million Americans and saves the typical middle class family $1,000 per year.
U. S. News posted an article in January 2012 which listed five facts about the employee payroll tax cut. One of these is very interesting:
Even though workers are paying less tax into the Social Security system, they do not suffer any reduction in the benefits that will ultimately be collected. The federal government promises to pay the benefit that would otherwise have been received. The benefits are figured on the basis of earnings (up to the wage base limit for the year) and not on the taxes paid.
So Congress took a program (Social Security) that has been teetering on bankruptcy for a number of years and reduced the amount of money paid into it without reducing the benefits being paid out. What a business plan!
The article at the Washington Free Beacon concludes:
There is some concern among Republicans that Democrats might disregard policy considerations in order use the payroll tax cut as a political wedge issue. Democrats did this in February when House Republicans arguably lost a showdown with the White House.
It remains to be seen whether or not lawmakers can strike a deal to avoid going over the fiscal cliff.
Either way, though, the payroll tax cut appears unlikely to survive.
Obamacare increases taxes on the Middle Class in January. It is likely that even if a deal is reached to avoid the fiscal cliff, other taxes on the Middle Class will be increased in January also. As Americans, we need to tell Washington–THE PROBLEM IS NOT A LACK OF REVENUE–IT IS TOO MUCH SPENDING!!! Until Congress and the President get that message, the American taxpayer will continue to be seen as a never ending source of money, and at some point the American taxpayer will run out of money.