Thursday, May 26, 2011

Letter to WSJ answering Steve Moore Tax rate article

Chicago Thursday PM 26 May 2011

Editors, the Wall Street Journal


In The Wall Street Journal article “A 62% Top Tax Rate?” of Thursday 26 May
the Journal's own Stephen Moore clearly describes the country's present taxing/spending turmoil .

Mr Moore writes of the “employer share of all payroll taxes” that while “employers are responsible for collecting this tax, it is ultimately borne by the employee.”

The employee gets a printed statement from the employer saying “you earned and your employer
paid” but that's the closest he ever gets to actually writing a check to the feds to pay it. Since The 1943 Current Tax payment act the employers have been doing all the check writing. If the checks don't
reach the feds, the employer goes to jail, never the wage-earner.

The employer does have an out not available to the wage earner: since all employers must send in this money, there is no competitive reason to do anything other than pass on the cost to customers in higher product prices. Thus 90% of personal income taxes end up as an invisible national sales tax.

To see the significance of this you need only look at the 2011 Statistical Abstract of the United States
table 478 showing 37% of the total 2009 federal income of $2.345 trillion coming from employer bank accounts, not wage earner's.

Mr. Moore further accuses Social Security of beng “designed to operate as an insurance system, with
each individual's payment tied to the benefits paid out....” The Supreme Court has never been asked
to judge the program's constitutionality, but the 1961 Fleming vs Nestor decision determining the eligibility of a single participant needed only 85 words to clearly describe what it isn't: “The
noncontractual interest of an employee covered by the [Social Security] Act cannot be soundly
analogized to that of the holder of an annuity, whose right to benefits are based on his contractual
premium payments. To engraft upon the Social Security System a concept of 'accrued property
rights' would deprive it of the flexibility and boldness in adjustment to ever-changing conditions
which it demands and which Congress probably had in mind when it expressly reserved the right to
alter, amend or repeal any provision of the Act."

Mr. Moore closes by derisively referring to the Democrats insatiable desire to keep raising taxes on the “rich”. Can someone ask the Democrats what they plan to do when they inevitably reach the point
where no one is rich anymore? Two examples of this are the former Soviet Union and the current
North Korea.

Arnold H Nelson
5056 North Marine Drive Chicago 60640

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