Why Obama’s tax increases will hit more than just “the rich”

In the letter section of Jerry Pournelle’s blog, somebody named Doug explains:

Obama’s Tax increase – 

Hi Jerry,

There’s a dirty little secret to Obama’s tax plan (one that McCain tries to make, but not very well). While it’s true that income tax won’t go up if you make less than $250K, he doesn’t consider Social Security or Medicare to be ‘taxes’. He plans to eliminate the cap on Social Security Tax. That means that everyone who makes more than $102,000 (in 2008) will see a 7.65% tax increase on every dollar above that limit. Plus businesses will also see their ‘share’ of the tax rise as well. That impacts far more people than the $250K benchmark he talks about.

If you make $125,000 a year, your income taxes will increase $1759.50. Your employer will also have to pay the same additional amount in taxes (which will be passed on as an increase in the price of their goods). I don’t know about you, but that’s real money to me – and the lower threshold blows a hole in Obama’s argument that most small businesses don’t make $250K. They sure as heck make $100K.

Your benefits won’t increase, just your tax. Soak the rich, redistribute wealth, etc, etc.

And that doesn’t even address the Medicare tax, which must increase to pay for his healthcare plans. But again, that’s not a tax. He’s very good at dancing on the edge of an outright lie.

Regards,

Doug

[Jerry Pournelle responds:] The only way I know of to give a tax cut to those who at the moment pay no income taxes would be to send them a check; and nothing I have seen from Obama denies that this is his intention, while some of his followers have told meetings that is is exactly what will happen. I don’t have time to follow this up.

The Obama scheme is to soak the rich. California has pretty well showed that this is a great way to drive the rich out of the state.