Last night President Obama renewed his calls for a so-called “middle class tax” cut that would all but kill Social Security:

“Right now, our most immediate priority is stopping a tax hike on 160 million working Americans while the recovery is still fragile. People cannot afford losing $40 out of each paycheck this year. There are plenty of ways to get this done. So let’s agree right here, right now: No side issues. No drama. Pass the payroll tax cut without delay.”

And yet only two paragraphs later, he said this:

Alas, in calling for a renewed payroll tax holiday, President Obama continues to raid Social Security and imperil the retirement account that many Americans have paid into and continue to depend upon.

On the one hand, he raids the Social Security trust fund, while on the other he attacks Republicans for threatening Social Security.  Republicans ought not let him get away with such transparent chutzpah.

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In the year since the Tea Party arrived in Congress, the movement has managed to change the debate on Capitol Hill, but not the way Washington works.

The Tea Party has stopped President Barack Obama and the Democrats from bailing out profligate state governments, from passing new so-called “stimulus” spending, and from raising tax rates. It has even begun to win bipartisan support for major entitlement reform.

However, the Tea Party has failed thus far to stop the overall growth in the size and cost of government. It passed over a dozen bills that would accelerate economic growth and create new jobs, only to see those bills languish in Harry Reid’s Senate.

In both the debt ceiling and the payroll tax debates, the Tea Party saw its sensible bills rejected in favor of absurd compromises–then found itself being blamed for congressional gridlock.

The key to the Tea Party’s fortunes has been its relationship with the very establishment it dislikes. Where it has found common ground–for example, with House budget chair Paul Ryan–it has been able to promote its agenda of limited government. But when the Tea Party has clashed with Republican leaders–starting with key Senate races in 2010–Democrats have won by dividing conservatives from moderates, House from Senate. (more…)

From BusinessInsider:

Sen. Chuck Schumer (D-NY) said Senate Democrats will put forward a plan to extend the payroll tax cut into 2012 this week paid for by a surtax on those with incomes greater than $1 million.

The tax cut provides the average American family with an extra $1000 in their pocket each year — and President Barack Obama has said failing to extend the tax cut and unemployment benefits would cost the economy 1 million jobs and 0.5% off GDP.

Schumer described the revenue increase on Meet the Press as a “small surtax on incomes over $1 million,” a measure certain to draw opposition from deficit-hawk Republicans opposed to any tax increases.

Schumer added that Democrats would keep introducing the payroll tax cut if it fails this week — but indicated his party is willing to negotiate other “pay-fors” with Republicans if necessary.

Americans for Tax Reform president Grover Norquist said on the same program that he is not opposed to extending the tax cut, but he indicated he would be opposed to a new tax on millionaires to pay for it.

Read more here.

From The Hill:

Senior administration officials met with Senate Democrats for an hour and a half on Thursday to answer their complaints about President Obama’s jobs bill.

Democratic lawmakers voiced objections to several of the president’s proposals to pay for the $447 billion stimulus package, including an elimination of tax breaks for the oil-and-gas industry.

David Plouffe, a senior adviser to the president, acknowledged after a marathon meeting in the Senate’s Mansfield Room that not all Democrats are sold on the plan.

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Michael Barone in The Examiner:

Barack Obama looked and sounded angry in his speech to the joint session of Congress. He bitterly assailed one straw man after another and made reference to a grab bag of proposals which would cost something on the order of $450 billion—assuring us on the one hand that they all had been supported by Republicans as well as Democrats in the past and suggesting that somehow they are going to turn the economy around. He called for further cuts in the payroll tax (which if continued indefinitely would undermine the case of Social Security as something people have earned rather than a form of welfare) and for a further extension of unemployment insurance (perhaps justifiable on humanitarian grounds, but sure to at least marginally raise the unemployment rate over what it would otherwise be).

He called for a tax credit for hiring the long-term unemployed (unfortunately, these things can be gamed). He gave a veiled plug for his pet project of high-speed rail (a real dud) and for infrastructure spending generally (but didn’t he learn that there aren’t really any shovel-ready projects?). He called for a school modernization program (will it result in more jobs than the Seattle weatherization program that cost $22 million and produced 14 jobs?) and for funding more teacher jobs (a political payoff to the teacher unions which together with other unions gave Democrats $400 million in the 2008 campaign cycle). “We’ll set up an independent fund to attract private dollars and issue loans based on two criteria: how badly a construction project is needed and how much good it would do for the country.”

