I’ve blogged how taxes sold as only affecting “the rich” eventually make its way to the lower/middle class, and I’m not just talking about through higher prices. I mean actual cash sent in to the government. A perfect example is the tax on social security benefits. Yes, the benefits you’ve earned through paying social security taxes your whole life are taxed yet again when you receive them. Of course, this only applies if you’re a member of “the rich,” at least that is how it was slipped past voters into law. So, what is considered rich?–if you have combined income (i.e. social security, employment, etc.) that exceeds $34,000 for singles, or $44,000 for a married couple. The actual calculation is purposely so complex that the average person can’t easily picture the taxable amount, but the point is, would you consider a married couple with $44,000 income rich?
Believe it or not, a threshold that a senior greeter at Walmart can now easily beat was once considered fairly high, but government used one of its oldest tricks in the book, it didn’t index the threshold for inflation. As the U.S. Dollar has plummetted in value, the lower/middle class now is subect to the taxes. It’s difficult to comprehend, but if the inflation rate of the last two years continues, in only 12-15 years, a McDonald’s worker will be earning $100,000 but will be unable to buy anything more than he/she already does today. Remember that the next time a politician purposes some new “tax on the rich” buried in a 2000-page bill, using a formula involving dozens of numbers and calculations.