President Obama proposes paying for his two percent decrease in Social Security withholding (a true reduction of 30 percent) by initiating a new tax on those who earn more than $1 million per year. However, has anyone done the math?
There are at least 150 million in the work force with an average earning of $35,000 a year. The two percent drop in the tax translates into $700 for each of the 150 million workers. Result: $105 billion that is not going into Social Security. No problem, the rich will pay for it.
There are approximately 250,000 taxpayers with incomes over $1 million (235,000 in 2009). In order to cover the annual $105 billion deficit to Social Security, each “rich” person would have to pay an additional tax of $420,000.
It is not reasonable to expect each “rich” person to contribute $420,000 additionally every year to Social Security. On top of that, the top ring of the income tax rate will soon increase to 39.6 percent, and capital gains taxes are going up. The President must be aware of this; it’s simple math.
Where is he leading us? Before you know it, the sacred cow – “the rich” – will be milked out. Then what will we do?