Tax-cut flap could cost you $1,000
The White House turns to social media to make its case for the payroll tax extension. For a taxpayer making $50,000 a year, it means about $40 per 2-week pay period.
What will it mean to you if the Social Security payroll tax cut is not extended?
If you're an average taxpayer, making $50,000 a year, you'll pay an extra $1,000 in Social Security tax next year. That's about $20 a week, or about $40 a pay period for those who get paid every other week.
The White House took its campaign to Twitter, Facebook and YouTube on Tuesday afternoon, asking Americans to let Congress know what $40 means to them. The administration also is collecting Americans' stories online.
President Barack Obama noted that while most members of Congress support extending the payroll tax cut, Republicans in the House have chosen to hold it hostage so they can get other concessions from Democrats and the administration. "This is not a game," Obama said in response to a GOP characterization of the payroll tax debate as "high-stakes" poker.
"Our failure to do this could have effects not just on families but on the economy as a whole," Obama said of the tax cut extension. "It’s not a game for the average family, who doesn’t have an extra 1,000 bucks to lose. It’s not a game for somebody who’s out there looking for work right now, and might lose his house if unemployment insurance doesn’t come through. It’s not a game for the millions of Americans who will take a hit when the entire economy grows more slowly because these proposals aren’t extended."
(Post continues after video.)
What does $40 mean to Americans? Here are some of the stories collected so far:
- "I can buy lunch from the cafeteria for almost a whole month for my twins, I can buy food, or pay for gas. I can save it for my daughter’s prescriptions deductibles. To some people $40 is nothing, but $40 is big money for us," writes L.A. of Hamden, Conn.
- "After everything that comes out, including my mortgage, my take-home pay is $150 every two weeks. So minus $40 would be $110. I can barely get by now. That $40 bucks is my gas for my car to get to work. Taking $40 away from my pay would, just about put me under," writes R.T. of Charleston, W.Va.
- "$40 less a paycheck means I will have to pick between my insulin and the water bill. It means never being able to see my doctor - even though I have insurance," writes B.T. of Roswell, N.M.
A number of respondents noted that $40 pays for a tank of gas, which equals transportation to work. Others mentioned needing the money for food or medical expenses.
Because Social Security tax is levied only on the first $106,800 of income, the tax cut has a greater impact on workers who make less than that amount. Because those workers are likely to spend that extra $20 a week on things such as food, gasoline and clothing, the money also goes back into the economy -- though there is some debate on how big a stimulus the tax cut provides.
"With the payroll tax cut, what is really at stake here is deciding whether or not to infuse $120 billion of disposable income into the economy in 2012," Andrew Fieldhouse, a federal budget policy analyst at the Economic Policy Institute, told ABC News. "It’s not the best way to create jobs, but it is the biggest jobs measure being considered by Congress."
The payroll tax cut expires Dec. 31, and Congress appears unlikely to act before then. Of course, it's certainly possible Congress could vote in January to extend the tax cut. The measure passed by the Senate was only a two-month extension, which means the issue would have to be revisited next year even if the House had voted to accept that extension. There's that little issue of how to pay for the tax cut still to be worked out.
More from MSN Money:
VIDEO ON MSN MONEY
Cut the $4 Billion in ANNUAL aid to Israel and the $1.7 Billion in annual aid to Egypt and throw that in the SS coffers.
It really sucks that this once great country has turned into such a joke financially. Benefits for people here ILLEGALLY that have no right to them, gov't funding of every global issue or conflict, feeding our enemies, policing the world, social security for people who have not paid into all their working lives like most of us have, over the top perks and pay for CEO's and athletes while the hard working "peons" support them, buying China's and third world goods without taxing them fairly while we build their economy and put our workers out of work and watching while our self serving government who we freakin elected schemes and squabbles and fattens their pockets while passing ignorant laws they don't have to follow and have a fool proof retirement plan. Did I miss anything?
Hundreds of years ago the greatest empire on earth, Rome, collapsed under internal corruption and passivism while integrating their empire with outsiders who didn't have the same respect, discipline and pride in their country that the earlier Romans had. I'm afraid that is where the United States is at the moment. It's just a matter of time folks unless people hold the government responsible and make them do what is best for the country. Basically that means reversing all of the above.
Sorry for the bad grammer and run on sentences b ut I hope my point was understood.
The threat that it's costing 1,000/year for a person making 50K/year.... B.S. tell the real story.
Being that it's only a 2 month proposal, that's actually only $160 for a person making 50k/yr. This is so dumb, the dems are already quoting this as a "tax increase". Load of crap, quit robbing from the SS fund, idiots.
When this went into effect last year, we didn't notice it. Our health insurance went up that amount. We didn't get any extra money in our pockets, it just balanced out not having to pay for the extra hike in health insurance.
Every time a cost of living allowance is given (haven't had one in 6 years now) health insurance, and assorted state taxes go up. All these "raises" do is pay the top corporations etc. Do we really see it?
50k a year=30k a year 20 years ago. I don't notice a difference, still have the same house, same car, just paying more for everything else.
50% make less then $33,000 dollars. So using that amount, This is how it brakes down
33k divided by 52 wk's = $634.62 The 2010 tax computation rate was .0765. Take 634.62 times that number and you get $48 55. In 2011 the congress, in order to get your vote, lowered that rate to .0565 Now, take that $634.62 times the .0565 and you get $35.86.
subtract $35.86 from the $48.55 and you get $12.69 That's the difference per week times 52 and you get $659.88 that everyone should've been paying anyway. The congress should never had played with the payroll tax computation to just get your vote and then turn it around and use it as what they would call an INCREASE IN taxes.
People, that is only $12.69 per week and if you think about what the gas prices are now versus last year, the government already got it back and now want you to vote for those guys in the Senate (Harrold role over spending Reid) that proposed this 2 month extension. What a joke. That $12.69 per week couldn't even put a double Cheeseburger from burger King for two on the table for that week. (Double cheese burger at $1.49 times 2 = $2.98 times 7= $20.86. These are factual numbers
Smoke and mirrors folks; "We're really working to 'save the economy', 'help the poor American taxpayer' and 'save Social Security'. From whom? Who actually made the decisions that got us all into this gigantic boondoggle? It wasn't me. Was it you? Who are they kidding? They throw us a bone and expect us to wag our tails and think everything is going to be OK? I'm so sick of the mismanagement and expansion of government influence in our lives that I really am willing to vote them all out- including the representatives I like.
Whether I like everything he stands for or not, I at least believe that Ron Paul says what he means and means what he says. No BS. Vote them all out, vote RP in and let's see where this goes...
Obama says he is tired of the GOP games.
I think Americans are tired of ALL their games.
VOTE THEM ALL OUT!!!!!
And while were making things fair, how about taxing capital gains as income? Don't give me that talk about how it would stifle investments, Entrepreneurs take the same financial risks but are taxed fully on what their business makes.
One more thing, I don't think that anyone should get a tax return greater than what they paid in. That's wealth redistribution and its not fair.
My 2 cents...
Why are we Americans allowing our politcians to not do their job? Especially when you look at the poverty levels in this country. We are becoming a third world country very quickly and the inability of our government to act in a responsible manner will have many more people in trouble. All those who have jobs and think they are better than those that don't are in for a rude shock They are not immune to hunger and disease and will be the target of the people stealing and killing to survive.
If you or I did what the politicians are doing, we would be fired very quickly. Wake up America!
We need to fire these self absorbed creeps and VOTE THEM ALL OUT!!!!
Why isn't that Sharpton not in jail for not paying his taxes???????
Oh That's right, he probably got bailed out by Jessy Jackson
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.