Hyperbole maybe, but there has been a decades long Republican strategy to starve government of revenues to reduce the size and the effectiveness of the federal government. They seek to reduce governments regulatory effectiveness over business interests while working to shift the federal tax burden off the wealthy and onto average Americans. They enable the wealthiest individuals and biggest corporation as they move huge amounts of capital off-shore to significantly reduce federal tax revenues. Republicans need to shift the real tax burden and reduce available income for those average Americans that sell their labor in order to increase profits and increase the economic stress felt by average Americans. Unfortunately, the Republican plan has been working too well. It almost destroyed the entire global economy.
If a foreign group or government were working to undermine the American economy with these same Conservative/Republican strategies, it would certainly be called economic terrorism.
Republicans have ignored (or even tacitly encouraged) the wealthiest individuals and corporations as they removed huge amounts of American capital from the economy and stashed it in illegal off-shore tax shelters or in hedge funds that only circulates internally in the Wall Street casino. Trillions of dollars, at least $13-14 trillion going into illegal off-shore tax shelters and untold trillions in hedge fund that only circulates internally in the Wall Street casino, not circulating in the general economy. Trillions that are completely removed from the domestic economy which reduces GNP growth by several times more cumulatively each year. The resulting reduction in economic activity resulted in the loss of untold millions of jobs and significantly reduced federal revenues while creating a world-wide economic collapse. Republicans would rather shift the focus on Fanny/Freddy or the sub-prime loan market. They really don't want any light on the fallacy of right wing economics. The Republican economic agenda is to starve government and increase the economic stress of most Americans to reach their selfish goals.
Today more than half the federal revenues come from the American wage earner through the payroll withholding taxes and the currently less than progressive federal income tax. Wage earners belong to the 90% of Americans that slice up the remaining 10% of the earnings pie left over after the top 10% get theirs. Because of the 7.65% non-refundable payroll surtax assessed upon only the wage earners gross earnings, more of the federal revenues are collected from those who sell their labor than from anyone that sells anything else. Not only is this tax calculated differently than any other income tax, it's collected up front before the wage earner's costs are extracted. All other income taxes are assessed upon profits after all costs are paid. It's time to turn this around.
Wages/Salaries were not taxable income until the Victory tax of 1945 and even then it was only to be temporary until the debt from WWII was retired. The income tax was never intended to be applied on those that sell their labor. It was always meant to be levied only on those that reaped the most benefits from our economy. It's time to reverse the decades old republican strategy that slowly shifted the federal tax burden off the wealthy and onto the wage earners. It's not to late to reverse this republican tax strategy. In fact, now is the best time to turn it around.
Reforming and simplifying the Internal Revenue code would be the first step. An increase the minimum income floor from the current $400 to $75,000 and beginning the progressive income tax at $75,001 on all income no matter the source so that no deductions, incentives, tax shelters and loopholes would be required. No special rates for corporations or Wall Street casino gamblers, everyone would pay the income tax on all the income they receive over $75K on the same progressive scale.
We really need to stop believing republican bullshit. Social Security is not a personal insurance policy that we have to pay in to receive the benefits. It's the republicans that always try to tie Social Security and Medicare to the amount paid by the employee's contribution. That's just plain bullshit. Social Security is a social welfare safety net program and it doesn't matter how it's paid for. The same is true for Medicare. Both programs would have much more stable sources of funding if the withholding taxes were assessed on the gross earnings of businesses and corporations instead of the gross earnings of wage earners. If the businesses paid withholding taxes on their gross earnings the rate could be 5% or less and would easily replace the revenues generated by the current 15.3% surtax on jobs, 7.65% of which is already being included in the cost of payroll by the business.
The Social Security benefits will not change they will still be calculated on the gross earnings of the beneficiary but the wage earner would pay the taxes indirectly when they buy any product or service. Because the matching 7.65% contribution from the employer actually becomes an increased cost (of payroll) for the business and is worked into price of of their products or services just like any other cost, it becomes an indirect tax. The business collects and remits the tax but the customer actually contributes the funds. The tax is deferred to the consumer which is the definition of an indirect tax (See Article 1 Sections 8 & 9 of the U S Constitution). So the wage earner has 7.65% withheld from their gross earnings directly and then pays the matching tax in the form of inflated prices on every product or service they buy. It doesn't really matter how the tax is assessed the wage earner will always be the final taxpayer because we cannot defer our tax liability to others.
Even though, the wage earner still will in the end will pay the taxes assessed upon the the businesses through slightly higher prices much more money will be left circulating in the local economies by the increased take-home pay. The business will also benefit by the increased activity of the increased payroll dollars circulating in the local economies. More important, the money will have a chance to circulate in the economy before it's extracted by the federal government. Taking advantage of the multiplier effect of the money circulating even before it's extracted. This will keep more capital flowing through local economies longer which would generate even more demand for products and services. This would increase the multiplier effect of all capital as it circulates through the economy. Federal stimulus programs would be even more effective because taxes are removed after the capital has a chance to flow through the economy and because taxes are no longer removed from the payroll dollar each time it cycles through a payroll. Billions of dollars more would remain circulating longer in local economies creating both more jobs and more tax revenues.
Stop listening to republican BS on the Wall Street casino too. There already is a financial transaction tax in America but in 1967 it was reduced to .004%. It's time to increase the FTT back to a half point. The revenues can be used to retire the debt caused by Wall Street's most recent meltdown. Increasing this tax would encourage long term investment and discourage the more speculative investments that caused the boom and bust cycles we have experienced since the tax was reduced.
Terrorism or not it's time to push back hard on the Republican economic strategies that have resulted in largest concentration of wealth since the days of the Robber Barons of the 1920's.