Patterico's Pontifications

8/8/2010

Michael Hiltzik’s Sleight of Hand on the Social Security Trust Fund

Filed under: Dog Trainer,General — Patterico @ 1:58 pm



The idea behind most magic tricks is to distract the audience — with patter, superfluous hand motions, and other tricks — so that they won’t notice the magician making his key move, such as palming the card, or sneaking the coin into his vest pocket. If you know the trick, it’s usually possible to ignore the distractions and spot the move.

Columnists sometimes do the same thing. In the midst of a lot of hand-waving and harrumphing, they sneak in a key assumption — and before you know it, it is transformed into a fact. And then — presto-change-o! — the assumption, now a fact, becomes the key fact underlying the whole piece. And, because it was snuck in, this central proposition is never held up to the light of scrutiny.

Let’s see if you can spot the trickery employed in Michael Hiltzik’s latest column. I’ll give you a hint or two by bolding some of the language:

Despite what Social Security’s enemies love to claim, the trust fund is not a myth, it’s not mere paper. It’s real money, and it represents the savings of every worker paying into the system today. So I’m going to train a microscope on it.

What trips up many people about the trust fund is the notion that redeeming the bonds in the fund to produce cash for Social Security is the equivalent of “the government” paying money to “the government.” Superficially, this resembles transferring a dollar from your brown pants to your gray pants — you’re no more or less flush than you were before changing pants.

But that assumes every one of us contributes equally to “the government,” and by equal methods — you, me and the chairman of Goldman Sachs.

The truth is that there are two separate tax programs at work here — the payroll tax and the income tax — and they affect Americans in different ways. The first pays for Social Security and the second for the rest of the federal budget.

Most Americans pay more payroll tax than income tax. Not until you pull in $200,000 or more, which puts you among roughly the top 5% of income-earners, are you likely to pay more in income tax than payroll tax. One reason is that the income taxed for Social Security is capped — this year, at $106,800. (My payroll and income tax figures come from the Brookings Institution, and the income distribution statistics come from the U.S. Census Bureau.)

Since 1983, the money from all payroll taxpayers has been building up the Social Security surplus, swelling the trust fund. What’s happened to the money? It’s been borrowed by the federal government and spent on federal programs — housing, stimulus, war and a big income tax cut for the richest Americans, enacted under President George W. Bush in 2001.

In other words, money from the taxpayers at the lower end of the income scale has been spent to help out those at the higher end. That transfer — that loan, to characterize it accurately — is represented by the Treasury bonds held by the trust fund.

The interest on those bonds, and the eventual redemption of the principal, should have to be paid for by income taxpayers, who reaped the direct benefits from borrowing the money.

So all the whining you hear about how redeeming the trust fund will require a tax hike we can’t afford is simply the sound of wealthy taxpayers trying to skip out on a bill about to come due. The next time someone tells you the trust fund is full of worthless IOUs, try to guess what tax bracket he’s in.

Did you see what he did?

If you weren’t paying close attention, this could almost make sense. Boiling down his argument: there’s a payroll tax and an income tax. The income taxpayers (the rich) are accomplishing their goals by borrowing from the fund established by the payroll taxpayers (the poor). Now, the rich have to pay back the poor, and the damned cheapskates are whining about it. The nerve!

Where Hiltzik palms the card is where he assumes that the programs paid for in this manner are programs “to help out those at the higher end.” Let’s go over what Hiltzik says these programs are: “housing, stimulus, war and a big income tax cut for the richest Americans, enacted under President George W. Bush in 2001.”

Take those programs in order. “Housing” is a federal program designed “to help out those at the higher end”? On what planet? The stimulus is a program designed “to help out those at the higher end”?? That is a ridiculous notion, and becomes even more ridiculous when you look at a breakdown of how stimulus funds are spent.

As for war, you can agree or disagree on the need for the wars we are engaged in, but unless you believe that we have conducted wars in Afghanistan and Iraq for oil (and if we did, where is our damn oil?), those wars are conducted for the common good of the security of the entire country.

As for the notion that the tax cuts are a program designed to benefit the rich . . . let’s take a step back to put that contention in perspective.

What Hiltzik ignores is that the federal government is essentially a huge redistributor of wealth from the rich to the poor. When the rich pay income taxes, they don’t do it to benefit themselves, as Hiltzik implies. They do largely to benefit the poor.

Let’s take a quick refresher course in where our federal tax dollars go. Over half the budget is spent on entitlements. Even if you cut Social Security (20% of the federal budget) out of the equation, as an outlay that (per Hiltzik) is supposed to be funded by payroll taxes, that still leaves 34% of the budget that goes to Medicare, Medicaid, CHIP, and other safety net programs. Some of these programs are funded, not by payroll taxes, but by income taxes — and they are hardly programs that “help out those at the higher end.” Another 6% of our budget goes to interest on the debt, so that we can continue to spend money on entitlements like there’s no tomorrow. I have just described 60% of our budget outlay.

