Time to say goodbye to the payroll tax cut? It's looking that way.

[Auburn85 434]

http://www.csmonitor...ooking-that-way

It now appears that all Americans with a job – no matter what their income level – will see their federal taxes rise on Jan. 1. That's because, in an effort to resolve the so-called "fiscal cliff," the Obama White House has quietly dropped its plan to extend the temporary 2 percentage point cut in payroll taxes, which are used to fund Social Security.

For someone who makes about $50,000 a year, the payroll tax will rise by about $19 a week, meaning that earner will have about $1,000 less to spend next year than in 2012. Some may make up for the lost income by eliminating that $4 latte every work day, or cutting back on the frequency of dining out at a sit-down restaurant.

“First paychecks [of the new year] will be about 2 percent smaller,” says Roberton Williams, a senior fellow at the Tax Policy Center in Washington. If someone's gross pay is $1,000 per week this year and all other taxes stay the same next year, that worker will take home $20 less a week in 2013.

That may not sound like much money, but for the economy as a whole the payroll tax cut amounted to about $112 billion in 2012 – or the equivalent of at least $300 for each person in the US.

“It’s money taken out of the economy that is not available to be spent,” says Mr. Williams.

All those cups of coffee and dinners out have added up to some extra hiring. In 2012, the payroll tax cut was expected to boost gross domestic product by 0.5 percent and 400,000 jobs, according to an August analysis by Macroeconomic Advisers, a St. Louis firm.

The payroll tax cuts date back to 2010, when President Obama proposed – and Congress agreed – to cut payroll taxes for individuals for one year, in a bid to help the country recover from the Great Recession. So, in 2011, the payroll tax went from 6.2 percent to 4.2 percent on the employee’s contribution to Social Security for earned income up to $110,000. The employer contribution of 6.2 percent remained unchanged.

Then, Congress and the president agreed to renew the payroll tax cut for 2012. Many budget analysts were surprised when Mr. Obama included it again for 2013.

“It was clearly a bargaining chip,” says Pete Davis of Davis Capital Investment Ideas, which advises Wall Street firms on Washington affairs.

“And it was time to cash it in” during the fiscal cliff bargaining.

Getting Congress to agree to continue the payroll tax cut yet again might have been problematic. Many politicians, from Rep. Nancy Pelosi (D) of California to Sen. Orin Hatch ® of Utah, were less than enthusiastic about extending it. That is in part because the money that would have come from wage earners’ pockets for Social Security was coming instead from the US Treasury’s general fund.

That is alarming to Pamela Tainter-Causey of the National Committee to Preserve Social Security & Medicare.

“We’re moving from a fund that is independent to one that is dependent on the general fund,” Ms. Tainter-Causey says of Social Security.

“There could be a time when they say we can’t afford to put the money into Social Security this year.”

Some analysts also ask whether the payroll tax cut was a stimulus that actually served to create jobs. “If it was designed to encourage hiring, they should have done it on the employers’ side,” says Pamela Villarreal, a senior fellow at the National Center for Policy Analysis, a nonpartisan think tank in Dallas.

The analysis from Macroeconomic Advisers, however, disagreed. It said that decreasing employers’ payroll taxes would go right into profits and would be an “ineffective” way to increase hiring.

Ms. Villarreal suggests that it might be too soon to consider the payroll tax cuts kaput.

“To me, nothing is set in stone until the end of the year, until the fat lady sings,” she says. But for now, extending the payroll tax cut seems to be off the table.

[autigeremt 6,970]

Bye! It was unfounded to begin with. Lol

[Auburn85 434]

I keep bringing up the payroll tax cut because last year Obama brought out those tvs with a countdown clock to raising taxes on the middle class. He doesn't seem as enthusiastic about it this go around. Will the media bring this up to Obama? I won't hold my breath.

