The Conservative Cave
Current Events => Economics => Topic started by: BlueStateSaint on October 23, 2010, 12:06:20 PM
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I wish the Republicans would make this argument.
U.S. Debt Is Child Abuse: Laurence Kotlikoff, Richard Munroe
By Laurence J. Kotlikoff and Richard Munroe - Oct 21, 2010 9:00 PM ET
Bloomberg Opinion
We don’t want to think about it, let alone read about it, but higher taxes are on the way.
Two tax hikes were passed this year and another is likely. These new taxes are supposedly being levied just on the rich. But over time, they will hit most of our kids. And they are just the beginning of our children’s and grandchildren’s tax trauma, given Congress’s inability to curb spending.
The two increases are for Medicare. They were buried inside the 2,000-page health-care bill and take effect in 2013. Earn more than $250,000 ($200,000 if single) and you’ll face an extra 0.9 percentage-point FICA tax for Social Security. And once your income passes this level, you’ll pay a 3.4 percent tax on your asset income.
These thresholds aren’t indexed for inflation, let alone growth in real incomes. So these taxes on “the rich†will eventually hit everyone as nominal incomes rise with inflation and productivity. Within 20 years most earners will be paying these new Medicare taxes.
The Alternative Minimum Tax also has thresholds that aren’t indexed for inflation. Congress has raised these levels to keep the share of taxpayers affected constant. But there is no guarantee it will continue to do so.
The rest is here:
http://www.bloomberg.com/news/2010-10-22/u-s-debt-is-child-abuse-laurence-j-kotlikoff-richard-munroe.html
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Congress has yet to act on the AMT this year. If they don't do it by December 31st, a lot of people will be screwed by it.