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|Subject: Who paid for Bush era tax cuts?||Date: 12/31/2012 2:03 PM|
|Author: elixe||Number: 1849949 of 2111320|
A case can be made that OASDI Payroll taxes on working poor and middle class helped pay for the tax cuts of the wealthy.
Over the years the 2.7 trillion in current OASDI trust funds were transferred to the General Fund to be used for non entitlement purposes. The wealthy were exempt from FICA taxes on income in excess of about $100 thousand, while those with less then $100 thousand income were taxed regardless whether it was taxable or not. (A rate of 4.2% last year, 6.2% prior to the Tax Relief Act).
So even if a poor worker had zero taxable income, he still was taxed on earnings.
(Note that the Trust Fund consists of Government Bonds that are backed by the Full Faith and Credit of the U.S. Government).
Now the wealthy want to reduce SS benefits to resolve a future problem that might occur after 2021. (When the trust fund is projected to begin running out, outgo exceeds income).
Perhaps a way to solve the current financial quandary is to increase the tax rate an additional 4.2% on all earnings in excess of $100,000 regardless of amount?
Seems like a fair way to me to resolve the issue of the poor and middle class paying for the Bush era tax cuts.
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