Barack Obama already bragging about tax increases
The problem with increased taxes is that it discourages people from making money. If you're in a tax bracket that just went up a lot, why would you work harder or invest money to expand a business? If you're successful, a bigger chunk goes to the government. If you're not successful, bye-bye investment.
What kind of increase are we talking about? Obama's bright idea is to raise Social Security taxes on the wealthy. After all, the wealthy already pay a very large proportion of the total tax burden, so let's stick them with more taxes! Currently, Social Security taxes are 6.2% on wages up to $102,000. This amount is paid by the employee, and the same amount is paid by the employer, for total Social Security taxes of 12.4%. Social Security isn't paid on wages over $102,000. Obama says that those making $250,000 or more shouldn't stop paying Social Security, and should pay it on all their wages.This is projected to raise $600 billion over 10 years. And it sounds fun to penalize the rich even more, but our tax laws are grossly unfair. Today, the top tax rate for the rich is at 37.9% of income when you figure in all the federal taxes on income. This would go up to 50.3% of income under Obama's plan. That's just ridiculous, and not fair. I don't care how much "the rich" are making. It's simply not fair for the government to forcibly take away that much of their money.
Increased taxes hurt our economy. Politicians shouldn't be looking for ways to increase taxes. They should be looking for ways to decrease spending and decrease taxes, putting more money in the pockets of taxpayers so they can choose how to spend it.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.