Politics: July 2008 Archives

Reading the inestimable Five Thirty-Eight today, I saw this Ad.

The ad leads on to a dull warning that Barack Obama plans to "lift the cap on social security" and that this will be the "biggest tax increase in history", and that it isn't necessary because the Social Security "crisis" is fake.

So, of course, it's deceptive.

First, Obama hasn't stated exactly what his plan is, and has repeatedly talked about leaving a "hole" from 97,500 to 200,000, to avoid hitting people who make middle to upper-middle class incomes in high cost of living areas.

Second, while Social Security is not currently in "crisis", there is a problem with it. It will be insolvent eventually, and worse, we currently owe the Social Security Trust Fund on the order of $5 trillion. Yes, that's $5,000,000,000,000. When it comes time - and this won't be very long, as boomer get nice and retired - to pay out that money, where will we get it? We either have to collect it in taxes, cut spending and services, or borrow it from someone. Right now, the Social Security fund has purchased US Treasury notes (bonds) with the trillions of dollars in surplus it has - surplus that will be needed for Social Security to survive the boomers. Yes, SS is solid until something like 2047 or later with all that money - but do we really want to try to sell another $5 trillion in bonds to foreign governments when the dollar is colossally weak? No.

Third, and this is really the point of the post: Who is this ad supposed to sway?

It's basically deception by omission, because it simply fails to mention who will be affected by the mentioned tax increase. The current cap on Social Security is $102,000. The 2006 census indicates that 5.63% of people earned $100,000+ per year. Therefore such an increase will affect less than 5.63%. And many of them probably to a small degree. It may be the "biggest tax increase in [insert time period here, sparing no hyperbole]", but there's still a 94.27%+ chance that it won't affect you.

Now, the real number is probably considerably lower, because some amount of those 5.63% are earning some share of their money through dividends, capital gains, and other things which are not subject to FICA. Putting an ad on a political site to warn the 5.63% of high income earners about Obama is silly, of course. Those who even remotely care, know. No, the problem here is the uninformed among the other 94% who only take away this: "Obama will raise my taxes!", without knowing it is patently false.

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This page is a archive of entries in the Politics category from July 2008.

Politics: September 2007 is the previous archive.

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