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Tim Ryan: Tax increase hypocritical



Published: Tue, August 23, 2011 @ 12:03 a.m.

By Karl Henkel

khenkel@vindy.com

YOUNGSTOWN

Tim Ryan says it’s a bit hypocritical for his Republican counterparts to increase taxes on middle class families.

But one of the initial Congressional debates that will happen in September will focus on the payroll tax, which this year was slashed 2 percent and has saved workers anywhere from a few hundred to a couple of thousand dollars.

Republicans want to restore the payroll tax to its pre-2010 levels, something Ryan and his fellow Democrats think could be detrimental to the economic recovery.

“I think it shows where they stand,” said Ryan, who toured the Fireline TCON, Inc. facility in Youngstown on Monday. “You see some of our friends falling all over themselves to cut taxes for millionaires and then turn around on a $1,000 tax cut for the middle class and call it sugar-high economics.”

Workers and employers normally contribute 6.2 percent of their wages — up to the first $106,800 earned — for a 12.4 percent total.

But the payroll tax cuts, approved by Congress at President Barack Obama’s request last December, reduced the workers’ portion to 4.2 percent for one year. For a person making $50,000 annually, that amounts to a $1,000 tax break.

Obama wants Congress to extend the tax cuts for another year; if that doesn’t happen, the rate returns to 6.2 percent starting Jan. 1.

There are a couple of political factors that could sway Republicans to extend the tax break. The most notable is the Taxpayer Protection Pledge crafted by Grover Norquist, president of Americans for Tax Reform and signed by many GOP leaders, who used it as a reason not to raise taxes on the richest Americans during the deficit and debt-ceiling debates last month.

The second is the recent market volatility. If Americans have smaller paychecks, they’ll be less likely to spend.

Those who rely on programs such as Social Security’s disability program also may find themselves in a precarious situation. Reports say the financially strapped Social Security disability program badly needs reform, because by 2017, there won’t be enough money to pay full benefits (only about 75 percent) to the 13.6 million who depend on them.

There are a couple of solutions, and none are popular.

Congress could reapportion funds from the retirement program — as it did in 1994 — but many consider that a “rob Peter to pay Paul” scenario; funding for Social Security could be compromised within the next three decades.

Congress also could put tougher restrictions on who receives disability benefits. Currently, a person needs to have worked for 40 quarters and must meet a strict definition of disability, though there are some exceptions.

But Norman Wernet, state director of the Alliance for Retired Americans in Ohio, said the restrictions are tough enough.

It’s the second time in the last two months that Social Security’s survival has thrust into the national debate. During the deficit and debt-ceiling debates, Obama said he couldn’t guarantee Social Security checks if legislative leaders could not reach an agreement.

The constant vacillating nature of politicians has Wernet and some of the more than 230,000 retirees in Ohio he represents deeply concerned.

“We understand that politicians can pull the plug,” said Wernet. “What’s wrong with this system is that rather than dealing with the practicality of the income for retirees and those on disability, we are subjecting those people to the political winds of partisan bickering.”


Comments

1author50(1121 comments)posted 2 years, 11 months ago

$1,000.00 over 52 weeks =$19.23 for the worker. Wow taxing Timmy I'll be able to afford one loaf of bread if you and the President keep telling Big Ben at the Fed and Little Tim at Treasury to print more money!

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2Photoman(993 comments)posted 2 years, 11 months ago

I didn't notice Timmy volunteering to reduce his staff nor has any other of the D.C. legislators. How about removing many of the agencies which have overlapping, duplicitious goals? How about removing all of those czars and their staffs? We need to stop this crazy expansion of an already massive central government, get them out of our lives and let the people rule. Tim lives by the old two party standard and that standard has failed us.

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3espnlooop(23 comments)posted 2 years, 11 months ago

Typical Tim can only do and say what Nancy Pelosi says he can.

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4misterlee(118 comments)posted 2 years, 11 months ago

Author50: I'm not sure what kind of bread you eat but $20 could buy 10 loaves of Schwebel's. $20 a week is a lot of money to many working class families. And that's money that will be spent rather than put away like the wealthy do with their tax breaks. We really need to require economics courses in high schools, because most of this country doesn't understand how an economy works past Milton Friedman "I got mine" bullcrap.

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5author50(1121 comments)posted 2 years, 11 months ago

@Misterlee

Do you know what inflation is? If you don't you will be in big trouble when Taxing Timmie's party continues to print money and the dollar bubble bursts!