About another 20% goes to the defense budget — which, again, is money spent for the common good. The remaining 20% of the budget is spent on things like benefits for federal retirees and veterans, scientific and medical research, transportation infrastructure, education, international spending, and other miscellaneous costs. Hardly any of this goes to benefit the wealthy at the expense of the poor.

Meanwhile, who pays for all this? These figures should be familiar to you, but just as a refresher: as of 2007, the top 1% of earners paid 40% of the federal income taxes. The top 5% of earners paid 60% of the federal income taxes. And the top 50% of earners paid a shocking 97% of federal income taxes. These figures remain fairly constant through the years.

So when Hiltzik speaks of the Bush tax cuts as a “program” designed “to help out those at the higher end.” what he is really saying is that those tax cuts very marginally reduce the amount by which the rich are soaked to benefit the poor. (Remember: our money is ours. When the federal government reduces taxes, it is not giving us money, it is allowing us to keep more of our own money.) And if the government allows a marginal reduction in the amount that it soaks the rich to pay the poor, and funds that marginal reduction by raiding the trust fund, which is paid for by payroll taxpayers, we are then essentially borrowing from the poor to pay the poor.

For Hiltzik to bleat that the rich have a lot of nerve to complain about the tax increase necessary to fund the shortfall in the trust fund, Hiltzik has to pretend that the programs paid for by income taxpayers are largely programs to benefit income taxpayers. In fact, as I have shown, a huge slice of the money for those programs goes to benefit the bottom half of earners, who pay virtually no income tax at all. (Again, in deference to Hiltzik’s analysis, we are removing payroll taxes and Social Security from the equation.)

So all the whining you hear from Hiltzik about “wealthy taxpayers trying to skip out on a bill about to come due” ignores the fact that their bill is largely to pay for programs that benefit other people.

Essentially, Hiltzik makes billions of dollars of debt disappear — and tries to convince you that they never existed to begin with. Abracadabra!

The next time Hiltzik tries to engage in sleight of hand like this, tell him you know the trick.

Thanks to Bradley J. Fikes.

UPDATE: Payroll taxes also fund Medicare, which is also funded by other sources including income taxes paid on Social Security benefits. I accordingly added the words “some of” to the sentence: “Some of these programs are funded, not be payroll taxes, but by income taxes — and they are hardly programs that ‘help out those at the higher end.'” I actually had noticed this discrepancy before hitting publish, but somehow forgot to make the correction. Thanks to Foo Bar. The post’s argument remains sound.

85 Responses to “Michael Hiltzik’s Sleight of Hand on the Social Security Trust Fund”

  1. Wasn’t Hiltzik the guy who had a blog with the
    LA Times and would send questions under an
    assumed name and answer the question in the
    blog to further his agenda?

    He was a fraud then and he’s still a fraud.

    El zopilote (de0898)

  2. “In other words, money from the taxpayers at the lower end of the income scale has been spent to help out those at the higher end.”

    In the first half of the sentence is Hiltzik trying to imply that higher income taxpayers do not pay S.S. tax? They are subject to the same rules as poor taxpayers, but may blow through the wage cap on S.S. income.

    Where is Chris Hooten when you need him?

    daleyrocks (940075)

  3. money from the taxpayers at the lower end of the income scale

    I have to ask, what money is that? Roughly the bottom 1/3 doesn’t even pay in, and below that, get a return of more than they pay in, SS and Medicare included. Again, what money from the lower end of the scale is the dud talking about?

    John Hitchcock (9e8ad9)

  4. He isn’t talking about anything that happens in reality, John. He is making shlt up, and spitting out standard boilerplate leftist talking points.

    JD (3dc31c)

  5. And still, the whole point is to establish the “reality” of the “trust fund” … but he doesn’t. Its still nothing but a large pile of promises from one end of government to another.

    In other words, it is the same kind of baseless promise that has sunk so many state budgets. The only reason that it hasn’t sunk the US budget yet, is that there is a bigger cloud of fantasy.

    That’s all the “full faith and credit of the US Treasury” is, a big cloud of fantasy.

    SPQR (26be8b)

  6. Since 1983, the money from all payroll taxpayers has been building up the Social Security surplus, swelling the trust fund. What’s happened to the money? It’s been borrowed by the federal government and spent on federal programs — housing, stimulus, war and a big income tax cut for the richest Americans, enacted under President George W. Bush in 2001.

    To make a long story sort – Bush spent your Social Security money!

    Of course there never was a box full of money marked “Social Security”, which is what he’s trying to imply here.

