Saturday, December 03, 2011

Democrats are Dreaming

In a somewhat strange turn of events it seems the Democrats who contiguous talk themselves as being the party that will save Social Security is now the party that quite frankly is giving it lip service.  The Payroll tax (the tax that generates a lot of income for Social Security) is at 4.2%, but it is usually at 6.2%. This tax cut is set to expire by the end of the year. If the tax cuts aren't extended then that would mean that the people making  in the low income brackets (as low as 35,000) will pay 700 dollars more and people making more than 110,000 will pay a few thousands more. Granted that the expiration would hurt people in the middle class, but the U.S is running a deficit it time to make hard choices. The Debt to GDP is too high and extending tax cuts like this will hurt the economy in the long run. Because the less money the U.S tries to save now means more than that amount they are going to have to save later. In Fact Obama and some Democrats want to not only extend the tax cut, but expand it to make people pay 3.1% he claims he will pay for it by taxing the rich more. Granted this tax cut will help people in the lower bracket and that the taxes on the rich need to increase, but the U.S can't live off on just revenue neutral ideas they need revenue positive plans.  So I say the best plan would be to eliminate the payroll tax cuts to the people making over 100,000 and in fact make it 7%, and for the middle class I say compromise on slowly re-introducing the 6.2% by only increasing it by 0.5% in 2012 year and 0.5% the next year and the other 1% the third year. The U.S has to start getting serious on debt , and make long term plans to stop the social security deficit and the countries deficit.

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