[icanthearyou 4,468]

Maybe if we are forced to pay for the amount of government we have, we will demand less of it. Maybe it will snap some of us out of the partisan argument and into the reality of both parties ARE the big government. Maybe we will wake up and realize that NONE of these people debating our collective futures represents us. They rule us.

[Ouchyfish 67]

I honestly wish Congress salaries were based off of production.

[autigeremt 6,970]

I honestly wish Congress salaries were based off of production.

How much would they owe us? Lol

[icanthearyou 4,468]

I honestly wish Congress salaries were based off of production.

How much would they owe us? Lol

With unfunded liabilities, about 120 Trillion. And counting.........

[AURaptor 1,137]

Obama's revenue enhancements ( taxes ) and spending cuts ( reductions in extra spending, no actual CUTS ) won't even be enough to wipe out the INTEREST on the trillions of $'s we're over spending.

Every single person in D.C. is fooling themselves, and they expect us to simply nod and thank them for their hard work.

[TitanTiger 20,708]

If you wanted to keep the payroll tax cut but have it go back to the same levels of revenue it was raising before, why not just raise the ceiling a bit on what income gets taxed? Right now only about the first $105,000 of your income is subject to the tax. Why not raise that to $150,000 or so and index it to inflation?

[BamaGrad03 0]

For someone who's campaigned on protecting the middle class, this seems like a pretty heavy hit to the middle class' bottom line.

[Auburn85 434]

[AUMed 0]

For someone who's campaigned on protecting the middle class, this seems like a pretty heavy hit to the middle class' bottom line.

If Boehner can't get his party to support any fiscal cliff deal then Obama sure can't. The problem is the GOP intransigence on the subject.

What will happen is that all taxes will go up on January 1. The GOP will get blamed (rightfully) and then the fight will be the Democrats trying to cut taxes on 98% of Americans while the GOP tries to secure tax cuts for the top 2%. It isn't going to be pretty for them but it isn't a big surprise. The GOP lost the House nationwide vote by over a point but hold 54% of the seats due to the extreme gerrymandering of the GOP states.

The problem here is the GOP (they were the ones who instituted the vast majority of the spending that they are now decrying).

[autigeremt 6,970]

For someone who's campaigned on protecting the middle class, this seems like a pretty heavy hit to the middle class' bottom line.

If Boehner can't get his party to support any fiscal cliff deal then Obama sure can't. The problem is the GOP intransigence on the subject.

What will happen is that all taxes will go up on January 1. The GOP will get blamed (rightfully) and then the fight will be the Democrats trying to cut taxes on 98% of Americans while the GOP tries to secure tax cuts for the top 2%. It isn't going to be pretty for them but it isn't a big surprise. The GOP lost the House nationwide vote by over a point but hold 54% of the seats due to the extreme gerrymandering of the GOP states.

The problem here is the GOP (they were the ones who instituted the vast majority of the spending that they are now decrying).

The Democrats intentionally set the wheels in motion through the Senate by not addressing this issue when they had the majority to do so. They want this cliff and desire it. It's the best way for them to raise taxes on every American, cut defense spending, and use it as a weapon against the GOP.

[AUMed 0]

I don't think going over the cliff is such a big problem. It will, hopefully, stop all this bull**** that has been going on the last two years. I can't fathom how the GOP thinks that holding the debt ceiling hostage is a good idea. I mean... all that means is that they are willing to say "we will NOT pay our bills!"

The truth is that the cliff is, basically, what both sides want and don't want. They all get their big ticket items (defense cut/tax increase for the dems and social program cuts for the GOP) but they also get their pants pulled down on the other stuff.

This is particularly bad for the GOP because the majority of Americans (and Republicans for that matter) support the majority of the Obama proposal. It is going to be very very difficult for the GOP to attempt to get the things they could have gotten out of Plan B.

[autigeremt 6,970]

It's always the other sides fault with you, isn't it? I see it as shared failure.

