Social Security Tax Hike Hits American Workers. Surprise!

It’s just the tip of the iceberg boys and girls. You an’t seen nuttn’ yet. — jtl, 419

Written by Gary North via The Tea Party Economist

English: In the United States, Medicare benefi...

In the United States, Medicare benefits compared for younger vs. older workers. According to author Joseph Fried, this graphic uses information from: C. Eugene Steuerle and Adam Carasso, “The USA Today Lifetime Social Security and Medicare Benefits Calculator,” (Urban Institute, October 1, 2004), from: Note: The calculator does not include the value or cost of the Social Security disability program.

The mainstream media are filled with stories about the surprise experienced  by American workers this month. Social Security’s FICA tax will rise by two  percentage points this year.

Someone making $50,000 will pay an extra $1,000.

It turns out that workers forgot to budget for this. They did not know that  they would be pushed over their own personal fiscal cliff. They thought the tax  hike would only affect rich people.

What’s this? You mean lunches are not free? You mean somebody has to pay for  granny’s retirement? Will wonders never cease?

Of course, the present value of the gap between the promises made by the  government and the taxes expected to be collected is now $222  trillion for Social Security and Medicare. But this does not faze Congress.  Congress will deal with that later. For now, two percentage points will have to  do.

This supposedly will reduce the growth in the economy by one-half of one  percent. Why do Keynesian economists believe this? The money taken out of  workers’ paychecks will be spent by the government. It will go to oldsters. They  will spend it.

Tax hikes redistribute wealth. They rob from the victims and buy votes from  the recipients. But Keynesian theory says that government spending gooses the  economy. It amazes me that Keynesians think that this tax hike will reduce  economic growth.

Workers are inside the can that Congress has kicked down the road again. They  are getting a foretaste of taxes to come, or inflation to come, or both.

At some point, there will be a tax revolt. Then granny will find herself  short of funds. She will call on her family to make up the difference.

Families have not budgeted for that, either.

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About Land & Livestock Interntional, Inc.

Land and Livestock International, Inc. is a leading agribusiness management firm providing a complete line of services to the range livestock industry. We believe that private property is the foundation of America. Private property and free markets go hand in hand—without property there is no freedom. We also believe that free markets, not government intervention, hold the key to natural resource conservation and environmental preservation. No government bureaucrat can (or will) understand and treat the land with as much respect as its owner. The bureaucrat simply does not have the same motives as does the owner of a capital interest in the property. Our specialty is the working livestock ranch simply because there are so many very good reasons for owning such a property. We provide educational, management and consulting services with a focus on ecologically and financially sustainable land management that will enhance natural processes (water and mineral cycles, energy flow and community dynamics) while enhancing profits and steadily building wealth.
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