WOOTEN COLUMN: The tax bill for the non-rich also rises

  • Posted: Sunday, January 13, 2013 12:01 a.m.

BY FRANK WOOTEN

Ouch!

That cry of pain echoes across the land as Americans wince from the deeper tax bite on their first 2013 paychecks.

And yes, plenty of the heartfelt semantic variations on that theme of torment are unprintable in this family newspaper.

But while fresh-tax-burden anguish is understandable, the surprise is not.

Those who paid attention knew that the end of the two-year Social Security tax cut was coming, regardless of who won the “fiscal cliff” fight. They knew the cliff deal would boost taxes on more than just “the rich.”

So bid adieu to another 2 percent of your income as the Social Security tax on individuals reverts from the 4.2 percent of the last two years to the previous 6.2 percent.

And even with Washington again taking that full 6.2 percent from you plus a 6.2 percent match from your employer for Social Security, the aging entitlement system is still sliding down a slippery slope to demographically driven disaster.

Your employers didn't get that 2011-12 tax cut on their “contributions” to your “account” — that tax on them doesn't show up on your pay stub.

Meanwhile, lots of folks fairly resent the “entitlement” tag. After all, they — and their employers — have been paying into the program throughout their working lives. And 12.4 percent of all income up to $113,700 (as of this year) is a serious chunk of change.

However, the relentless decline in the ratio of Social Security payers to takers is also serious — as in seriously unsustainable.

In 1960, more than five Americans paid into the system for each one drawing benefits from it. Today that formula is barely above 3 to 1. In 20 years, it will be barely above 2 to 1.

Oh well, at least that added Social Security tax will go straight into its “trust fund” — or is it the “lock box” — to renourish the system's eroding resources, right?

Wrong. It all goes into the general federal revenue, which has been falling at least $1 trillion short of expenditures in every year of Barack Obama's presidency after never falling even a half trillion short before he entered the White House.

But though Obama has accelerated our descent toward bottom-line oblivion with, among other Nanny State notions, the laughably titled “Affordable Care Act,” keep in mind that Social Security was initiated nearly three decades before his birth.

Keep in mind, too, that Medicare is in far worse financial shape than Social Security — and that Obamacare is already imposing climbing tax tolls of its own.

And Congress isn't the only legislative body still dodging tough calls on overextended government promises. From Wednesday's Chicago Tribune:

“SPRINGFIELD — State lawmakers on Tuesday bequeathed the government worker pension problem to the next General Assembly, rejecting Gov. Pat Quinn's roundly criticized 'Hail Mary' plan to ask a committee to fix the worst-in-the-nation retirement system. The failure of the Democratic governor and legislators to start reducing a $96.8 billion pension debt threatens to divert more and more money away from education and social services toward retirement benefits.”

Many other states besides Illinois also face severe shortfalls in their retirement systems.

Fortunately, South Carolina isn't one of them.

Or is it?

Regardless, our state and many communities in it (including some in these parts) have developed a costly habit of raising sales taxes to fund basic needs — including education and infrastructure. Though that rising sales-tax tide doesn't show up on your paycheck, it reaches your wallet, whether you're rich, poor or otherwise.

And though the concept of government taking money from us to save money for our health care and retirements sounds swell to the naive, it's increasingly unaffordable. Too bad it also appears increasingly irreversible.

OK, America's evidently eternal duty as world cop isn't cheap, either.

So 17 years after President Bill Clinton prematurely proclaimed, “The era of big government is over,” we bitterly bicker over who must pay for its apparently inexorable growth.

As French sage Alexis de Tocqueville, in his 1835 “Democracy in America,” warned:

“A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.”

Thus, we keep arguing about what's a “fair share” — one of President Obama's favorite word pairings — of the tax load.

Just don't imagine that his or anybody else's “fair share” definition gives us a fair chance to balance a federal budget based on cradle-to-grave delusions.

In other words:

It's the spending, stupid.

And if you still think “the rich” can cover government's ever-escalating tab, check out your first 2013 paycheck.

Frank Wooten is assistant editor of The Post and Courier. His email is wooten@postandcourier.com.

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