    Subotai (b38f57)

  7. I have to ask, what money is that? Roughly the bottom 1/3 doesn’t even pay in, and below that, get a return of more than they pay in, SS and Medicare included. Again, what money from the lower end of the scale is the dud[e] talking about?

    Payroll taxes.

    Patterico (c218bd)

  8. In theswe Federal, State and Local budgets the driving force of overexpenditures seems to be pensions and health care costs

    Interesting that this decay accelerrated when the Fed lowered rates to 60 year lows during the Clinton era forcing the insurance companies to invest funds out of securities and into volatility as well as pension funds – which led to the bailouts

    EricPWJohnson (c318ac)

  9. Indeed, Patterico but with EIC the lowest quintile still gets a large subsidy of the payroll taxes from those evil top quintile “rich” people.

    SPQR (26be8b)

  10. “forcing the insurance companies to invest funds out of securities and into volatility as well as pension funds – which led to the bailouts”

    WTF? Plain english please. What were insurance companies buying that were not securities?

    daleyrocks (940075)

  11. Nah, Patterico, your [e] doesn’t belong. I selected “dud” for its definition. And I can assure you, the lower income people do in fact receive all their federal income tax, all their FICA tax, all their Medicare tax back with extra money on top when they turn in their Form 1040EZ, due to the EIC.

    John Hitchcock (9e8ad9)

  12. Daley

    Most invested in bonds, t-bills – the base return –

    This paper is a good read

    http://www.soa.org/library/proceedings/record-of-the-society-of-actuaries/2000-09/2004/june/rsa04v30n268of.pdf

    EricPWJohnson (c318ac)

  13. daleyrocks – It just kind of makes things up as it goes along.

    JD (3dc31c)

  14. JD

    in 12 on pages 25 to 27 show what the insurance industry were/was investing in ideally

    its a good read

    EricPWJohnson (c318ac)

  15. EricPW – I am familiar with what insurance companies invest in. Why are you dodging the question?

    daleyrocks (940075)

  16. Why does the word “ideally” get included in there? Either they invested in something, or they did not. Most States have pretty specific regulations as to what insurance companies can invest in, how much they can invest, etc …

    JD (3dc31c)

  17. Oops, my comment got caught in the spam filter.

    John Hitchcock (9e8ad9)

  18. JD – It’s a presentation moderated by a guy from Milliman and the speakers are two guys on the investment side of Citigroup who are obviously trying to drum up business from the audience.

    daleyrocks (940075)

  19. daley – Am I correct in assuming that the link you just described in no way backs up the ridiculous statement EPWJ made above?

    JD (3dc31c)

  20. Ah, that’s what Obama meant by the okie-doke.

    Arizona Bob (e8af2b)

  21. If they want to keep the Social Security pension cap in place (at about $3K/month for a couple) and eliminate the cap on contributions, I’ll go for it one one condition: They put a cap on government pensions at the same amount, and also make government workers pay 6% of their wages into the pension fund, without a cap.

    See, we can fix that problem, too. Fair is fair.

    Kevin Murphy (5ae73e)

  22. “Most invested in bonds, t-bills – the base return”

    JD – The above are all securities. I want EricPW to explain what he meant, what bailouts he was referencing and the link between insurance companies and pensions he sees in his comment. Some of the concepts are simple, when interest rates go down, people may earn less on their fixed income investments and may take larger risks with their portfolios to boost returns, but he has not said that is what he is talking about.

    The problem with the state and municipal pensions is more asset based. They just don’t have the asset bases to pay the generous benefits they have promised under any kind of reasonable return scenarios, but that is not something he has described either.

    daleyrocks (940075)

  23. JD – Shorter answer, the study is irrelevant.

    daleyrocks (940075)

  24. Shorter Hiltzik: They took the social security money from you, spent it, and then printed up IOUs and put them in the Trust Fund. Safe as houses.

    Kevin Murphy (5ae73e)

  25. “Government Trust Fund” being an oxymoron, of course.

    Kevin Murphy (5ae73e)

  26. ““Government Trust Fund” being an oxymoron, of course.”

    Kevin Murphy – Remember the three biggest lies……

    daleyrocks (940075)

  27. Daley

    My explanation and study posted are more than enough information for understanding basic core investment strategies of annuities

    Feel free to post contrary information as necessary

    EricPWJohnson (c318ac)

  28. that still leaves 34% of the budget that goes to Medicare, Medicaid, CHIP, and other safety net programs. These programs are funded, not be payroll taxes, but by income taxes

    Correction: Medicare part A (hospital insurance) is largely funded by payroll taxes:

    How Are Social Security and Medicare Financed? For OASDI and HI, the major source of financing is payroll taxes on earnings that are paid by employees and their employers.

    Foo Bar (c1726e)

  29. daley, you mean like “I’m from the IRS and I’m here to deliver your free medical coverage. Bend over.”

