Measured relative to GDP, almost all of the projected growth in federal spending other than interest payments on the debt stems from the three largest entitlement programs—Medicare, Medicaid, and Social Security.
via Director’s Blog » Blog Archive » The Long-Term Budget Outlook.
The Wall Street Journal posted a piece by the sage staff on the implications of the Oblivious Obama tax cuts.
Now we know: 95% of Americans will get a “tax cut” under Barack Obama after all. Those on the receiving end of a check will include the estimated 44% of Americans who will owe no federal income taxes under his plan.
In most parts of America, getting money back on taxes you haven’t paid sounds a lot like welfare. Ah, say the Obama people, you forget: Even those who pay no income taxes pay payroll taxes for Social Security. Under the Obama plan, they say, these Americans would get an income tax credit up to $500 based on what they are paying into Social Security.
Just two little questions: If people are going to get a tax refund based on what they pay into Social Security, then we’re not really talking about income tax relief, are we? And if what we’re really talking about is payroll tax relief, doesn’t that mean billions of dollars in lost revenue for a Social Security trust fund that is already badly underfinanced?
READ THE FULL ARTICLE TO SEE THE ANSWERS…
“It’s interesting that Mr. Obama calls his plan ‘Making Work Pay,'” says Mr. Biggs, “because the incentives are just the opposite. By expanding benefits for people whose benefits exceed their taxes, you’re increasing their disincentive for work. And you’re doing the same at the top of the income scale, where you are raising their taxes so you can distribute the revenue to others.”
Even more interesting is what Mr. Obama’s “tax cuts” do to Social Security financing. As Mr. Biggs notes, had Mr. Obama proposed to pay for payroll tax relief out of, well, payroll taxes, his plan would never have a chance in Congress. Most members would look at a plan that defunded a trust fund that seniors are counting on for their retirement as political suicide.
And that leads us to the heart of this problem. If the government is going to give tax cuts to 44% of American based on their Social Security taxes — without actually refunding to them the money they are paying into Social Security — Mr. Obama will have to get the funds elsewhere. And this is where “general revenues” turns out to be a more agreeable way of saying “Other People’s Money.”
Yep. It’s just that easy to fool a majority of the American people. Repeat a slogan (95%) long enough and trust they won’t look into it, and the press won’t cover it. Obama’s play them like a fiddle.