Friday, September 24, 2021
HomePatriot DispatchesRepublicans must end Orwellian FICA tax blindness

Republicans must end Orwellian FICA tax blindness

Debt ceiling battle exposes the lie of those that claim most low income Americans don’t pay federal income taxes

File under the category that a rose by any other name smells as sweet

Outside Martha’s Vineyard, Americans are suffering the natural result of super-majority Democratic Party economic policies. Natural Law and history compel the expectation of one party Republican rule in Washington after next year’s elections, but only GOP super-majorities would have the power to repeal ObamaCare and other anti-job creation policies passed the first two years of President Barack Obama’s Administration.

One way to ensure that conservatives will not maximize their opportunity to duplicate the historic 2010 Republican landslide is to antagonize lower income workers generally favorable to the Democrats by continuing to insult their intelligence by insisting that they “don’t pay any federal income taxes.”

Paul Ryan, Rush Limbaugh and Sean Hannity et al need to cease and desist from their semantic game, especially after the debt ceiling battle exposed the Social Security Trust Fund as a fiction and before the expected debate on tax reform begins as a means to avoid the sequestration of national defense when the Super-Committee is inevitably deadlocked on Thanksgiving Day.

Yes, presidents and congresses since the 1980s have incrementally exempted more and more income from federal income taxes. But the federal government taxes every dollar earned by low income workers under the “FICA”, i.e. Social Security rubric (as well as Medicare) and commingles those dollars with the “Federal Income Tax” dollars and other government receipts (and borrowed funds) to pay for all domestic and defense spending as well as Social Security payments.

There simply is no difference between the two and it is long past time for Republicans to quit talking out of both sides of their mouth on the issue.

Money taken out of one’s paycheck by Washington is no less taken out by differences in labeling. Those that continue to do so insult the working poor and qualify as Gore Lock Box Know Nothings.

Yes, those low income workers that receive Earned Income Tax Credits (EITC) in excess of FICA taxes would accurately be characterized as paying no federal income tax, but that population is many times smaller than low income workers that are net federal income tax payers, whatever the nomenclature.

Surviving Post-Martha’s Vineyard America through the end of the Age of Obama

Despite the Vacationer-in-Chief’s promise to wield a job-creating shovel after the Dog Days of August, we understand the very long odds of the enactment of policies conducive to economic recovery so long as The One Who Puts the National Interest First deems those advancing such policies as traitors.

However, the deep and widespread suffering of millions of Americans and the defense sequestration train wreck scheduled for November make it imperative that Republicans try to reach a compromise with ObamaPatriot.

The Super Committee formed pursuant to the Debt Ceiling deal will almost surely deadlock, thus ensuring draconian cuts to national defense, unless real tax reform favored by the GOP can satisfy Democrats need for a class warfare talking point. Should we embark upon that course, I hope that Republicans will recognize the regressive FICA tax as the federal income tax that it is.

Real tax reform that would increase revenues would entail the lowering of income, corporate and capital gains tax rates in exchange for the elimination of tax subsidies. We would hope that deductions for mortgage interest, medical costs and charity remain intact.

The Republican Party has long been the party of the working man, if that mantra is defined as advancing policies that actually increase the number of people with jobs allowed to keep more of the fruits of their labor. It is high time that they tout this fact and adopt the rhetoric that can combat the class warfare of the Democrats, rather than running campaigns as if they were applying for jobs as CPAs.

It is not the politics of envy for the GOP to point out that our policies help lower income Americans, as well as all the rest. It will be much easier to do so if we stop repeating the fiction that federal FICA income taxes are not federal income taxes.

Mike DeVine

Editor – Hillbilly Politics

Co-Founder and Editor – Political Daily

Atlanta Law & Politics columnist –  Examiner.com

“One man with courage makes a majority.” – Andrew Jackson

More DeVine Gamecock rooster crowings at Modern ConservativeUnified Patriots,  and Conservative Outlooks. All Charlotte Observer and Atlanta Journal-Constitution op-eds archived at Townhall.com.

