Ron Paul on taxation?

[Copernicus]

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There is no surplus. Payroll taxes are no different than other taxes; it all goes to the same place: building aircraft carriers and giving money to super old people.

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There is a huge difference between payroll taxes and social security taxes.
Payroll taxes are progressive, social security taxes are not.
Payroll taxes are taken from all of your wages, social security taxes apply to only your first 92k. So, people making 1 million a year, pay social security taxes on the first 10% of their earned income, while middle class workers pay social security taxes on 100% of their earned income.

Because of this inpropriety, and the fact that the social security surplus is a huge part of the total taxes, the middle income workers are being drained of their spendable income, as compared to the rich, and, it's the rich that benefit the most from a robust economy and the defense of this country, as their investments continue to double.

If the social security surplus wasn't used to offset the deficit, Bush would not have been able to give the rich and the oil companies those huge tax cuts.

Meanwhile, the riches 1%, earn 20% of all income in a year, while the bottom 50% earn 12%.

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How many time are the same GDF lies going to be repeated in this forum?

SOCIAL SECURITY SYSTEM IS PROGRESSIVE DESPITE THE CAP ON SS TAXES. THE BENEFIT FORMULA IS FRONT WEIGHTED FOR LOWER INCOMES.

THE CURRENT SURPLUS DOESNT PAY ANY DEFICIT. THE BONDS THE SSA BUYS ARE A DEBT OF THE GOVERNMENT LIKE ANY OTHER BOND. IT BECOMES A LIABILITY TO THE GOVERNMENT.

IF YOU TAKE OUT A CAR LOAN FOR A $30,000 CAR FROM GMAC, YOU HAVE YOU HAVE A DEBT FOR $30,000 AND YOU HAVE A $30,000 CAR. YOUR NET WORTH IS UNCHANGED.

IF YOU BORROW $30,000 FROM YOUR IRA AND BUY A $30,000 CAR YOU HAVE $30,000 LESS IN YOUR IRA AND A $30,000 CAR. YOUR NET WORTH IS UNCHANGED. THIS IS EXACTLY WHAT THE GOVERNMENT DOES WHEN THE SSA BUYS BONDS.

What happens in the two scenarios when you pay interest? In one GMAC gets your interest payment...its out of your pocket forever. When you pay back your IRA you get the interest...you aren't really paying any interest at all on the loan! So why would you ever borrow from a third party?
Only one reason...if you can earn more money on the $30,000 invested in your IRA than you are paying in interest to GMAC.

How can the government invest the SS surplus to earn more than it is paying out in interest? Read some of the threads here about the Fed "artifically lowering interest rates" and the effects that has on allocation of funds to "business that wouldnt be viable at higher interest rates". Now translate that to government investing DIRECTLY in the stock market. Who decides what stocks to buy? Imagine the conspiracy theories about that. OK, invest in indexed funds. What mutual fund do you pick to earn the management fees? Imagine the conspiracy theories about that. The stock market goes down and the surplus is lost. Payroll taxes have to be raised to cover the losses. Imagine the conspiracy theories about that. Payroll tax rates are set to fund the system, including assumptions about future earnings of the surplus. If stock market earnings rates are used...rates that include a risk premium...tax rates would be lowered. But the risk premium is an insurance policy...it isnt "free money", so you are really just shifting the reduction in SS taxes to a future generation of taxpayers.

The government cant do anything but "invest in itself" without creating enormous allocation and inter-generational problems.

Im sick of people posting about things they dont have the first GD clue about. And most of them RP supporters...coincidence? I think not.

The misguided and ill-informed following the ICP.

If you really care about the issues, and not the rhetoric,

here is the problem with Governments investing in the stock market

Its even worse if youre talking about the SS system because it impacts nearly every worker, and the size differential in investments.