Pelosi Plan Tax Robbery: Yes, They Screwed Us Again
How's that hope and change working out for you?
All of those twentysomethings who voted for Barack Obama last year are about to experience the change they haven't been waiting for: the return of income tax bracket creep. Buried in Nancy Pelosi's health-care bill is a provision that will partially repeal tax indexing for inflation, meaning that as their earnings rise over a lifetime these youngsters can look forward to paying higher rates even if their income gains aren't real.
In order to raise enough money to make their plan look like it won't add to the deficit, House Democrats have deliberately not indexed two main tax features of their plan: the $500,000 threshold for the 5.4-percentage-point income tax surcharge; and the payroll level at which small businesses must pay a new 8% tax penalty for not offering health insurance.
This is a sneaky way for politicians to pry more money out of workers every year without having to legislate tax increases. The negative effects of failing to index compound over time, yielding a revenue windfall for government as the years go on. The House tax surcharge is estimated to raise $460.5 billion over 10 years, but only $30.9 billion in 2011, rising to $68.4 billion in 2019, according to the Joint Tax Committee.
Don't worry, Zimbabwe Ben will likely implode the dollar before we have to worry about the impact of all that. So even though you'll have a $500,000,000,000 tax bill, it won't really matter since $500,000,000,000 will be barely enough to pay rent.
Keep that printing press warm, ZB, and no printing funny money up to 30 minutes after a meal or your crank hand might get a cramp, ok dear?