Biden isn’t done taxing us to death. Read what he said
Words like 'fair share' mean Biden will raise taxes to pay for ever-growing government
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It’s not like much of what President Biden says is easy to understand these days, but when it comes to taxes, it is easy to understand the one line he keeps using repeatedly: "Make the wealthy pay their fair share!"
During the debate against former President Trump, when asked how he would keep Social Security solvent, Biden doubled down on promises he made during the State of the Union that the wealthy would pay more toward solving the Social Security concern.
No mention that people are living longer and the possibility of increasing the full retirement age for millennials or Generation Z.
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No mention of possibly increasing payroll taxes on a gradual basis for all Americans over the next 10 to 20 years.
President Biden discussed tax hikes during the CNN Presidential Debate, but it got overshadowed by his other failings. (Justin Sullivan/Getty Images / Getty Images)
No mention considering a long-term strategy of privatizing the Social Security system.
Here’s a question: How could it possibly be fair for someone to put 100 times more money into any system and get less out of the very same system? Unless, of course, you believe in socialism over capitalism.
We know Social Security’s trust funds are facing a black cloud depletion date. Based upon the current projections, the program’s trustees project that Social Security’s combined funds may run out in 2035, at which point Americans will only be able to get 83% of their current benefits unless Congress acts sooner.
If you think about the government like a business (a badly run one), we really have three broad ways we bring in income, since the government doesn’t sell cheeseburgers and we don’t make money putting things on Amazon. Here’s what they are:
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- Personal income tax (47% of U.S. revenue)
- Payroll tax (Social Security and Medicare) (37% of U.S. revenue)
- Corporate income tax (9.5% of U.S. revenue)
On the opposite side of the ledger, we run an annual fiscal deficit of roughly $1.8 trillion, and here are the top four expenses:
President Biden and former President Trump's debate is displayed on a TV screen in Virginia on Thursday. (Celal Gunes/Anadolu via Getty Images)
- Medicare/Medicaid (24% of spending)
- Social Security (22% of spending)
- Defense (13% of spending)
- Net interest on the debt (11% of spending)
Biden never discusses cutting expenses as part of the solution because he’s for big government and getting bigger. When he shares his complete lack of understanding about payroll tax by saying that the wealthy should pay their fair share, he fails to forget that his substantive change to Social Security taxation would impact corporations, small business owners and inevitably the job market.
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If you don’t understand how Social Security (FICA on your paystub) tax works today, here’s a basic explainer:
As an employee, you pay 6.2% of every paycheck into Social Security until you hit the FICA wage base cap, which is $168,600 in 2024.
In addition, your employer also pays the same 6.2% with the same cap.
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If you are self-employed, you get the full enjoyment of paying both halves of the Social Security tax. (Note: You do get a small tax deduction come tax filing time.)
We know Social Security’s trust funds are facing a black cloud depletion date. Based upon the current projections, the program’s trustees project that Social Security’s combined funds may run out in 2035, at which point Americans will only be able to get 83% of their current benefits unless Congress acts sooner.
At the debate, Biden mumbled the same rhetoric that he would like to see Social Security become an "infinite" tax once you hit the $400,000 mark of income. This means that both you and your employer would be responsible to pay in an additional 6.2% on every dollar of income you earn above that level.
This is actually a slightly backhanded way of increasing corporate tax while you increase personal tax on Americans working hard to earn money. And, because the "doughnut hole" — the amount you make between $168,600 and $400,000 is not that great of a gap anymore, it doesn’t take a huge leap of logic for the government under Bidenomics to just author up that Social Security becomes a perpetuity tax altogether under its second administration should that come to fruition.
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It’s no big surprise that the only solutions the current administration comes up with are to tax the wealthy more. If jobs have grown so much, where is all the tax money? If the economy is doing so well, where is all the tax money? It’s going into the black hole of an ever-expanding government.
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Very soon it could be financial death by a thousand tax increases for those who have done well. Higher capital gains taxes. Infinite Social Security tax. Taxes on unrealized capital gains. Higher ordinary income taxes. And more.
President Biden might not be able to complete all sentences, but the one he can always finish is that the "wealthy should pay their fair share."
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Ted Jenkin is CEO and co-founder of Oxygen Financial and president of Exit Stage Left Advisors.