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.