    Kevin Murphy (5ae73e)

  30. Kevin – Right, it’s only a cold sore……

    daleyrocks (940075)

  31. Hiltzik = Horse Manure is an equation that has always worked for me.

    Rutten = Hiltzik is another equation that works for me when reading the Daily Dog Trainer.

    Mike Myers (3c9845)

  32. Post # 24 pretty well sums it up.

    Way to cut to the chase, Kevin.

    There’s not a dime in the social security trust funds. The idea that they’re trust funds is a total joke.

    The system has always worked exactly the same way, the government spends every single dime it gets, the second it gets it.

    And, only a total fool would voluntarily sign up for Social Security, because it’s never showed a dime in profit….and never will.

    A few years ago the Republicans were proposing turning it into a system where people could invest their money and get a return on it (like you’re supposed to do), but naturally the liberals shot that idea down, since they wouldn’t be able to steal from the system if that’s how it was run.

    Dave Surls (c66f40)

  33. You never know if Mr Hiltzik really knows what he’s talking about, and just lets his agenda get in the way, or if he’s just ignorant.

    The last public auction of the 10 year Treasury Bill was on May 12th, though there’s supposed to be another this week. The median yield was 3.51%, and the price was $990.598723 for a $1,000 par value TNX.

    The final number for the 2009 Porkulus Bill was $787 billion. Assuming it was all done at the May 10 year T-Bill auction rates — an oversimplification, but it makes the point — then the face value of the T-Bills issued to cover the $787 billion was $794.5 billion, and the annual payments owed the bond holders were $27.9 billion, for ten years. Total it all up and the $787 billion Porkulus Plan actually added $1,073.4 billion — that’s $1.073 trillion — to the national debt.

    At some point, that $1.073 trillion has to come back out of government coffers. Some of it will go to the Social Security Trust Fund, some will go to wealthier Americans, the ones with enough disposable income to invest in T-Bills in the first place (do our friends on the left realize that deficit spending by the federal government only makes the wealthy wealthier?), and some will go to overseas investors, leaving our economy entirely.

    And, in another irony, if our friends on the left get what they want, significantly higher taxes on the wealthy, they’ll force the yield on Treasury Bills higher, and the par value discount larger, because the wealthy will need higher returns to pay the increased taxes. And if foreign bidders manage to keep the yields lower, to the point where wealthy Americans decrease their participation, then you wind up sending more of the debt repayments abroad, removing it from our economy entirely.

    The Dana who tells it like it is (474dfc)

  34. When I get home I will do an update reflecting the fact that payroll taxes also fund Medicare, which is also funded by other sources including income taxes paid on Social Security benefits. I would do the update now but the new iPhone update helpfully makes it impossible to update long posts. Thanks, Apple!

    This is a tidbit which I caught before hitting publish but forgot to add. Foo Bar sent me an e-mail about it. It doesn’t change the argument, of course, which is that Hiltzik has misdirected readers on the fact that income taxes are not used to make fat cats fatter.

    Patterico (74c890)

  35. Patterico, I’ll see if I can find the link I had to an explanation of how the “rich” pay more in income taxes proportionately than even their share in income.

    SPQR (26be8b)

  36. Patterico, Here is an unfortunately old piece (2003) that shows how much the EITC exceeds the payroll tax amounts at some income levels. It does discuss how much tax relief occurred at those income levels as a result of the Bush era tax cuts.

    This from the Tax Foundation shows some of what I like to use to illustrate tax burden with this tidbit:

    In 2007, the top 1 percent of tax returns paid 40.4 percent of all federal individual income taxes and earned 22.8 percent of adjusted gross income. Both of those figures—share of income and share of taxes paid—are significantly higher than they were in 2004 when the top 1 percent earned 19 percent of adjusted gross income (AGI) and paid 36.9 percent of federal individual income taxes.

    For the first time this year, we are also presenting data on the top 0.1% of tax returns (the top 10 percent of the top 1 percent). This 10 percent of the returns in the top 1 percent amounts to only 141,000 tax returns but accounts for nearly 12 percent of the adjusted gross income earned and approximately 20 percent of the nation’s federal individual income taxes.

    I think these numbers put paid to the class warfare theme that the “rich” are not paying “their share”. In fact, they are paying their share as well as most of other people’s share.

    SPQR (26be8b)

  37. Why must you deny the truth, SPQR? You probably think that we have global cooling and that second hand smoke is good for you.

    JD (3dc31c)

  38. I’m confused, and need some assistance.

    Quoting Hiltzik: “Most Americans pay more payroll tax than income tax. Not until you pull in $200,000 or more, which puts you among roughly the top 5% of income-earners, are you likely to pay more in income tax than payroll tax. One reason is that the income taxed for Social Security is capped — this year, at $106,800″

    I don’t pay into SS because I’m in the Louisiana State Retirement System, nor do I pay Medicare/Medicaid because I’m not eligible under our retirement rules (hired pre-1984) but I am in the 29% or so tax bracket, and pay about 8% into the retirement system, along with FICA (don’t know the percentage, but I’ll guess 1 1/2%).

