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Debt ceiling battle exposes the lie of those that claim most low income Americans don’t pay federal income taxes

File under the category that a rose by any other name smells as sweet

Outside Martha’s Vineyard, Americans are suffering the natural result of super-majority Democratic Party economic policies. Natural Law and history compel the expectation of one party Republican rule in Washington after next year’s elections, but only GOP super-majorities would have the power to repeal ObamaCare and other anti-job creation policies passed the first two years of President Barack Obama’s Administration.

One way to ensure that conservatives will not maximize their opportunity to duplicate the historic 2010 Republican landslide is to antagonize lower income workers generally favorable to the Democrats by continuing to insult their intelligence by insisting that they “don’t pay any federal income taxes.”

Paul Ryan, Rush Limbaugh and Sean Hannity et al need to cease and desist from their semantic game, especially after the debt ceiling battle exposed the Social Security Trust Fund as a fiction and before the expected debate on tax reform begins as a means to avoid the sequestration of national defense when the Super-Committee is inevitably deadlocked on Thanksgiving Day.

Yes, presidents and congresses since the 1980s have incrementally exempted more and more income from federal income taxes. But the federal government taxes every dollar earned by low income workers under the “FICA”, i.e. Social Security rubric (as well as Medicare) and commingles those dollars with the “Federal Income Tax” dollars and other government receipts (and borrowed funds) to pay for all domestic and defense spending as well as Social Security payments.

There simply is no difference between the two and it is long past time for Republicans to quit talking out of both sides of their mouth on the issue.

Money taken out of one’s paycheck by Washington is no less taken out by differences in labeling. Those that continue to do so insult the working poor and qualify as Gore Lock Box Know Nothings.



Yes, those low income workers that receive Earned Income Tax Credits (EITC) in excess of FICA taxes would accurately be characterized as paying no federal income tax, but that population is many times smaller than low income workers that are net federal income tax payers, whatever the nomenclature.

Surviving Post-Martha’s Vineyard America through the end of the Age of Obama

Despite the Vacationer-in-Chief’s promise to wield a job-creating shovel after the Dog Days of August, we understand the very long odds of the enactment of policies conducive to economic recovery so long as The One Who Puts the National Interest First deems those advancing such policies as traitors.

However, the deep and widespread suffering of millions of Americans and the defense sequestration train wreck scheduled for November make it imperative that Republicans try to reach a compromise with ObamaPatriot.

The Super Committee formed pursuant to the Debt Ceiling deal will almost surely deadlock, thus ensuring draconian cuts to national defense, unless real tax reform favored by the GOP can satisfy Democrats need for a class warfare talking point. Should we embark upon that course, I hope that Republicans will recognize the regressive FICA tax as the federal income tax that it is.

Real tax reform that would increase revenues would entail the lowering of income, corporate and capital gains tax rates in exchange for the elimination of tax subsidies. We would hope that deductions for mortgage interest, medical costs and charity remain intact.

The Republican Party has long been the party of the working man, if that mantra is defined as advancing policies that actually increase the number of people with jobs allowed to keep more of the fruits of their labor. It is high time that they tout this fact and adopt the rhetoric that can combat the class warfare of the Democrats, rather than running campaigns as if they were applying for jobs as CPAs.

It is not the politics of envy for the GOP to point out that our policies help lower income Americans, as well as all the rest. It will be much easier to do so if we stop repeating the fiction that federal FICA income taxes are not federal income taxes.

Mike DeVine

Editor – Hillbilly Politics

Co-Founder and Editor – Political Daily

Atlanta Law & Politics columnist –

“One man with courage makes a majority.” – Andrew Jackson

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4 Responses to Republicans must end Orwellian FICA tax blindness

  • BB_idaho says:

    FICA can be considered a tax, but it (formerly) was sort of a gov’t 401K..a
    personal investment with a personal return in old age. The talk of taxes, the tax burden and its effect on the economy continues to puzzle me in light of
    GDP growth bottom end Fed Tax top end tax

    1950 16% 17.4% 84%
    1953 13% 22% 92%
    1955 12% 20% 91%
    1977 17% 14% 70%
    These high federal tax rates were cut significantly in 1987 to 11%/38%
    and are currently the lowest in 60 years at 10%/35%. And since 1987
    there has been no GDP growth over 7%. Apparently no one ever looks
    at such data, but if anything, it shows no relation between the federal
    tax rate and the success of the market economy. (Or maybe a gov’t
    which provides great infrastructure spurs business growth?)

  • Mike DeVine says:

    A very small % of Blacks ever draw Soc Sec.

    Very, very, selective data on GDP and tax rates. Clearly cutting marginal tax rates makes investment and job creation more likely than not, ALL OTHER THINGS BEING EQUAL. Of course, things are not always equal and many other factors affect GDP in a particular year, especially very high rates like 7%. Comprehensive data shows that clearly the CHANGE downward in tax rates in the 20s, 60s, 80s and early 2000s boosted GDP. But I do think that unique characteristics of this jobs recession would benefit from some demand side stimulus like a payroll tax cuts a swell, so long as the cut is permanent. These temporary rate cuts squander the full incentive effects. Who creates jobs for only a year or two? But the underlying problems today, even more than individual tax rates are the loss of wealth in the housing bubble that will have to be be re-built with saving and TIME; the temp nature of the rate cuts; too high corp rate and cap gains rate; regulations that have kept housing prices from reaching a bottom; regs that make job creation unprofitable; etc…more later…I would say that the stats you cite are more relevant concerning how rare are 7% or higher GDP in our history and the fact that too many Americans were fooled into thinking the late 90s were the norm, when that 7% was fueled by tech gains from new inventions and a tech bubble.

  • BB_idaho says:

    RE: “investment and job creation more likely than not, ALL OTHER THINGS BEING EQUAL. Of course, things are not always equal and many other factors affect GDP in a particular year,” Absolutely. I began questioning my financial advisor as far back as 1975 about the shrinkage of the US mfg sector..and after 40 years of that continuing (increasing) problem, I am certain that factor is basic to current economic problems…and see no political solution. 🙁

August 2011
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