Mike gamecock DeVine
A trial lawyer for two decades in South Carolina; owner of Ati Vista LLC since 2002 now associated with Lupa Law Firm; VP & Counsel for Buddy Allen Roofing & Construction Inc. since 2016 in Atlanta, Georgia; and a freelance writer, DeVine was the conservative voice of the Charlotte Observer from 2006-8 and has been the owner of HillbillyPolitics.com since 2009. www.devinelawvista.com

18 COMMENTS

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18 COMMENTS

  1. I am on your side on this one. The hyperbole by the right about over 50% of Americans don’t pay taxes is just as awful as the hyperbole of the left that the rich are not paying enough taxes. The truth in both cases has to do with a much smaller number of Americans using tax credits and tax deductions and tax loop holes. I am not like Grover Norquist and demanding that any tax reform must be revenue neutral. I am also not like the far left who think that raising taxes fixes everything. Anything they do will only bump taxes up to a little over 18% GDP. The spending must be cut to about 18% GDP, and a lot more is required on the spending than is required on taxing side of the ledger.

    I am retired and don’t pay FICA. I pay about 2 grand to the IRS a year for my retirement pension, and I have no credits or deductions to take advantage of.

    • >>Anything they do will bump taxes up to a little over 18% of GDP.<< Be careful with that one Pilgrim. The numbers may be factual but the damage that can be done by constantly jacking with the tax code can be huge. The consequences to various individuals, companies and regions of the country can be devastating. I don't want to pay more taxes and the beast is very well fed already. It's the spending. As for those low income earners and the bite they get from FICA: My experience at our company, where about 1/2 make 22-32k a year is that nearly everyone of them get a large EITC check from the IRS. Most of them will not participate in our health plan (their cost $16 per wk). They rely on medicaid and most have housing subsidies. Nearly all get food stamps. Hey, people have eat and all that but you know what. . . these same employees have big flat screen TVs with fancy game systems attached. They need to have SOME skin in the game and the truth is they don't. Now, if you want to take away all the tax deductions and give me a straight up 18-20% tax bite, I'm in. Of course in he middle of a government driven housing depression, there is no chance of that.

      • Now, if you want to take away all the tax deductions and give me a straight up 18-20% tax bite, I’m in.

        I’m all in, especially if everyone pays. I pay FICA too, then the Fed takes even more. I don’t get it back, I’m a small business owner. I pay and pay trying to keep up with what the changes will be by April. You may have noticed texasgalt, you can’t catch up.

        • Let me just say, how the 51% who pay no taxes works, take me, I pay 300+ bi-weekly to the Fed, and then another 120+ to the State and then I get hit for 90+ in FICA, so when they are talking about those who are NOT paying FEDERAL taxes, they are talking about those who are NOT paying the prior TWO taxes I mentioned, of course everyone is paying FICA, because EVERYONE is supposed to be paying for their retirement….does it bother me the Republican Party talking about the 51% who pay NO FEDERAL INCOME TAX, no at all, everyone has to have skin in the game or those 51% will never vote for anyone but the Democrats who allow them to pay ONLY FICA!

          Do I want a FairTax and Flat-tax that makes everyone pay something, damn straight, but when I see 20 somethings with 3 kids, getting back every damn dime they gave the government and EXTRA (and I am 0 single) while I have to cut a check every year for more, because I don’t have deductibles, that sucks!

      • Don’t worry TG that I am going to start rooting for jacking with the tax code. I just wince a little bit when some on the right use the hyperbole that over half of the country are getting EITC checks, medicaid, section 8 housing subsidies, and food stamps. I can only speak for myself. I do not get any of that stuff. I am not complaining. I just don’t like getting lumped in with other people based on earnings.

  2. Some people get more than 100% back with the EITC.

    And the thing that makes me the craziest about the EITC? Why do we select people with kids and say that they should get their FICA tax back, but a guy without kids gets screwed? It makes no sense.

