Wednesday, June 25, 2008

Struggling to make ends meet on $300K

I've got to hand it to Republicans: the way they've managed to pull the wool over the eyes of their supporters all these years by painting themselves as "ordinary folk" staving off the pernicious cultural assaults of powerful, disconnected, liberal "elites" is quite remarkable. Why, just the other day we had Karl Rove describing Barak Obama, who was raised by a single mother who relied more than once on food stamps to make ends meet as "...the guy at the country club with the beautiful date, holding a martini and a cigarette that stands against the wall and makes snide comments about everyone who passes by." What makes the GOP's seeming ability to fool all of their supporters all the time so remarkable is that, just as you have operatives like Rove pushing the "liberal elite" shibboleth, you've got columnists like Donald Luskin writing this sort of thing in the pages of the Wall Street Journal:

...the most alarming thing about Mr. Obama's proposal is that the $250,000 threshold, above which the payroll tax would be applied, refers to household income, not individual income. So it's quite deceptive when he claims that the $250,000 threshold will "ensure that lifting the payroll tax cap does not ensnare any middle class Americans."

Suppose your household consists of you and your spouse, each earning wages of $150,000 per year. Currently, you are each subject to the payroll tax up to $102,000 of wages, so together you are taxed on $204,000. Under the Obama plan, you'd be taxed again on another $50,000 of wages.

At the current payroll tax rate of 12.4% – 6.2% from wage-earners and 6.2% from their employers – your household would be looking at a tax hike of $6,200 per year. You probably didn't consider yourself rich before, and you certainly won't after paying that tax bill. (emphasis added)

There's a scene in the film "Raising Arizona" in which Nicolas Cage's character meets a man in prison who, in recounting his family's sad story one evening, notes: "...and when there was no meat, we ate fowl and when there was no fowl, we ate crawdad and when there was no crawdad to be found, we ate sand," to which Cage replies incredulously "You ate SAND?" And the man answers matter of factly "That's right." Now, 'till this moment I've never felt a particular connection to this man's story, but perhaps I should reassess that judgment. After all, the $300,000.00 in yearly wage income that Luskin regards as a mere pittance seems like a veritable fortune to me. And if tacking on a 1.09% tax hike turns you into a bona-fide pauper, then I seem to really have missed the boat. I must be the guy who cleans out the pauper's latrine for a living.

Of course, there will be those who try to argue that Luskin's salary expectations might be a bit skewed by the fact that he's the chief investment officer of Trend Macrolytics LLC and used to be vice chairman and chief investment officer for Barklay's Global Investors. But don't let those titles fool you. Don's a Republican, which means he's a regular guy... like you and me... and not some haughty, distant, liberal elitist peering down scornfully on the rest of us from his lofty perch on Mount Perrier. Heck, Luskin's probably never even dated a movie star or paid more than $360 for a bottle of wine or owned more than one yacht at a time. And that's more than you could say for most Democrats.

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