Posted on 03/18/2019 11:48:42 AM PDT by SeekAndFind
House Democrats are currently pushing the biggest tax increase that nobody's heard of.
Rep. John Larson, D-Conn., along with more than 200 Democratic cosponsors, recently introduced the Social Security 2100 Act. The legislation would raise the effective payroll tax rate by 2.4 percentage points, split between employer and employee, to 14.8 percent. And this tax increase would apply to all earned income.
At a Capitol Hill hearing this week, I testified about how this tax increase would hurt workers, entrepreneurship, and small businesses like mine.
Larson’s plan would increase small businesses’ annual payroll tax burden per employee earning $50,000 per year by $600, to $3,700. While the plan calls for a donut hole exemption between the current payroll tax cap of $132,900 and $400,000 of earnings, this ceiling is not indexed to inflation, meaning that within a couple of decades all employees, no matter their income, would be subject to it. Eventually, for an employee earning $200,000 a year, a business like mine would have to pay $2,400 more in payroll tax than we do today.
Consider the impact on a business employing 50 people at an average annual salary of $50,000. This tax increase would raise the business portion of payroll tax costs by $30,000, to $185,000. That increase amounts to the cost of hiring one new entry-level employee or giving significant wage increases to existing employees.
Businesses would fund such a tax increases by holding off on hiring or reducing employee wages. It would undo the benefits of the tax cuts that took effect last year and are allowing small businesses like mine to hire, raise wages, and expand.
(Excerpt) Read more at washingtonexaminer.com ...
For some small business owners who operate on tiny profit margins, this tax increase will put them out of business. Consider the restaurant industry, where profit margins pivot around 3 percent. Labor makes up about one-third of their total expenses. To raise restaurants' labor costs by 1.2 percentage points is enough to put some of them out of business altogether.
ABOUT THE AUTHOR OF THIS ARTICLE:
Joseph Semprevivo is the president and CEO of Joseph’s Lite Cookies in Florida and a member of the Job Creators Network. He is an adjunct professor of finance, real estate and insurance at Indian River State College
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My solution: Stop collecting “earned/taxable” income. And I’ll be 66 next year, at which point I’ll get full SS benefits, while supplementing my income with “gray market” income.
I’m almost done supporting this monstrosity.
We need a 20% import tariff and REDUCE marginal rates accordingly. As far a payroll taxes just lift the caps and screw over the high income types who are mostly libs anyway.
They would just steal the SS funds with IOU’s called US Government Bonds....................like they do now..................
Liberals don’t understand how businesses operate, or the financial impact of what they are proposing.
Many small businesses operate on narrow profit margins. And for many businesses of all sizes, the payroll expense, the costs of paying the hired help, is by far the biggest expense of operating the business.
Liberals just don’t understand, that you can’t just keep increasing taxes incrementally, without any consequences.
True, that’s exactly what has been happening, with Social Security tax payments being “borrowed” .
The major Social Security tax increases done during the Reagan era, were supposed to put Social Security on a sound financial footing. And that plan may well have worked, except for the fact that the tax money paid into Social Security, which was supposed to be dedicated to that purpose, was drained away through this “interfund borrowing”, or whatever technical term describes taking those funds and using for other purposes.
Plus you have the creeping benefits added to SSA. Now, there are numerous additional “hogs at the SSA trough,” including illegals who have become citizens and will get SSA benefits without having to have to contribute little or nothing during their “working lives!”
And they don't give a damn either. The total destruction of the nation is what they seem to seek.
Another incentive for automation and the elimination of low wage jobs.
“Florida”
The leftists are pushing a proposed Florida constitutional amendment to raise the Florida minimum wage to $10/hour by 2021, then by $1/hour per year thereafter to $15/hour, then by inflation thereafter.
The Florida economy is highly variable and highly seasonable and this amendment proposal allows for no adjustments for hard economic realities.
The sad fact is that the Social Security system is actuarially unsound. Fixing it is going to require some combination of (1) reduction in benefits (either by reducing payments/postponing scheduled increases already built into the system, or by further postponements to the age at which one becomes eligible for payments); and/or (2) increases in taxes.
Because either option is going to make voters angry at politicians, politicians will postpone taking action as long as possible. But that in turn will make the actions that will be necessary when the day of reckoning comes even more draconian.
Reality: deal with it.
highly seasonal
Thought it was those nasty pubbies always trying to mess with SocSec
one of the problems (beside congress stealing from the funds to use elsewhere) is Congress has allowed so many people to collect from SS that never should have been allowed...not to sound cold hearted......
The Wal-Mart nearest me just went from 22 cashier stations to 8.
The Lowes to the south of me has an automatic lawn mower on display outside. It’s $1,599 now, but maybe it might be $599 in five years.
Why sit on all that money and power without using it to buy votes?
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