      • Yes, EITC that exceeds all federal income taxes one pays is welfare for the working poor. Of course, most welfare spending goes to bureaucrats that administer welfare and people that earn have no income. In my mind the most “wrong” among those three categories are the funds spent on anal examiners for the feds. My column was not about the rightness or wrongness of EITC, but rather about the accuracy of popular but false claims about same. Now, THE conservative economic guru, Milton Friedman, long ago (70s) proposed doing away with most of the federal welfare bureacracy via a negative income tax that would be an expanded EITC in essence and Charles Murray wrote an excellent defense of same as a moral instrument. Of course, this assumes that we still support Reagan’s support for a federal safety net for the truly needy. I still do with major reforms but I am also open to a total return to the states depending on specifics and transition policy. The fact is that today, under present law, nowhere near 50% of workers pay no federal income tax accurately defined and to say so is to alienate the vast majority of low income workers that do not get EITC or who pay much more in FICA than they get in EITC credits.

    • Yes, “some” people get more than 100% back due to EITC, but nowhere near 50% of taxpayers, hence my objection to those that say so. Since there is nothing but IOU’s in FICA and since the taxes paid under than rubric go into the kitty with all other federal revenues, it is grossly misleading to say that most low income workers “pay no federal taxes”. It is Orwellian and insulting to hard working poor people and lower income people to use that vague rhetoric.

      • I agree with the premise of your dispatch. All the tax receipts of the Federal gov’t, regardless of their name, go into the same pot and we set ourselves up to look like liars if we try to parse the words, a la Bill Clinton, to say that *income* taxes are the only ones we talk about when FICA is a tax on income.

        If I had my way, there would be no separate tax bill for FICA vs. income and the EITC would not exist. Too bad I’m not really the Queen.

  3. Mike, I’m not sure how to respond to this. On one hand, we do need to address how economic redistribution is applied via our tax code. It’s long past time for our nation to start addressing this issue honestly. OTOH, we do need to keep in mind that this is likely to scare the wits out of those who are dependent on our welfare system for their survival. I’m not sure where the middle of the road is, so to speak, but I don’t think avoiding the issue will help us to resolve it.

    BTW, for those who think EIC is a problem, just wait until you see what the government has in store for us via public health insurance exchange subsidies.

    • Yes, I support major tax reform. In the meantime, let’s not right a sequel to Orwell’s 1984 and adopt some superiority complex based on nomenclature distinctions without a difference when speaking of those that pay federal income taxes. FICA is a federal income tax and most low income workers do not get EITC that exceeds their combined tax bill for FICA, Medicare and “regular” federal income taxes. all of which goes into the same kitty to pay all bills before we print QE’s or borrow from Red China.

  4. I do not see how continuing to use the 50% pay no income taxes will be of use to us going forward. For every pundit or broadcaster who says this, the person on their left says, that is wrong because FICA is a federal tax on payroll earnings.

    A better way forward is to concentrate on inflation, unemployment, foreclosures and the loss of our health care system. IOW socialism’s failures.

    The collectivists are rope a doping us into the mirror image of their class warfare. They want the rich to pay and they think we want the poor to pay. The problem is with using this argument as a stand alone instead of explaining it as part of a growth agenda.

    If we had real debates we would see what the candidates have to say about all this. But instead we are treated to the ravings of a senile poltroon.

  5. While I usually find myself in agreement with GC, on this topic I will demur.

    Messaging is all about who controls the language (eg. Pro-Choice/anti-abortion rights vs Pro-life/Pro-Abortion). I will not cede this ground until the Left stops caterwauling about the “rich” not paying their fair share.

    I believe that we can turn this into a ‘two-fer’ for our side – we can dispose of the myth that job creators aren’t paying their fair share whilst simultaneously pointing out that the SS emperor is wearing no clothes.

    More later (to coin a phrase from our esteemed Dispatcher 🙂

    • Of course I am with you on the Left’s attacks on “the rich”. I don’t see how cutting thru the semantics on what is deducted from lower income workers is related at all. Moreover, only AFTER I wrote this column did I google and see that many on the left have criticized claims that 50% of workers “pay no federal taxes”. I was motivated to write this column based on my own revulsion at the half truths coming out of the mouths of my hero Rush Limbaugh and Paul Ryan and other conservatives. It is not ceding ground to the left to tell the truth. I think my column makes a more nuanced argument that the left, as they never bring up the EITC. More later brother

      • Same here, my brotha from anotha mutha. Will pen more later but for know, it’s hard to push back on the ridiculous amounts of FIT that the top 5% are paying w/out mentioning that the bottom 50 pay nada.