Yeah, sure. Like the screening process that produced that $535,000,000 loan guarantee to now-bankrupt Solyndra. And Congress should pass the free trade agreements with Panama, Colombia and South Korea. Except that Congress can’t, because Obama hasn’t sent them up there yet in his 961 days as president.

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From the Associated Press:

First, do no harm. Economists say the most important part of the jobs plan President Barack Obama will unveil Thursday night is the renewal of two measures already in place—a cut in Social Security taxes and emergency aid for the unemployed.

His new proposals, like spending more for transportation projects and cutting taxes for companies that hire the unemployed, probably wouldn’t add many jobs, they say. Not soon, anyway.

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From the Associated Press:

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The economy weak and the public seething, President Barack Obama is expected to propose $300 billion in tax cuts and federal spending Thursday night to get Americans working again. Republicans offered Tuesday to compromise with him on jobs—but also assailed his plans in advance of his prime-time speech.

In effect, Obama will be hitting cleanup on a shortened holiday week, with Republican White House contender Mitt Romney releasing his jobs proposals on Tuesday and front-running Texas Gov. Rick Perry hoping to join his presidential rivals Wednesday evening on a nationally televised debate stage for the first time.

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Under current law, Social Security is supposed to be an “earned benefit,” where taxes are akin to insurance premiums that finance retirement benefits for workers. And because there is a cap on retirement benefits, this means there also is a “wage-base cap” on the amount of income that is hit by the payroll tax.

For 2011, the maximum annual retirement benefit is about $28,400 and the maximum amount of income subject to the payroll tax is about $107,000.

It appears that President Obama wants to radically change this system so that it is based on a class-warfare model. During the 2008 campaign, for instance, then-Senator Obama suggested that the programs giant long-run deficit could be addressed by busting the wage-base cap and imposing the payroll tax on a larger amount of income.

For the past two years, the White House (thankfully) has not followed through on this campaign rhetoric, but that’s now changing. His Fiscal Commission, as I noted last year, suggested a big hike in the payroll tax burden. And the President reiterated his support for a class-warfare approach earlier this week, leading the Wall Street Journal to opine.

Speaking Tuesday in Annandale, Virginia, Mr. Obama came out for lifting the cap on income on which the Social Security payroll tax is applied. Currently, the employer and employee each pay 6.2% up to $106,800, a level that rises with inflation each year. …Mr. Obama didn’t hint at specifics, though he did run in 2008 on a plan to raise the “tax max” by somewhere between two to eight percentage points for the top 3% of earners. …most of the increase could be paid by the middle class or modestly affluent—i.e., those who merely make somewhat more than $106,800. A 6.2% additional hit on every extra dollar they make above that level is a huge reduction from their take-home pay. If the cap is removed entirely, it will also mean a huge increase in the marginal tax rates that affect decisions to work, invest and save. In a recent paper for the American Enterprise Institute, Andrew Biggs calculates that this and other tax increases Mr. Obama favors would bring the top marginal rate to somewhere between 57% and 68% when factoring in state taxes. Tax levels like these haven’t been seen since the 1970s.

Obama is cleverly avoiding specifics, largely because the potential tax hike could be enormous.

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There are two crises facing Social Security. First the program has a gigantic unfunded liability, largely caused by demographics. Second, the program is a very bad deal for younger workers, making them pay record amounts of tax in exchange for comparatively meager benefits. This video explains how personal accounts can solve both problems, and also notes that nations as varied as Australia, Chile, Sweden, and Hong Kong have implemented this pro-growth reform.

Social Security reform received a good bit of attention in the past two decades. President Clinton openly flirted with the idea, and President Bush explicitly endorsed the concept. But it has faded from the public square in recent years. But this may be about to change. Personal accounts are part of Congressman Paul Ryan’s Roadmap proposal, and recent polls show continued strong support for letting younger workers shift some of their payroll taxes to individual accounts.

