Tuesday, February 14, 2012

Obama Cites Rising Gas Prices – Up 83 Percent Under His Tenure – Among Reasons to Extend Payroll Tax Cut | CNSNews.com

Obama Cites Rising Gas Prices – Up 83 Percent Under His Tenure – Among Reasons to Extend Payroll Tax Cut | CNSNews.com

Let's take a look at this from a standpoint of dollars. The payroll tax cut cost the SSN fund $105B in 2011 and the projected amount for 2012 will be $119B if extended for rest of the year. Why are we kicking the can down the road? Just like last year, the $119B that the SSN Fund will lose this year is not being offset or repaid. President Obama had this exchange, see the article:

And when gas prices are on the rise again – because as the economy strengthens, global demand for oil increases – and if we start seeing significant increases in gas prices, losing that $40 could not come at a worse time,” Obama said. “One local entrepreneur named Thierry – where’s Thierry? He’s right here.

“He told us that $40 would cover the gas that gets him to his day job, or, alternatively, the Internet service his small business depends on. So he’d have to start making a choice – do I fill up my gas tank to get to my work, or do I give up my entrepreneurial dream. ‘Forty dollars,’ he wrote, ‘means a heck of a lot,’” the president added.

Does President Obama believe that the American people are stupid? If Thierry is a local entrepreneur then he will not benefit from the payroll deduction nor has he benefited prior because the payroll reduction is for employees. Let me say that again - the payroll tax is for EMPLOYEES. The "local entrepreneur" does not get this deduction. That being said, why are we allowing our Government to kick the can down the road. Depending on which CBO report one believes the SSN fund could be insolvent by 2025 or 2050. Instead of extending the payroll tax cut why is there no discussion on reducing the overall tax rate for everyone by 2%? Wouldn't that make more sense? We'd still be able to give everyone an extra $40, minus those that are entrepreneurs, and not further damage the SSN fund.

FDR's quote at the end of the article is intriguing as well - "We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program. Those taxes aren’t a matter of economics, they’re straight politics." Trouble part is that many will go to the polls this upcoming November and pull the lever for more spending, less fiscal control and further erosion of the SSN Fund. Guess it is true that we get the government we vote for.