When Thomas Jefferson and his founding allies set forth the Declaration of Independence, they decried the authoritarianism of King George III, for "imposing Taxes on us without our Consent."
Since 1776, questions of individual liberty have always surrounded proposals to increase taxes on Americans.
So far this election season, the question of taxes has held a backseat to foreign policy and social issues, but with Barack Obama pledging to increase Social Security taxes by $1.3 trillion over the next decade, perhaps the country should start having a larger debate on freedom and the scope of governmental power.
Investor's Business Daily points to the importance of this debate, in its editorial, "Obama's Social Insecurity Plan":
We suspected that the No. 1 liberal in the U.S. Senate would get around to playing the granny card as he shook Hillary off and focused on John McCain. That moment came in Gresham, Ore., on Sunday when he promised to protect "the promise that FDR made" and "preserve the Social Security Trust Fund." He warned that McCain would raise the retirement age and privatize Social Security a la President Bush.
How does he demagogue the issue?[...]
Obama would save grandma and grandpa by bankrupting their grandchildren. He has proposed lifting the tax cap on earnings subject to the 12.4% Social Security tax, which now covers only the first $102,000.
As George Will points out, a "Chicago police officer married to a Chicago public-school teacher, each with 20 years on the job, have a household income of $147,501, so you (Obama) would take another $5,642 from them."
As Michael Tanner of the Cato Institute points out, eliminating the cap would be the largest tax increase in American history — some $1.3 trillion over the first 10 years.
"It would give the United States," Tanner says, "one of the highest marginal tax rates in the industrialized world, with the potential for seriously disrupting economic growth."
The Heritage Foundation analyzed the effect of eliminating the earnings cap. Heritage found that the take-home pay of 10.3 million workers would be reduced by an average of $5,650 in the first year alone. Taxes would be raised on four million workers over the age of 50.
Taxes would also be raised on 3 million small-business owners who file their taxes as individuals. By fiscal 2015, the number of job opportunities lost would exceed 865,000 and personal savings would decline by more than $55 billion.
And if you think this would raise taxes only on the "rich," think again. According to Heritage, taxes would be raised for 97,065 carpenters, 110,908 police officers, 254,992 nurses, 208,562 postsecondary teachers and 237,000 dentists. That would make a lot of people bitter.
Eliminating the earnings cap as Obama wants would raise taxes for many middle-class families, impose a huge burden on small business, slow the economy and cost jobs. You don't help the people riding the wagon by punishing the people pulling it. But Obama would.
See also, "Obama: Raise Social Security Taxes."
Image Credit: Michael Ramirez
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