[AUMed 0]

Plan B was the GOP plan which included a lot of concessions from the Democrats. The GOP wouldn't accept their own plan. The art of governance lies in compromise and the current House is incapable of compromise and it is because of the extreme elements of the GOP. So yes, in this case it is clearly a fault that lies with the GOP and their commitment to non-governance.

[autigeremt 6,970]

Plan B was the GOP plan which included a lot of concessions from the Democrats. The GOP wouldn't accept their own plan. The art of governance lies in compromise and the current House is incapable of compromise and it is because of the extreme elements of the GOP. So yes, in this case it is clearly a fault that lies with the GOP and their commitment to non-governance.

Where were the Democrats from 2006-2008 when they controlled both houses and had the majority in both Congress and the White House 2008-2010? I guess unity only exists if you are a Democrat within the Democrat Government. The rest of us are on our own.

[autigeremt 6,970]

Plan B was the GOP plan which included a lot of concessions from the Democrats. The GOP wouldn't accept their own plan. The art of governance lies in compromise and the current House is incapable of compromise and it is because of the extreme elements of the GOP. So yes, in this case it is clearly a fault that lies with the GOP and their commitment to non-governance.

It's called representative government. The people in their districts expect them to represent them in our fragile Republic....or what's left of it.

[homersapien 11,812]

Plan B was the GOP plan which included a lot of concessions from the Democrats. The GOP wouldn't accept their own plan. The art of governance lies in compromise and the current House is incapable of compromise and it is because of the extreme elements of the GOP. So yes, in this case it is clearly a fault that lies with the GOP and their commitment to non-governance.

It's called representative government. The people in their districts expect them to represent them in our fragile Republic....or what's left of it.

Like it or not, our system of government depends on compromise to function.

The current impasse is due to a relatively small number of extremists (thanks to Gerrymandering) wo are unwilling to compromise. They have become the American version of the Taliban - they may not blow themselves up, but they don't compromise. Even if they are a minority.

[DKW 86 7,726]

Dont want to debate this, but this is actually just a deferral, it is not a real "cut."

[Auburn85 434]

Plan B was the GOP plan which included a lot of concessions from the Democrats. The GOP wouldn't accept their own plan. The art of governance lies in compromise and the current House is incapable of compromise and it is because of the extreme elements of the GOP. So yes, in this case it is clearly a fault that lies with the GOP and their commitment to non-governance.

It's called representative government. The people in their districts expect them to represent them in our fragile Republic....or what's left of it.

Like it or not, our system of government depends on compromise to function.

The current impasse is due to a relatively small number of extremists (thanks to Gerrymandering) wo are unwilling to compromise. They have become the American version of the Taliban - they may not blow themselves up, but they don't compromise. Even if they are a minority.

I raise your American Taliban and give you this:

[Auburn85 434]

Plan B was the GOP plan which included a lot of concessions from the Democrats. The GOP wouldn't accept their own plan. The art of governance lies in compromise and the current House is incapable of compromise and it is because of the extreme elements of the GOP. So yes, in this case it is clearly a fault that lies with the GOP and their commitment to non-governance.

It's called representative government. The people in their districts expect them to represent them in our fragile Republic....or what's left of it.

Like it or not, our system of government depends on compromise to function.

The current impasse is due to a relatively small number of extremists (thanks to Gerrymandering) wo are unwilling to compromise. They have become the American version of the Taliban - they may not blow themselves up, but they don't compromise. Even if they are a minority.

And if we are going to be consistent and use the same logic, I blame the victims of gerrymandering on bad parenting "I would suggest that you should have a far more

responsible father. If they're truly concerned about the well-being of their children,

[Auburn85 434]

sorry for the double post of the video

[homersapien 11,812]

sorry for the double post of the video

Don't sweat the duplicate posting (which I don't watch anyway), I find your post incoherent.

[Bottomfeeder 244]

Part of the problem is republican conservatives don't believe their own platform.