A number of self proclaimed smart people have analyzed Herman Cain’s 999 plan. Some, like WaPo’s “Fact Checker” don’t apparently know the most basic fact about payroll taxes– that is, how much they really are. To demonstrate — “fact checker” claims that payroll taxes are “7.65” percent of wage income. Please look at the form 941 for this year . This is the form the employer files with the IRS when he or she pays payroll taxes. Add up all the numbers. The total of Social Security and Medicare is 13.3 percent. Now factchecker later sort of alludes to the part the employer pays and claims that this is not really a payroll tax on the employee, its a payroll tax on the employer. Hey factchecker, I am an employer. If I don’t pay an employee, I don’t have to pay the matching part. Really. And its going to go back up to 15.3 percent next year absent congressional action. Now, in what reality is it that the part I pay is not really an employment cost? If I have no employees, I don’t have to pay it. When I calculate the cost of hiring an employee, I include that plus the unemployment tax and the worker’s compensation policy I have to carry. Not to mention the state disability insurance and the state unemployment insurance. Hey “factchecker” get your facts straight. And to Redstate Readers, let’s stop pretending that there are a lot of employed people who don’t pay taxes. Yes, we carefully say “income taxes”. But when we do that we are participating in the liberal lie.
See, this is why some of us call Social Security a Ponzi scheme– it isn’t JUST that the money I was paying in all those years (heck, I’m still paying it) was not going into some account to be kept safe until I reached age 66, it is that all the politicians conspired to lie to us about it. So they don’t say, we’re going to levy a flat tax on all payroll of 15.3 percent. No, they call it the Federal Insurance Contributions Act, that makes it sound like we’re investing in an insurance policy. They tell us that our employers are having to pay the other half as if that wouldn’t other wise be money in our pockets that is going into the federal pocket. They do that so we will not have to see, on every paycheck, how much of the money we earn is actually going to the federal government.
They did drop the scam when it came to financing Medicare and do call that a tax, but they are all taxes. What is the difference between payments on an insurance policy and taxes? Well, we all know that. I actually own the insurance policy. When I pay taxes I haven’t acquired any rights that cannot be taken away from me by the next congress. So the truth is that every single one of us who works at a job above board and complies with the law is paying a flat payroll tax, self employed included. We see the whole amount. And, of course, despite all talk of lockboxes and social security trustfunds, just like in a Ponzi scheme, when there was a lot more money coming in than was necessary to pay off the early participants– i.e. back in the 90’s, the excess was “borrowed” to spend on other projects. Now those of us who paid the taxes back then are being treated like the doofuses some of us were because some of us (not I) actually believed all the bull about the trust funds and all the other deceptions.
So if you exchange a 15.3 percent payroll tax for a 9 percent payroll tax, that is a reduction. Right? At least for people making less than $107,000 a year. But the liberal, and some conservative pundits actually claim not to understand that the share the employer pays is really a) a payroll tax and b) money that the employee earned by performing services for the employer. So it is coming out of the employee’s pocket, it is just that the scheme is set up to promote class warfare by letting people think that money that their employer pays for their services that doesn’t show up as a dollar amount on their paycheck is somehow money that they didn’t earn.
Can conservatives at least tell the truth? Pension benefits, medical benefits, employment insurance– these are all compensation for employment and if that money wasn’t used to pay for all those benefits it would be going in the employee’s pocket. That is what any economist worth his salt will tell you.