    How does Hiltzik say that people pay more payroll taxes than they do income taxes? Based upon what I pay, that would mean that people would have to pay about 40% MORE of their income to meet this standard, right???

    Help….

    reff (176333)

  39. Part of the confusion, reff, is between marginal tax rates and effective tax rates. Because of the way the tax tables work, your total income tax liability is not calculated at the marginal rate.

    SPQR (26be8b)

  40. reff – Hitzlik makes it confusing to cover for his lies. Either that, or he has not understanding of what he speaks.

    JD (3dc31c)

  41. I think I understand that, SPQR, but even then, I’m paying 29+% on 80% of my income, and payroll taxes would be about 8% on 100%, so, when does payroll tax PASS UP the amount paid on income tax???

    I understand that would happen if my income were only about $20K, with deductions and EITC, but, with 130 MILLION people in the workforce full time, his statement that “MOST AMERICANS” paying more payroll than income taxes would have to mean that only 60 MILLION would be paying “higher” income taxes….

    JD, I think the second is easily more true than the first, but, he is lying, as you and I both know….

    reff (176333)

  42. Let’s kill all the rich people, who own the majority of businesses, but most importantly small businesses, and see how long the US can survive? Good grief this guy is a leftist loon. What is it that these democrats have against the very people who employ the majority of Americans? Without them we’re screwed and as long as the dems are in power we are screwed!

    Atlanta Media Guy (60d291)

  43. Hiltzik either does not understand basic economics or he is trying to pull the wool over a lot of eyes.

    A commenter over at Megan McArdle’s blog this morning blurted out the truth. “How can 550 million selfish people making selfish decisions arrive at a just and equity society ” I can’t find the comment as she now has 560 comments in that thread but it was the classic complaint that free enterprise does not work. If you can get these people to blurt out the truth, they do not believe in markets, or free enterprise, or capitalism.

    Mike K (d6b02c)

  44. reff, some people also count both the employer-paid payroll taxes and the employee-paid payroll taxes in the equation. And I don’t think you are paying 29% on 80% of your income. I think your effective rate is lower than that. See tables 7 and 8 in the second link I posted above.

    SPQR (26be8b)

  45. SPQR’s first link at 6:48pm is what I was getting at. The chart shows a single parent with two kids making 20k and getting all her income tax, fica tax, medicare tax back and getting her employer’s contribution to her fica tax to boot. If she were to have made 15k, she would get all that back almost twice.

    So, again, what money from the lower end of the scale is the dud talking about?

    John Hitchcock (9e8ad9)

  46. Hitzlik makes it confusing to cover for his lies. Either that, or he has not(sic) understanding of what he speaks.

    I vote for the latter.

    AD - RtR/OS! (89e55e)

  47. I left out the other obvious possibility. Both.

    JD (3dc31c)

  48. Most Americans pay more payroll tax than income tax. Not until you pull in $200,000 or more, which puts you among roughly the top 5% of income-earners

    To call the BS is affront to all bulls.

    Neo (7830e6)

  49. Since 1983, the money from all payroll taxpayers has been building up the Social Security surplus, swelling the trust fund. What’s happened to the money? It’s been borrowed by the federal government and spent on federal programs — housing, stimulus, war and a big income tax cut for the richest Americans, enacted under President George W. Bush in 2001.

    Sorry to disappoint Michael Hiltzik, but since the LBJ administration, the government has been spending all of the social security money on other things besides social security.

    Neo (7830e6)

  50. … a big income tax cut for the richest Americans …

    When lefties use the line “tax cuts for the rich” on me, I stop and correct them: “You mean, ‘tax cuts for the only people who pay taxes,’ don’t you? What’s wrong with that?”

    Murgatroyd (fd5fcd)

  51. Hiltzik is simply parroting the BS that Moveon released about SS recently.

    Three links which explain why Moveon and Hiltzik are lying:

    http://www.zerohedge.com/article/social-security-mid-year

    http://market-ticker.org/archives/2422-Social-Security-Heres-The-Problem.html

    http://www.washingtontimes.com/news/2010/mar/16/social-security-ious-stashed-away-in-wva/

    Hiltzik and Moveon clearly have adopted the Lloyd Christmas argument:

    http://www.youtube.com/watch?v=7GSXbgfKFWg

    Another Chris (2e9afa)

  52. Hiltzik is not clever-he is just dense. I am a retired actuary and I can assure everyone that based on Social Security`s own actuaries the program is not billions, but is trillions of dollars underfunded. Furthermore the younger participants get back less than they put in even though he says the program is working well. His statements are evidence of his ignorance, since they are obviously wrong and show him to be uninformed and illogical.