Equally important, the American people understand that Social Security’s finances are unsustainable. They may not know specific numbers, but they know politicians have created a house of cards, which is why jokes about the system are so easily understandable.

President Obama thinks the answer is higher taxes, which is hardly a surprise. But making people pay more is hardly an attractive option, unless you’re the type of person who thinks it’s okay to give people a hamburger and charge them for a steak.

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According to the Joint Committee on Taxation, it’s not happening. The Hill reports

“Taxpayers earning less than $200,000 a year will pay roughly $3.9 billion more in taxes—in 2019 alone—due to healthcare reform, according to the Joint Committee on Taxation, Congress’s official scorekeeper.

The new law raises $15.2 billion over 10 years by limiting the medical expense deduction, a provision widely used by taxpayers who either have a serious illness or are older.

Taxpayers can currently deduct medical expenses in excess of 7.5 percent of their adjusted gross income. Starting in 2013, most taxpayers will only be able to deduct expenses greater than 10 percent of AGI. Older taxpayers are hit by this threshold increase in 2017.

Once the law is fully implemented in 2019, the JCT estimates the deduction limitation will affect 14.8 million taxpayers — 14.7 million of them will earn less than $200,000 a year. These taxpayers are single and joint filers, as well as heads of households.”

Here is more, as if this wasn’t enough. Over at the Washington Examiner Marie Grace Turner gives a list of the new taxes brought to you by “Obamacare.”

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If the goal of the President’s proposal was to drive doctors into hospital based practices or community health centers, or if it was to break the spirit of providers and bend them to the will of the government that holds the threat of criminal prosecution over their heads if they are found to be Medicare cheats, or if the goal was to dumb down the practice of medicine by ramping up the power of the HHS secretary and the evidence-based medicine posse, then the President’s proposal for health care reform was successful.

However, we as physicians are individuals. There are approximately 890,000 doctors currently practicing in the US. Those of us who want the autonomy to practice medicine the way we were trained, those of us who run a private practice who are entrepreneurs at heart, those who are tired of being pitted against our patients and other physicians (the specialist vs. primary care physician meme), and those who are just sick and tired are NOT going to take this. Those of us who can will retire or leave medicine all together. Those within the system will simply opt out.

The President’s summit on Thursday amounts to nothing more than six hours of theater. Not one physician in Congress has been invited to attend. The physicians for single payer have also not been invited. It is his chance to hear from the people on the front line, and it is obvious this bill is NOT about the health of our people. It is about raising revenue, controlling the medical industrial complex completely. How else can you explain the proposal for the government to a) take over control of the cost of insurance premiums; b) limit provider medical decisions based on cost, and c) control what is medically covered for the patient. Under the proposed health care reformed, the government will control how much an insurance company can charge, decide what is covered medically, and sanction the provider for deviating from the norm.

These are some of the proposal highlights that concerned me the most:

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Recently, retired military have received e-mail messages notifying them of a withholding tax increase. The email states:

NO ANNUAL COST OF LIVING ADJUSTMENT (COLA) WILL BE ADDED TO MILITARY RETIRED PAY IN 2010.

DUE TO RECENT LEGISLATION YOUR FEDERAL WITHHOLDING TAX HAS CHANGED.

After much investigating and several discussions with the IRS, it appears the Democrats have played a “cash-flow trick” on working Americans and are taking more out of American’s paychecks across the board–all the while touting the Making Work Pay tax credit.

The trick, when looking at the new withholding tax tables for 2010 as compared to post-stimulus 2009, buries an increase in federal withholding taxes–for all income categories–basically giving the government an interest-free loan until current year taxes are filed next year. Some would blame the increase in withholding on the Making Work Pay tax credit being spread out over 12 months as compared to 2009, which was only over 9 months, but this would be impossible as some middle class wage categories carry an increase in the withholding tax of over $200 per pay period.

Unlike the middle class wage earners, who are going to see huge amounts taken out of their paychecks, unless they increase their exemptions on their W4 form, it’s an increase that most wouldn’t even notice–$10 or $20 in some cases. Here are some of the “highlights” of the new 2010 withholding tables:

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