Skip to comments.Why The Newly Reinstated Payroll Taxes Won't Drag Down The Economy
Posted on 01/11/2013 9:08:10 AM PST by blam
Why The Newly Reinstated Payroll Taxes Won't Drag Down The Economy
January 11, 2013
If you've already received your first paycheck of the year, then you've probably noticed that it was a teeny bit smaller than expected.
That's because when the temporary cut in payroll taxes expired at the end of last year, policymakers decided to let them stay that way as a part of the fiscal cliff tax deal, also known as "American Taxpayer Relief Act of 2012."
Now that these payroll taxes are back, the US government can expect to collect revenue equivalent to about 0.66% of GDP, according to a report by UBS' global macro team. That's a reduction of around $115 billion in the disposable incomes of American households.
So Americans are going to end up spending a little less than they would have, right?
Not really says UBS. Turns out, the payroll tax cut didn't really do much to increase spending in the first place.
"The negative consumption impact from the Social Security payroll tax rise should be far less than the estimated $115 billion hike in such taxes this year. That is because the temporary two percentage point Social Security tax rate cut in 2011-2012 was not a big consumption booster."
This keeps in line what's happened in the pastlike in the 1960's, when the US government enacted a temporary income tax surcharge, spending only reduced by 35 cents on the dollar of the extra revenue.
The tax deal also enacts heavier taxes on higher income households, most significantly effecting those making $500,000 a year or more. But this will probably result in a drop in savings, not so much a reduction in spending, said the report.
(Excerpt) Read more at businessinsider.com ...
The first sentence gives away it is a propaganda piece.
This is why people hate the propaganda machine known as the corrupt MSM.
My ass. $200 a month.
“...a teeny bit smaller...”
Spoken like a true limo-liberal who has never had to budget their own funds.
Would she turn down a 2% raise, because its ‘teeny’.
Can we call 2011’s 1.7% GDP growth ‘teeny’ now?
Why Removal of Your Right Pinkie Won’t Affect Your Manual Dexterity
January 11, 2013
You’ve already noticed that your right pinkie was amputated this past week. So you’re going to have a little less functionality of your right hand than previous, right? Not really, says Dr. Herbert Gross of Harvard University. Turns out, according to Dr. Gross, your right pinkie really has no defined purpose and is expendable. In fact, you’ll soon realize how you never needed it and all activities of your daily life will proceed forward without hindrance. In fact, Dr. Gross’s recent research shows that people having only 4 fingers on their right hand demonstrate increased manual dexterity and higher levels of income.
It’s interesting how this was touted as being the savior to the economy when it was proposed and “no big deal” when rescinded.
It really doesnt matter what the cause but now Republicans need the economy to appear to tank, because their #1 talking point for years has been that the rich’=’job creators’ and ‘increasing taxes on the rich’= ‘unemployment’.
So the worst part of the taxes going up could be a side effect, if the economy appears to strengthen (for whatever reason) and Dems are believed more than Rs for another half decade.
apparently these bitter clingers didn’t get her memo:
Obama voters whining about their paychecks on Twitter:
8 posted on Friday, January 11, 2013 10:42:35 AM by jimbo123
It is NOT 2%. It IS 32%.
My ass. $200 a month.
That's awesome. Your wages must be $10,000 a month. Congratulations. That must be really cool toward the end of November or first of December when you hit the annual ceiling for SS withholding and it looks like you got about a 4% to 5% raise for those last few paychecks of the year.
No, the social security payroll tax is not 32%. But the prior reduction of the social security payroll tax rate was 2%, and that 2% reduction has expired reverting the social security tax rate back up to its prior level - roughly 6%.
If you've already received your first paycheck of the year, then you've probably noticed that it was a teeny, tiny, miniscule itsy-bitsy insignificantly bit smaller than expected. in fact, you probably didn't notice. In fact, if you did notice, you are probably one of those evil Republicans, you know the sort -- the ones that like to deny women health care and swap Tic-Tacs for our birth control pills! You know, the ones who want nuclear-tippped supersonic guided-missile bullets in 1000000 round magazines in spraying machine guns that are strapped to infants foreheads!!!! God Republicans are evil!!!1!1!1 We should start killing conservatives!!!1!!!!1!1!!1!!!!1
I want to say any money not in the feds’ hands is money better spent. But they would’ve spent it anyway. Then again, this hike will let them spend even more, so it still works out to be worse.
I’ll still go to restaurants but my tips will be less
2% of my salary is supposed to be a teeny bit? Respectfully, is Lisa retarded or just incapble of operating a calculator?
In my case the sum is a chunk of cash almost equal to my monthly mortgage. Said differently, Barry is making me pay 12 months of mortgage on 11 months of pay.
The 2% I will not be spending this year is allegedly more valuable for the Marxist Regime to put to better use? I think not.
Raising a tax from 4.2% of pay to 6.2% of pay is an increase of 32%. Two percentage points is not nearly the same thing as a percentage. With math skills like this it is no wonder we can’t balance a budget.
This is the Obama regime’s “business” propaganda rag. (((YAWN)))
I don’t get a paycheck. So haven’t seen it yet.
Who is John Galt?
That’s a keeper BlueState!
Baloney! They are dragging me down. I issued paychecks today for our tiny company and immediately had an employee in my face complaining that her check was $30 less than she expected. “That’s ObamaCare,” I replied. If you’d been watching the news you’d know that this was happeneing. Of course I got NO pay check, and neither did my husband. That is how we’ve kept the doors open this past year — taking NO PAY and just paying ourselves out of money that we’ve loaned the company in the past.
But the real shock was what Obama’s 99 weeks of unemployment has done to us. My payroll expenses are up $1000 every 2 weeks. This is because I still have people collecting unemployment who left months ago and are just collecting their bi-weekly check from the state, and it has unbalanced my ratio of workers:unemployed.
I think you need to check your math,
2% raise on a 4.2% base is 47.6% increase.
To all employees and affiliates of *** ****** ******, Inc.
I have had several people come to me and question why 'my paycheck is short'!
I was a little surprised at the question because I thought everyone knew that this was coming!
I am sorry to report that each one of you will notice today that you pay check is LESS!
The current administration has increased your personal taxes and it begins with this first paycheck of 2013 and will continue throughout the year!
If you didnt think it was really coming, ..NOW YOU WILL . because the Tax the Rich policies includes YOU!
The last 4 years of the white house sidestepping politics has reached your door step!
Up to now they have told you to pay no attention to the man behind the curtain everything will be SO MUCH BETTER. Well, here it is, are you feeling better?
To make matters worse, you can expect this to continue year after year with the outrageous spending of our government.
Many of us up to now were not directly affected.
We are fortunate to live in a prosperous city and state.
We have been self-sufficient and paid our own way.
But it is getting so out of control and you need to recognize that it is now affecting each one of you financially ..and you can expect it to continue!
Like being responsible for your own personal health, it is YOUR responsibility to demand accountability of our politicians and for you to make prudent political decisions in the future.
Choose Wisely as the future is here!
Who Is John Galt?
4.2 plus 2% = 4.2857142
4.2 plus 32% = 6.1764705
I think you need to check YOUR math.
So I guess then the American people just wasted the tax cut on frivolous things like savings and paying down debt. You were supposed to spend it on Brawndo because it's got electrolytes.