    Richard Solomon (ecbd79)

  53. It’s certainly true that high earners are more heaviy taxed (paying most income tax), but it’s not easy for those in the lower tier.

    I worked as a teacher at a private school earning 11 bucks an hour. After my taxes it came down to around 9-10 bucks. I calculated payroll for Mexican workers at a fishing rod company making 11 to 12 bucks an hour. FICA and other taxes took away a healthy chunk.

    There are untold amount of businesses in LA that secretly pay (labor / Mexican) workers cash under the table. Illegal as that is, everyone wins in that arrangement. The workers get to keep the 50-100 dollars you might have had to fork over to the government. And if you told them that “You are not paying taxes to support others who are as poors as you”, they would either laugh at you, or hit you.

    Allowing worker to keep the money they make is surprisiningly popular among the poor.

    lee (cae7a3)

  54. Hiltzik has it basically correct. Starting with Ronald Reagan, payroll taxes have been INCREASED a few times, but ONLY income taxes have been cut. So there has been a transfer of the tax burden downward, onto the middle class. Here’s a picture of how it works:
    http://www.youtube.com/watch?v=Tts2uTWt6e8

    Lee A. Arnold (792eb4)

  55. Off Topic: Patricia Neal, Dead at 84 of Lung Cancer. R.I.P. What a gutsy lady she was.

    GM Roper (a0b04a)

  56. Another fudge that the left likes to use is that the employer component of payroll taxes is seen as employee income and counted as tax paid by the employee. If payroll tax is not withheld/paid (either employee or employer part), it is the employer who is liable for the tax and any penalties/interest. So who is really paying payroll taxes anyway?

    Bryn (026e67)

  57. The stimulus is a program designed “to help out those at the higher end”??

    Looked at Goldman-Sach’s profit reports lately? And, oh, BTW, what’s the unemployment rate?

    TARP, a subject conservatives love to harp on, didn’t bail out workers, nor did it bail out small businesses. It bailed out Wall St. charlatans, who, BTW, counted on the govt doing just what they did if they ever got into trouble.

    “As for war, you can agree or disagree on the need for the wars we are engaged in, but unless you believe that we have conducted wars in Afghanistan and Iraq for oil (and if we did, where is our damn oil?), those wars are conducted for the common good of the security of the entire country.”

    What I see is that neither war has been paid for, and we’ve borrowed billions for them, which is unprecedented in the history of the United States. In the past, we’ve always either raised taxes or issued war bonds (try a history book).

    “Hardly any of this goes to benefit the wealthy at the expense of the poor.”

    Really? Have a GPS? That is just one example of basic research conducted by the government which has profited big business. How about basic medical research? Or the development of the internet? Oil companies (which last I checked weren’t small businesses – feel free to correct me if I’m wrong) get billions in tax breaks, which the middle class pays for in increased income and gas taxes.

    The Bush tax cuts benefitted mostly the wealthy while increasing the debt that conservatives love to harp about by billions. As for that 1% you quoted, nearly 70% of the wealth in the United States belongs to the top 1% of income earners.

    Liberals are talking about the wealthy – who can afford it most – paying their fair share of taxes. I’m tired of carrying those who can most afford to pay. Even Warren Buffet, no liberal by a long shot, wonders why the percentage of taxes he pays is lower than his secretary’s.

    So why are you and other conservative advocating for the super wealthy?

    JEA (3fc310)

  58. btw, bad news for our regular Colonel Haiku. Jim Treacher declares that Haiku is never funny:

    http://dailycaller.com/2010/08/06/haiku-is-never-funny/

    Aaron Worthing (A.W.) (e7d72e)

  59. I don’t understand how Hitzik could possibly be correct. A quick look at the 2010 income tax rates, shows the bottom rate – 10% at8,375 or 838 dollars. the payroll tax is a flay 7.7% or 645 dollars. you don’t need 200,000 dollars of taxable income before your income tax exceed your payroll tax. And there is a point at which payroll taxes stop, whereas income taxes just go on and on. Something that most people could verify by a quick look at their pay stub – if they still have a job. Oh and why do leftist keep acting as if the government NOT taking YOUR money is giving you something

    Mike Giles (980220)

  60. JEA, wow, the Bush tax cuts increased the debt by billions … meanwhile the Democrats spending increased the debt by trillions.

    And as I’ve repeatedly established, the tax cuts did not benefit “mostly” the wealthy. You are not carrying Warren Buffet. I showed data above that shows that the “wealthy” are paying more than “their share”.

    SPQR (26be8b)

  61. Liberals are talking about the wealthy – who can afford it most – paying their fair share of taxes.

    Bull–liberals crying about “fairness” are thieves who need the government to rob from people because they are too lazy or cowardly to do it themselves.