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6ront(119 comments)posted 2 years, 11 months ago

i find it interesting that instead of addressing what ryan has to say on the hypocracy of some wanting to raise taxes on workers, you want to attack the messenger.

while i agree the democrats have done some dumb things, the message is valid. doesn't anyone think that raising taxes on one segment, while ranting about raising taxes on another secment is hypocricitcal?

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7palbubba(664 comments)posted 2 years, 11 months ago

It is the same old tired arguement. The Democrats cry "they just want tax breaks for the rich" the Republicans cry "they just want to increase taxes and spend, spend, spend". Any one with common sense can see the solution and a perfect compromise. Set the rate at 6% and take off the earnings cap. Problem solved, of course lap dog Timmy has no solutions, only political speeches. Those of you out there that vote for him are part of the problem, not the solution. I recently emailed him this question. Why is it that those of us on Social Security deserve no raise for two years while some raises in the current administration have been as high as 86%? Guess what, as usual no answer or solution, only a political speech. Timmy and his staff is government waste at it's finest.

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8Boar7734(66 comments)posted 2 years, 11 months ago

Sorry congressman can not agree. The reduction of FICA, which was intended to fund Social Security now reallotted to the general fund, is not ethical although legal. During the Lyndon Johnson administration, the federal government divested the Social Security Trust Fund to pay for general fund issues. This is exactly why Social Security needs to go back to intended funding. If those under the $106,000 ceiling need a stimulus do so in tax credits to those gainfully employeed and are legal citizens. Reallocating SS monies is why SS in is trouble and keeping this tax reduction makes the situation far worse.

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9DisabilityGuide(1 comment)posted 2 years, 11 months ago

I think it's important to realize at this stage that the problems with Social Security, particularly its SSDI and SSI disability programs, are now greater than just the fact that almost the entirety of the Social Security fund has been borrowed to supplement general tax revenues. As of recently, it has been determined that the money being paid in through FICA tax contributions is actually less than the total amount of benefit payments, which is the real root of the widespread media panic about the programs' insolvency.

Thanks for this article,

Doug
Social Security Disability Help
www.socialsecurity-disability.org

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10Boar7734(66 comments)posted 2 years, 11 months ago

DisabilityGuide thanks for input and confirmation that the Social Security Trust Funds have "almost the entirety" been borrowed for general tax revenue. Whilst the collection of FICA is down due to recession employment vs increased applicant payout it is interesting to note how much more would be in the fund had this allocation for general funds not been used since the 60"s. This is not media panic as you put it but a reality that our goverment leadership needs to make changes back to basic accountability.

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11cambridge(2965 comments)posted 2 years, 11 months ago

The no tax increase pledge the teabagger/republicans take only applies to taxes on the ultra rich or closing loop holes and tax credits for record profit corporations. They have no problem raising taxes on the middle class.

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12AnotherAverageCitizen(1174 comments)posted 2 years, 11 months ago

Ryan is trying to keep SS taxes low for the average middle class worker. What is wrong with that? I would guess most people on this board falls in that catagory. Maybe a select 1 or2 make over $500,000. So Ryan is trying to keep more money in your paycheck, isn't that what teabaggers are all about.

I would say keep SS at 4.2% and increase the limit to $150,000 or $200,000. And id that amout effects any one on this board, good for you for making such a nice check. If you make under $106,000 the higher cap will not even effect you.

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13cambridge(2965 comments)posted 2 years, 11 months ago

UnionshateAmerica/USEless1/ProMerkin/Dorothy.....You're back!

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14stewie(108 comments)posted 2 years, 11 months ago

Yeah, it's only considered a tax increase when it's for the rich ! This bunch of monkeys have got to go in the next election! I do agree that the restrictions need to be tweaked a little, like the ones that can't work because of bad knees or back, high bld pressure mainly because they are 200 lbs. over weight and need a scooter to get around walmart with.

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15Freeatlast(1991 comments)posted 2 years, 11 months ago

Cambridge , I thank you left out PRO

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16taxpayer1001(274 comments)posted 2 years, 11 months ago

Cambridge, I know, like nobody could pick up on that statement? lol All I could think of was oh god, here we go again!

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17TylerDurden(367 comments)posted 2 years, 11 months ago

Wait until the health care bill goes into full effect in 2014. Then you'll see what happens to the payroll tax.

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18crimelander(122 comments)posted 2 years, 11 months ago

Anyone trying to raise taxes on citizens in this economy deserves to be strung up in the city square.

Now if we want to talk about raising taxes, let's talk about the mega corporations holding $2 trillion KNOWN offshore in money laundering havens.

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