Late last year President Obama and Congress conducted a very public debate over federal income tax rates. Both Democrats and Republicans argued that marginal tax rates should not be raised during this time of economic malaise. They insisted that to allow the tax rates to rise would further exacerbate financial difficulties facing Americans leading to more bankruptcies, foreclosures and job losses.

Democrats, who said they wanted to allow the tax rates of “millionaires” to go up so they could “pay their fair share,” insisted they were looking out for the working class. They used the term “millionaire” despite the fact that their proposal actually raised the tax rates of those making well below $1,000,000. In fact, they would have effectively raised the tax rates of those making $250,000 or more.

Republicans, who said they wanted to protect small businesses from increased taxation that would obstruct their ability to hire new workers, declared they were looking out for everyone, regardless of their level of income. They cited small businesses because many small business owners, whether incorporated or operating as sole proprietors, file their business’ profit or losses as part of their personal tax returns.

Whether you support the Democratic or Republican viewpoint is somewhat irrelevant. What is significant is that the public debate was, once again, not an honest one.

Democrats employed the word “millionaire” because they were looking to create a socio-economic conflict. They wanted all those whose saw themselves as the average, hard-working, never-caught-a-break but most importantly not rich voter to think the Democratic party was finally going to fight for them and stick it to those rich Wall Street, banker types. The fact that they fully intended to raise the tax rates for folks making well under a million dollars a year was, apparently, a technicality they thought was not worth sharing with the American people.

Republicans employed the term small businesses because they were looking to create a commonality between the (perceived) party of big business and the rich with everyday citizens. Despite deep pockets and significant influence over the legislative process in Washington, big business cannot cast a single vote for anyone. Despite the fact they can have their way in almost any situation in everyday life, the rich are limited to just one vote per person. Since the majority of jobs in this country are provided by small businesses, they believed by claiming to defend small businesses folks would think they were fighting to save jobs.

The great tax debate of 2010 also included a discussion of payroll taxes. A far more subtle conversation that was almost ignored by the media, the issue of payroll taxes was arguably the one that should have garnered the majority of media attention. Republicans proposed to cut the Social Security withholding tax. GOP spin doctors argued that reducing the portion of the tax paid by workers would “put more money in the pockets of hard working Americans” and create jobs.

The Democratic position was never expressed, at least not publicly.  The lack of Democratic resistance was the likely cause for such scarce media coverage of the payroll tax issue. However, the seriousness of its consequences should have sent the press scrambling to the halls of Congress demanding to know how an attack on Social Security was a good thing for the country, especially in this time of great austerity.

In the end, the President and congressional Democrats gave in and enacted the Republican position, keeping all federal marginal income tax rates at the current level and reducing the Social Security withholding tax paid by workers by two percent (2%). However, the story does not end there, which is why it does not matter which side of the debate you supported.

In terms of a worker’s take-home pay, the entire congressional debate over marginal tax rates was nothing but proverbial smoke and mirrors. While our attention was focused on tax rates, the government that claimed it was fighting for us so that we would have a little more in our paychecks from week to week was actually recalculating the tax tables that determine just how much is actually withheld from our checks regardless of which rate you are taxed.

Here is exactly how they helped the average working- and middle-class family— if you were married and your taxable income was $24,500 last year, the federal government took $89.60 a month. Given the same scenario, your taxable income this year will be $24,900 and Washington will be taking $141.70 every single month. That is why the Social Security withholding tax reduction was so important. By reducing that to compensate for the bait and switch Washington pulled with regard to income taxes, all but the most frugal penny-pinchers would not notice the slight change in take home pay.

However, what politicians and bureaucrats sacrificed to keep the masses preoccupied with irrelevant debate conducted on the House and Senate floors and played out in our national media was, as usual, our future and the future of our grandchildren—this time in the form of Social Security solvency.  Make no mistake about it, the future of this country’s Social Security program is now officially under attack.

The payroll tax reduction, contrary to politician and media claims, will do absolutely nothing to create jobs. It was never intended to create jobs. Any discussion of job creation was totally dishonest. There has never been, nor will there be, an employer who will create a new job because a worker pays less in taxes. While the net effect to Social Security would be the same, if the payroll tax reduction had gone to the employer, then perhaps you have a legitimate argument for job creation. However that was never a consideration. So much for honest debate.