Airstud
Topic Author
Posts: 3434
Joined: Wed Nov 29, 2000 11:57 am

Q About The Payroll Tax "holiday"

Sat Sep 10, 2011 7:08 pm

As I am to understand it, "payroll tax" is a synonym for what I've always known as FICA. That is, an amount equal to 12.4% of each person's income must be contributed to Social Security, and an amount equal to 2.9% goes to Medicare. If you are self-employed, you're on the hook for the whole 15.3%; whereas if you have an employer, they have to cover half of it: 6.2% comes out of your paycheck and into Social Security; 1.45% out of your check into Medimacare, and the employer coughs up the rest.

For awhile now, we employed folk have had some "relief" from this - I'm not sure of the exact amount, but apparently the dings to our paychecks have been less than 6.2%. Currently there is controversy about extending this "tax holiday;" Obama wants it to go on and the Republicans think it shouldn't.

My first question: Is Social Security just eating this, or is the liability just being shifted in the employees' favor? That is, if my SS contribution has gone down from 6.2% to, say, 4.2%, is my employer ponying up that 2% difference? I've googled this but can't find answers. It seems to me that either the employers are picking it up, or Social Security now has the one thing it desparately needs: lessened revenues.  

If it's the first thing, and the employers are on the hook, then that's also a bad thing: The cumulative cost of that is surely stultifying job creation. My employer has more than 250,000 employees; 2% doesn't sound like a lot, but when you multiply it by 250,000 that's a lot of money being sucked out of a company's coffers, money which could otherwise be used for reinvestment & job creation. Those of us who are lucky to have steady paychecks these days don't need a 2% bonus; what's needed is paychecks for folks who ain't got them.
Pancakes are delicious.
 
User avatar
LAXintl
Posts: 21662
Joined: Wed May 24, 2000 12:12 pm

RE: Q About The Payroll Tax "holiday"

Sat Sep 10, 2011 7:29 pm

Yes SS has been eating the lost income, only setting us up even larger future shortfall.

Since January 2011, the employee portion has been reduced 2% while employers still have paid the full 6.2%.

Estimated lost income to the SS fund in 2011 was projected at $112Bil result of the 2% roll back.

Obama's proposal to raise the holiday to 3.1 percent in 2012 is estimated to cost the fund another $175Bil.
From the desert to the sea, to all of Southern California
 
Okie
Posts: 3735
Joined: Wed Jul 16, 2003 11:30 am

RE: Q About The Payroll Tax "holiday"

Sat Sep 10, 2011 7:58 pm

Quoting Airstud (Thread starter):
Obama wants it to go on and the Republicans think it shouldn't.


Please show me the legislation to which you are referring, oh there is none, only a verbal comment in a campaign speech.

Quoting Airstud (Thread starter):
My first question: Is Social Security just eating this, or is the liability just being shifted in the employees' favor? That is, if my SS contribution has gone down from 6.2% to, say, 4.2%, is my employer ponying up that 2% difference


Somebody else, it is kicking the can down the road, decreasing contributions to be back filled by someone else down the road.

Part of the campaign speech indicates that there could be some relief for the employer as well but again only the White house knows there is nothing other than the teleprompter to determine.

From what sources AP, CNN, etc have determined that the money will have to be made up by the "super committee" for the $450B jobs vapor bill, so instead of having to deal with $1.5T now they have to deal with nearly $2T. That only leave 3 sources for the committee to fund $2T, Social Security, Medicare, and Defence.
It is kind of ironic all the people at the campaign speeches clapping, cheering, and kumbaya's on how excited they are over giving up there SS and Medicare.

Again lets see the legislation first then determine if it is worth the costs for a 1 year program. This a political bill which obviously is riddled with bad (you fill in the word). Otherwise, it would have already been presented. If you listened to the speech then you would know that it has a little bit for the teachers unions, a little for the police unions, a little for firefighers union, a little for schools, a little for roads, a little for infrastruce, a little for homeowners that are Tango Uniform, a little for middle income, a little more for unemployment, just a lot of kumbaya from "Central Planning". Why the heck do you think it took over 30 minutes, there is a little something for everybody. I just can not see exactly where is the job creation.

Okie

Who is online

Users browsing this forum: BobPatterson, Freakysh, LittleFokker, photopilot, TheF15Ace and 2 guests

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos