Those who have read my writings know two things: (1) employment tax is my area of expertise and (2) I am no big fan of this Administration. And while I find a number of things very disturbing about the potential tax deal reached between Obama and Republican leadership, this diary currently on the recommended list (by a diarist that I both like and respect) has a false conclusion which should be clarified.
The diary points out a number of things, one of which is that this will further reduce the social security fund – something that I initially thought as well. But this is not true – monies would be shifted from the general fund to cover the amount of money the social security tax would otherwise take in – something that was already done for the new hire credits in the HIRE Act earlier this year..
Don’t want to believe that Obama will do this (as one commentator said to me)? Fine. But let’s not say that he will further reduce the fund when the only example to date confirms that money will not be further depleted from the social security fund.
Now, I have a lot of issues with the proposed tax deal – a deal that may not go through to begin with. They include the following:
- That the social security tax is used as a vehicle to "stimulate" the economy with reductions, even if otherwise reimbursed, as it sets a dangerous precedent;
- That the social security wage base limit hasn’t increased from 2009 to 2011 – the first three year period that this has happened;
- The optics of this, even if not true – are not good politically;
- Even if funds are transferred from the general fund, it puts more stress on other programs (which certainly won’t include aggressive wars or building more weapons);
- The potential for this to not include self employed individuals, and therefore be inconsistently applied (although I’d like to see this be completely excluded anyway);
- The fact that this is "temporary" and therefore subject to the same "you’re going to raise our taxes" argument when it is sent to expire;
- Tax cuts are a bad way to stimulate the economy in general;
- If this also includes the employer matching share of social security (and I have seen conflicting information so far), then this is an additional tax cut for businesses that are already sitting on piles of cash -I'll say that I don't think the employer match is impacted here but am looking to confirm; and
- The fact that these are not paid for with any offsets, therefore increasing the deficit and making the Catfood Commission recommendations to cut social security more prominent.
I’m sure there are more but that’s a start.
There is plenty about this agreement, tax cuts or Obama’s lack of negotiation skills when it comes to Republicans as compared to lashing out at progressives for being rightfully pissed.
But let’s not get pissed at things that are just not true – at least not until they are proven true.