        But bashing the bottom 50 just for giggles and chips…yeah, I’m totally in the same boat as you.

        It’s counterproductive.

  1. I am on your side on this one. The hyperbole by the right about over 50% of Americans don’t pay taxes is just as awful as the hyperbole of the left that the rich are not paying enough taxes. The truth in both cases has to do with a much smaller number of Americans using tax credits and tax deductions and tax loop holes. I am not like Grover Norquist and demanding that any tax reform must be revenue neutral. I am also not like the far left who think that raising taxes fixes everything. Anything they do will only bump taxes up to a little over 18% GDP. The spending must be cut to about 18% GDP, and a lot more is required on the spending than is required on taxing side of the ledger.

    I am retired and don’t pay FICA. I pay about 2 grand to the IRS a year for my retirement pension, and I have no credits or deductions to take advantage of.

    • >>Anything they do will bump taxes up to a little over 18% of GDP.<< Be careful with that one Pilgrim. The numbers may be factual but the damage that can be done by constantly jacking with the tax code can be huge. The consequences to various individuals, companies and regions of the country can be devastating. I don't want to pay more taxes and the beast is very well fed already. It's the spending. As for those low income earners and the bite they get from FICA: My experience at our company, where about 1/2 make 22-32k a year is that nearly everyone of them get a large EITC check from the IRS. Most of them will not participate in our health plan (their cost $16 per wk). They rely on medicaid and most have housing subsidies. Nearly all get food stamps. Hey, people have eat and all that but you know what. . . these same employees have big flat screen TVs with fancy game systems attached. They need to have SOME skin in the game and the truth is they don't. Now, if you want to take away all the tax deductions and give me a straight up 18-20% tax bite, I'm in. Of course in he middle of a government driven housing depression, there is no chance of that.

      • Now, if you want to take away all the tax deductions and give me a straight up 18-20% tax bite, I’m in.

        I’m all in, especially if everyone pays. I pay FICA too, then the Fed takes even more. I don’t get it back, I’m a small business owner. I pay and pay trying to keep up with what the changes will be by April. You may have noticed texasgalt, you can’t catch up.

        • Let me just say, how the 51% who pay no taxes works, take me, I pay 300+ bi-weekly to the Fed, and then another 120+ to the State and then I get hit for 90+ in FICA, so when they are talking about those who are NOT paying FEDERAL taxes, they are talking about those who are NOT paying the prior TWO taxes I mentioned, of course everyone is paying FICA, because EVERYONE is supposed to be paying for their retirement….does it bother me the Republican Party talking about the 51% who pay NO FEDERAL INCOME TAX, no at all, everyone has to have skin in the game or those 51% will never vote for anyone but the Democrats who allow them to pay ONLY FICA!

          Do I want a FairTax and Flat-tax that makes everyone pay something, damn straight, but when I see 20 somethings with 3 kids, getting back every damn dime they gave the government and EXTRA (and I am 0 single) while I have to cut a check every year for more, because I don’t have deductibles, that sucks!

      • Don’t worry TG that I am going to start rooting for jacking with the tax code. I just wince a little bit when some on the right use the hyperbole that over half of the country are getting EITC checks, medicaid, section 8 housing subsidies, and food stamps. I can only speak for myself. I do not get any of that stuff. I am not complaining. I just don’t like getting lumped in with other people based on earnings.

  2. Some people get more than 100% back with the EITC.

    And the thing that makes me the craziest about the EITC? Why do we select people with kids and say that they should get their FICA tax back, but a guy without kids gets screwed? It makes no sense.

      • Yes, EITC that exceeds all federal income taxes one pays is welfare for the working poor. Of course, most welfare spending goes to bureaucrats that administer welfare and people that earn have no income. In my mind the most “wrong” among those three categories are the funds spent on anal examiners for the feds. My column was not about the rightness or wrongness of EITC, but rather about the accuracy of popular but false claims about same. Now, THE conservative economic guru, Milton Friedman, long ago (70s) proposed doing away with most of the federal welfare bureacracy via a negative income tax that would be an expanded EITC in essence and Charles Murray wrote an excellent defense of same as a moral instrument. Of course, this assumes that we still support Reagan’s support for a federal safety net for the truly needy. I still do with major reforms but I am also open to a total return to the states depending on specifics and transition policy. The fact is that today, under present law, nowhere near 50% of workers pay no federal income tax accurately defined and to say so is to alienate the vast majority of low income workers that do not get EITC or who pay much more in FICA than they get in EITC credits.

