Tax increases, loopholes, millionaires, social security and who pays?

by Richard Leonetti

The newspaper letters are full of opinions about tax increases, loopholes, social security and who should pay. Many writers do not appreciate the terms they are using.

If you pay any income tax at all your household is in the upper half of the income brackets. The lower half file returns but pay zero taxes or get a check back from those who do pay.

If you rail against big time investors you should know that public employees as a group are the biggest in Oregon. PERS has $50 billion invested in stocks, bonds, hedge funds, swaps etc. plus an implied note from Oregon taxpayers of $8 to $12 billion not funded. Some of these 200 thousand PERS beneficiaries have pensions and benefits that will pay out more than a million dollars–are these the “millionaires” we should be mad at?

When it comes to “loopholes”, two of the biggest are “no tax on health benefits paid by your employer” and the “deduction for mortgage interest.” For a renter or an employee whose employer does not buy his health insurance, these loopholes are unfair.

For those saying they “earned” their Social Security: be aware that you will receive substantially more than what you paid. The same goes for Medicare payments: a lot more benefits than you paid for.  This was made even worse last year when these payroll deductions were stopped as a “stimulus.”

Maybe the most difficult to understand is that corporations aren’t really the ones who end up paying for corporate taxes. If they only compete regionally, the tax the corporation pays gets built into their prices and the consumer pays. If they compete internationally, and there is a raise in corporate taxes, they become less competitive and the jobs move to other countries with lower taxes. All developed countries have lower corporate rates than the US.

A major reason our Congress can’t fix the jobs and debt problem is not that they don’t know what should be done. The problem is that citizens, who do not understand these complexities, threaten their next election instead of encouraging them to do the right thing.

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Posted by at 05:00 | Posted in Social Security, Taxes | 19 Comments |Email This Post Email This Post |Print This Post Print This Post

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