    The only reason you’re crying about Goldman Sachs is because they figured out a more efficient way to steal from taxpayers and you can’t stand the competition.

    I’m tired of carrying those who can most afford to pay. Even Warren Buffet, no liberal by a long shot, wonders why the percentage of taxes he pays is lower than his secretary’s.

    Warren Buffet is free to not take any refunds on his tax returns, not claim any tax breaks, and send in more money to the government than he owes. So are Hollywood a**holes and limousine liberals who are constantly harping for higher taxes, and so are you.

    Maybe its time for these leftists who are constantly claiming they want to pay higher taxes to start leading by example.

    After all, you don’t want people to think the only reason you’d ever give the government your own money is if a gun is held to your head, right?

    Another Chris (2d8013)

  62. Another Chris, each time the Democratic shills repeat their lines, I point out that the data from the IRS shows that the “wealthy” pay a greater percentage of income tax than is their share of income. So they are paying more than “their share”.

    Shills like JEA utterly ignore that fact. And instead falsely claim the contrary without any data.

    SPQR (26be8b)

  63. “So are Hollywood a**holes and limousine liberals who are constantly harping for higher taxes, and so are you.”

    I deliberately refrained from referring to conservatives as morons in my original post for supporting millionaires and billionaires.

    Moron.

    JEA (3fc310)

  64. JEA, you deliberately refrained from adding an insult to your misrepresentation.

    How special.

    SPQR (26be8b)

  65. SPQR

    Not only do the top 1 to 5% pay the most taxes they in turn(many do) employ people directly who being employed also pay taxes (and these 1% also pay the 7.65% of the employer’s side as well) this raises greatly the total number – how much is a matter of conjecture but there is a significant effect

    EricPWJohnson (c318ac)

  66. Comment by JEA — 8/9/2010 @ 5:57 am

    If there’s something in there that demonstrates that the rich are the primary beneficiaries of govt. spending I missed it. Nor do I see anything demonstrating that they’re not paying their fair share.

    The one thing that appears to be about the rich is TARP $ going to Wall St “Charlatans” but you’d have a hard time demonstrating how those charlatans actually pocketed TARP money except maybe to the degree that they own stock in their own companies that would have gone down the tubes, as Lehman did. Only a small fraction of the stock is owned by their executives. Most is owned by pension funds, endowments, mutual funds held by small investors through 401(k)’s etc. The favorite target of airheads, other than Goldman Sachs, is hedge funds which didn’t get TARP money.

    In any case, most of TARP money was repaid some time ago. What GM got is still outstanding.

    Most rich aren’t on Wall Street anyway, but Wall Street seems to function as a kind of proxy for the rich in the minds of airheads.

    Your BS isn’t about demonstrating that the rich actually are major beneficiaries of govt., which is Hiltzik’s phony argument. It’s just “they’re not paying their fair share” repeated endlessly.

    BTW, Warren Buffett is a long time Democrat. Your point about “no liberal by a long shot” is more BS. Building an entire argument around a single quotation is stupid.

    Gerald A (138c50)

  67. and we’ve borrowed billions for them, which is unprecedented in the history of the United States

    Borrowing billions was unprecedented? I guess granting that, it makes Teh One’s multiple TRILLIONS in deficit and debt unprecedented.

    paying their fair share of taxes. I’m tired of carrying those who can most afford to pay.

    This is dishonest sophistry of the highest order. That is a lie and you are a liar.

    JD (5375e6)

  68. one can sit here all day and destroy Hiltzik’s week attempts to support the statist agenda.

    1. “But ask Peterson, who made his money as a hedge fund manager…” – Peterson made his money at a private equity fund, which is very different than a hedge fund. those who write about finance and economics would be doing themselves a favor in researching some 101 information.

    2. “…housing, stimulus, war and a big income tax cut for the richest Americans, enacted under President George W. Bush in 2001.” – blame it on Bush, rinse, repeat. the statists are becoming desperate.

    3. ‘ “This is the sort of argument my mother used to describe as: “I like me, who do you like?” ‘ – perhaps his regular readership is used to these bad analogies, but the rest of us can only laugh.

    4. “…let’s look at the encouraging findings by the agency’s trustees, who include the secretaries of Labor, the Treasury, and Health and Human Services.” – Right, I am sure that Geithner and Kathy Sebelius are going to be REALLY critical of a program that is championed by their party. If I were of lesser intellect, I might use the analogy (to describe the Geithner and Sebelius approval) of “I like me, who do you like?”.

    I can continue to destroy this guy’s article, however I have to get back to work and save my own money for retirement in 42 years (when Hiltzik won’t have to worry about HIS social security benefits) and MY social security benefits will be long gone.

    frank (501098)

  69. I deliberately refrained from referring to conservatives as morons in my original post for supporting millionaires and billionaires.

