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I apologize for the extremely short diary, but it really needs no further explanation than the following chart.

The X axis has several different income levels, starting at someone working full-time for the current Federal minimum wage ($7.25 an hour) and ending at someone earning $1,000,000 in taxable income in a single year.

The blue bars represent the change from the Social Security (FICA) tax being reduced to 3.1% from 6.2% (as a percentage of income).

The red bars represent the change in Federal Income taxes paid from the Bush-era tax cuts (as a percentage of income).

As you can see, the Bush tax cuts disproportionately favored wealthy people, whereas cutting the FICA does next-to-nothing for wealthy people.

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Comment Preferences

  •  My answer is in three words. (7+ / 0-)

    Because Obama does.  

    "I smoke. If this bothers anyone, I suggest you look around at the world in which we live and shut your fuckin' mouth." --- Bill Hicks

    by voroki on Fri Dec 02, 2011 at 02:50:26 PM PST

  •  We can fix that: raise the FICA cap! (1+ / 0-)
    Recommended by:
    blueyedace2

    "The extinction of the human race will come from its inability to EMOTIONALLY comprehend the exponential function." -- Edward Teller

    by lgmcp on Fri Dec 02, 2011 at 02:52:17 PM PST

  •  As someone on the bottom rung of society... (0+ / 0-)

    I've got to say that I don't support the payroll tax cut either.  Social Security benefits are based on the amount contributed.  The more I pay now, the more I'll get back if and when I retire.

    "Ich bin ein Dachs!"

    by PvtJarHead on Fri Dec 02, 2011 at 03:20:40 PM PST

    •  No (0+ / 0-)

      The payroll tax holiday does not affect Social Security benefits, which are based on earnings, not contributions.  

      "Well, I'm sure I'd feel much worse if I weren't under such heavy sedation..."--David St. Hubbins

      by Old Left Good Left on Fri Dec 02, 2011 at 03:40:22 PM PST

      [ Parent ]

      •  This is all pretty fuzzy. SS contribution from (0+ / 0-)

        FICA go directly into the general fund and are spent. Historically and for a number of year to come there is a surplus after SS payments are made. However there is no separate account for the surplus funds. The government spend the surplus for the general fund and issues IOU's in the form of non-negotiable government bonds for SS. These bonds have been accumulating for many years. At the pojnt that the collections coming into SS fall below the amount being paid out, the bonds will have to be cashed in as required to cover payment.

        So in effect we are taking normal rubber check from the government and replacing them with Wamo superball checks.
        They are taking real tax money meant to go to the fund and spending elsewhere and writing a bigger rubber check to issue the bonds.

        •  Edited: This is all pretty fuzzy. (0+ / 0-)

          SS contributions from FICA go directly into the general fund and are spent. Historically and for a number of years to come there is a surplus after SS payments are made. However there is no separate account for the surplus funds. The government spends the surplus from the general fund  for other purposes and issues IOU's in the form of non-negotiable government bonds for SS. These bonds have been accumulating for many years. At the point that the collections coming into SS fall below the amount being paid out, the bonds will have to be cashed in as required to cover payments.

          So in effect we are taking the normal rubber check from the government and replacing them with a Wamo superball checks. They are taking a reduced amount of real tax money and supposed writing a bigger rubber check to issue the bonds.

  •  Good diary, bad graph. (0+ / 0-)

    I hate to nit-pick, but I see this "mistake" too often.

    The X-axis is log-scaled. You shouldn't do that. A log scale hides the vast difference between the 1% who make $1,000,000 and the rest of us in the $50,000 range.

    Of course this will make your graph look strange and unnatural. But US economic inequality is strange and unnatural, so it will actually be accurate.

  •  The top 0.1% does not pay FICA tax (0+ / 0-)

    FICA is payroll tax, not an income tax; therefore, it is not levied on non-payroll income.

    The GOP has become the "Jerry Springer" party.

    by ConcernedCitizenYouBet on Fri Dec 02, 2011 at 05:08:55 PM PST

    •  it is also not assessed on any payroll (0+ / 0-)

      income over 106k per year

      •  Yes, but the true crime is that FICA and (0+ / 0-)

        Medicare are not levied on investment income at all.  Far too many DKos members are focused on raising the marginal tax rates and accessing FICA on all payroll income.  However, neither of these taxes affect investment income (FICA is only levied on payroll income and the marginal rates only apply to ordinary income). With an ever-growing percentage of the GDP accruing to capital, not treating all forms of income equally with respect to taxation is a recipe for shifting an even larger percentage of the cost of government onto the backs of two-income professional couples while giving the capital class a free ride.

        The GOP has become the "Jerry Springer" party.

        by ConcernedCitizenYouBet on Sat Dec 03, 2011 at 05:34:01 AM PST

        [ Parent ]

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