The Return of the Inflation Tax

[TheMercenary]

Inflation tax is real and measurable. Do your own research people.

The Pelosi-Obama health tax surcharge will have a similar effect. The tax would begin in 2011 on income above $500,000 for singles and $1 million for joint filers. Assuming a 4% annual inflation rate over the next decade, that $500,000 for an individual tax filer would hit families with the inflation-adjusted equivalent of an income of about $335,000 by 2020. After 20 years without indexing, the surcharge threshold would be roughly $250,000.

And by the way, this surcharge has also been sneakily written to apply to modified adjusted gross income, which means it applies to both capital gains and dividends that are taxed at lower rates. So the capital gains tax rate that is now 15% would increase in 2011 to 25.4% with the surcharge and repeal of the Bush tax rates. The tax rate on dividends would rise to 45% from 15% (5.4% plus the pre-Bush rate of 39.6%).

As for the business payroll penalty, it is imposed on a sliding scale beginning at a 2% rate for firms with payrolls of $500,000 and rising to 8% on firms with payrolls above $750,000. But those amounts are also not indexed for inflation, so again assuming a 4% average inflation rate in 10 years this range would hit payrolls between $335,000 and $510,000 in today's dollars. Note that in pitching this "pay or play" tax today, Democrats claim that most small businesses would be exempt. But because it isn't indexed, this tax will whack more and more businesses every year. The sales pitch is pure deception.

As for the Senate, instead of the 5.4% surcharge, the Finance Committee bill raises taxes on "high-cost" health care plans. But this too uses the inflation ruse. The Senate bill indexes its tax proposal for the inflation rate plus one percentage point. But that is only about half as high as the rate of overall health-care inflation, i.e., the rate of increase in health-care premiums. So the Joint Tax Committee has found that a Senate tax that starts in 2013 by hitting 13.8 million Americans will hit 39.1 million by 2019.

The return of the inflation tax demonstrates once again the stealth radicalism that animates ObamaCare. In the case of inflation indexing, Democrats would repeal a 30-year bipartisan consensus that it is unfair to tax unreal gains in income, thus hitting millions of middle-class Americans over time with tax rates advertised as only hitting "the rich." Oh, and the House vote on this exercise in dishonest government will come as early as Saturday.

Originally Posted by TheMercenary

Inflation tax is real and measurable. Do your own research people.

The same bullshit assumption in your article:

Assuming a 4% annual inflation rate over the next decade,

There has NEVER been 10 straight years of a 4% annual inflation rate. No where close.

As for the business payroll penalty, it is imposed on a sliding scale beginning at a 2% rate for firms with payrolls of $500,000 and rising to 8% on firms with payrolls above $750,000.

Nearly 90% of businesses in the country will not be subject to the "penalty" and the smallest businesses are exempt...the others will not be penalized, but in fact, will get tax credits, if they provide (and share the cost with employees) of basic coverage.

I guess you think if you repeat it, it makes it more credible.

[TheMercenary]

Originally Posted by Redux

The same bullshit assumption in your article:There has NEVER been 10 straight years of a 4% annual inflation rate. No where close.
Nearly 90% of businesses in the country will not be subject to the "penalty" and the smallest businesses are exempt...the others will not be penalized, but in fact, will get tax credits, if they provide (and share the cost with employees) of basic coverage.

I guess you think if you repeat it, it makes it more credible.

You have provided no evidence that the numbers do not add up or that the facts are false about Inflation Tax. You don't have the credibility to say it is false. I agree that inflation has not been 4% for 10 straight years. The tax still exists.

Originally Posted by TheMercenary

You have provided no evidence that the numbers do not add up or that the facts are false about Inflation Tax. You don't have the credibility to say it is false. I agree that inflation has not been 4% for 10 straight years. The tax still exists.

Over 99% of taxpayers will not face the surcharge on income....it would initially only impact the top 1/2 of one percent of taxpayers....those making over $500K.

In ten years, based on assuming more reasonable inflation rates, it may hit a very small percentage of additional taxpayers...perhaps another 1/2 percent to maybe as high as an additional two percent of all taxpayers....with at least 98% of taxpayers remaining unaffected.

Does it bother me that in 10 years, the top 2% of taxpayers (those now making approx. $300K, but who would see their income rise in 10 years), rather than just the top 1/2 of one percent (those now making over $500K), may face a small surcharge on their income?

Not in the least. I would charge those fat cats now if I had my way.

[TheMercenary]

Originally Posted by Redux

Does it bother me that in 10 years, the top 2% of taxpayers (those now making approx. $300K, but who would see their income rise in 10 years), rather than just the top 1/2 of one percent (those now making over $500K), may face a small surcharge on their income?

Not in the least. I would charge those fat cats now if I had my way.

That is exactly why you represent wealth redistribution programs.

[Urbane Guerrilla]

Originally Posted by Redux

Does it bother me that in 10 years, the top 2% of taxpayers (those now making approx. $300K, but who would see their income rise in 10 years), rather than just the top 1/2 of one percent (those now making over $500K), may face a small surcharge on their income?

Not in the least. I would charge those fat cats now if I had my way.

A small theft is theft nonetheless, Redux, however disguised in righteous-sounding language. Now I begin to see the core of your mentality -- that is, the thing that keeps you a Democrat when men of sense (for instance, registered independent voters) are abandoning the Donkey Party right, left, center, top, and bottom. You're fighting a class-war. This is the hobgoblin of the small and resentful mind.

So of course, I do not do what you do; I make a point of not going around fighting a class-war. It's unworthy of me, and should be unworthy of you as well -- but for some damnfool reason I can't plumb, you don't really want me to regard you as intelligent. Thing is, I'd really rather I could think of you as a smart, with-it kind of guy. Not, IOW, as a moderately dilute socialist.