    Moron.

    Considering your argument is completely unsupported by the math, the facts, and the principles of taxation which you apparently support only in theory, you’re hardly one to be calling others morons.

    Moron.

    Another Chris (2d8013)

  70. And would you look at that–Karl Denninger, who I linked to above, takes a gander at Hiltzik’s vomit and rips him a new one:

    http://market-ticker.org/archives/2567-Here-Come-The-Lies-Social-Security.html

    Denninger also highlights one of Hiltzik’s biggest whoppers, which is quoted thus:

    Most Americans pay more payroll tax than income tax. Not until you pull in $200,000 or more, which puts you among roughly the top 5% of income-earners, are you likely to pay more in income tax than payroll tax.

    Funny, I’m looking right now at my payroll statement from last week, and it’s showing my salary at $59K, my OASDI deduction at $137, and my federal tax at $336.

    So even if you doubled my OASDI by the “employer contribution” it would still be short over $65.

    It’s amazing that Hiltzik (and Moveon) can lie so blatantly, apparently because they understand that they won’t be held accountable with say, jail or loss of employment for promoting blatant, naked fraud.

    Another Chris (2d8013)

  71. crissyhooten could not be reached for comment. Prolly because he is an idiot.

    JD (3dc31c)

  72. “What I see is that neither war has been paid for, and we’ve borrowed billions for them, which is unprecedented in the history of the United States. In the past, we’ve always either raised taxes or issued war bonds (try a history book).”

    LOL.

    What a total idiot.

    Dave Surls (9ec737)

  73. That Hitzilk guy sounds like he thinks there’s something in the Gorish “Social Security lock-box” besides lots and lots of worthless IOU’s…

    Frank Drebbin (8096f2)

  74. Indeed, Dave, someone does not know what “war bonds” are. It is pretty hilarious.

    SPQR (26be8b)

  75. “…someone does not know what “war bonds” are.”

    Obviously, not. Apparently he/she thinks when the government was trying to finance wars in the old days they went down to the bank and took out a second mortgage on the White House…or something.

    But, that’s not the only pronlem with that idiotic post.

    Dave Surls (9ec737)

  76. No, it isn’t, Dave. But I had missed that hilarious bit of moron goodness.

    SPQR (26be8b)

  77. As SSI begins to circle the drain in ever tighter spirals, it will be interesting to watch the logical gymnastics and lies the left vomits out in order to not spear one of their sacred cows.

    Being 42 (older end of Gen X), I can expect to live like a Soviet pensioner after the giant pulse of Baby Boomers collecting SSI runs its course. It’s doomed to die as any Ponzi scheme is. It’s just a question of when. Don’t piss on my leg and tell me it’s raining Mr. Hiltzik. Everything the left does is either an outright lie or it’s subterfuge.

    Maui (789664)

  78. JEA, a question: If the Bush tax cuts caused deficits to increase, what caused the amount of money collected by the government in income tax AFTER the tax cuts to INCREASE?

    Deficits can only increase–if the money coming in INCREASES–if spending increases as well at an amount HIGHER THAN THE INCREASE IN THE INCOME….

    Or, can you show me that I am wrong…..

    reff (176333)

  79. reff, it does not matter for two reasons. First, JEA has no clue about any real facts. Second, if JEA was right, which he isn’t, then there would not be a one and a half trillion dollar deficit projected in FY 2011 when all the evil Bush tax cuts end.

    SPQR (26be8b)

  80. Oh, and please remember that while tax cuts went to those who actually pay taxes, checks went out at the same time to those who don’t pay taxes (increasing the debt) and tax credits were increased for those who don’t pay taxes (reducing the actual amount that income taxes take in, again, increasing the debt)…

    So, tell us again how the amount of income tax collected by the government WENT UP AFTER THE TAX CUTS???

    reff (176333)

  81. I gotta say, JEA seems to me to be a SEKs wannabe. All the dishonest bombast, none of the intellect.

    John Hitchcock (9e8ad9)

  82. Well, you don’t need a whole lot of intellect to figure out that selling bonds is how the government usually borrows money, but apparently the concept is beyond some folks.

    Dave Surls (9ec737)

  83. I thinking of submitting JEA’s statement to Failblog.

    SPQR (26be8b)

  84. So, tell us again how the amount of income tax collected by the government WENT UP AFTER THE TAX CUTS???

    That information is easily found.

    Here’s a chart showing federal income tax revenues from 1995-2008, and projected to 2014. Note the declines in 2002 and 2003, as the country was coming out of a recession. Note that tax revenue almost doubled between 2003 and 2007, the sharpest rise on the chart.

    Some chump (e84e27)

  85. Thanks, “chump” …although I apologize for the name-calling in this response….

    reff (176333)


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