    • Yes, “some” people get more than 100% back due to EITC, but nowhere near 50% of taxpayers, hence my objection to those that say so. Since there is nothing but IOU’s in FICA and since the taxes paid under than rubric go into the kitty with all other federal revenues, it is grossly misleading to say that most low income workers “pay no federal taxes”. It is Orwellian and insulting to hard working poor people and lower income people to use that vague rhetoric.

      • I agree with the premise of your dispatch. All the tax receipts of the Federal gov’t, regardless of their name, go into the same pot and we set ourselves up to look like liars if we try to parse the words, a la Bill Clinton, to say that *income* taxes are the only ones we talk about when FICA is a tax on income.

        If I had my way, there would be no separate tax bill for FICA vs. income and the EITC would not exist. Too bad I’m not really the Queen.

  3. Mike, I’m not sure how to respond to this. On one hand, we do need to address how economic redistribution is applied via our tax code. It’s long past time for our nation to start addressing this issue honestly. OTOH, we do need to keep in mind that this is likely to scare the wits out of those who are dependent on our welfare system for their survival. I’m not sure where the middle of the road is, so to speak, but I don’t think avoiding the issue will help us to resolve it.

    BTW, for those who think EIC is a problem, just wait until you see what the government has in store for us via public health insurance exchange subsidies.

    • Yes, I support major tax reform. In the meantime, let’s not right a sequel to Orwell’s 1984 and adopt some superiority complex based on nomenclature distinctions without a difference when speaking of those that pay federal income taxes. FICA is a federal income tax and most low income workers do not get EITC that exceeds their combined tax bill for FICA, Medicare and “regular” federal income taxes. all of which goes into the same kitty to pay all bills before we print QE’s or borrow from Red China.

  4. I do not see how continuing to use the 50% pay no income taxes will be of use to us going forward. For every pundit or broadcaster who says this, the person on their left says, that is wrong because FICA is a federal tax on payroll earnings.

    A better way forward is to concentrate on inflation, unemployment, foreclosures and the loss of our health care system. IOW socialism’s failures.

    The collectivists are rope a doping us into the mirror image of their class warfare. They want the rich to pay and they think we want the poor to pay. The problem is with using this argument as a stand alone instead of explaining it as part of a growth agenda.

    If we had real debates we would see what the candidates have to say about all this. But instead we are treated to the ravings of a senile poltroon.

  5. While I usually find myself in agreement with GC, on this topic I will demur.

    Messaging is all about who controls the language (eg. Pro-Choice/anti-abortion rights vs Pro-life/Pro-Abortion). I will not cede this ground until the Left stops caterwauling about the “rich” not paying their fair share.

    I believe that we can turn this into a ‘two-fer’ for our side – we can dispose of the myth that job creators aren’t paying their fair share whilst simultaneously pointing out that the SS emperor is wearing no clothes.

    More later (to coin a phrase from our esteemed Dispatcher 🙂

    • Of course I am with you on the Left’s attacks on “the rich”. I don’t see how cutting thru the semantics on what is deducted from lower income workers is related at all. Moreover, only AFTER I wrote this column did I google and see that many on the left have criticized claims that 50% of workers “pay no federal taxes”. I was motivated to write this column based on my own revulsion at the half truths coming out of the mouths of my hero Rush Limbaugh and Paul Ryan and other conservatives. It is not ceding ground to the left to tell the truth. I think my column makes a more nuanced argument that the left, as they never bring up the EITC. More later brother

      • Same here, my brotha from anotha mutha. Will pen more later but for know, it’s hard to push back on the ridiculous amounts of FIT that the top 5% are paying w/out mentioning that the bottom 50 pay nada.

        But bashing the bottom 50 just for giggles and chips…yeah, I’m totally in the same boat as you.

        It’s counterproductive.

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