Posted on 12/08/2010 6:10:28 AM PST by WOBBLY BOB
WASHINGTON — The tax deal struck by President Barack Obama and congressional Republicans essentially gives Americans a pay raise — pumping money into the economy almost immediately, probably creating hundreds of thousands of jobs over the next two years and raising economic growth, economists say.
But it also will dramatically raise the federal deficit.
The compromise already has economists raising their forecasts for growth next year, mainly because it includes a surprising one-year cut in Social Security taxes. The amount of that cut — 2 percent of pay for most American workers — instantly becomes more take-home money. Critics complain that the deal would further swell the $1.3 trillion federal budget deficit.
Analysts at BNP Paribas estimate the cost of the package at $1 trillion over two years. That would increase the federal deficit in the 2012 budget year from 6.9 percent of the nation's gross domestic product to what BNP calls a "much scarier" 9.8 percent.
(Excerpt) Read more at twincities.com ...
“pumps more money that doesn’t exist into the economy, either in debt for your grandkids or devaluing the currency in the process”
Won’t the 2% reduction in Social Security tax now be subjected to state and federal income taxes? IE: if I make $40,000 annually, there would be an additional $800 in income that would be taxed by the federal and state governments.
Essentially, I don’t gain a net $800 , but a smaller amount due to it now having state and federal income taxes applied to it. Yes?
Classic F-ed up liberal mindset. By not taking more of our money, the gov. is “giving” it to us. Only somebody that thinks all wealth belong to the gov. could even form those sentences. How in the world could people have such a perverted view?
Do we want MORE money pumped into the economy?
Look at the hundreds of billions that went into the economy from paying off Obama’s union campagn donors.
And how did that encourage and enable economic prosperity?
They also didn’t say yet whether the SS tax would be lowered by that 2% or whether we’d owe it next year. lol.
......Won’t the 2% reduction in Social Security tax now be subjected to state and federal income taxes? .....
I don’t think so. SS taxes are not deductible for income tax purposes. Adjusted Gross Income will not be changed and no income tax paid on the windfall. The amount os already taxable as income
How do you cut the Social Security contributions at the same time the “retirement” program is insolvent?
Would congress had agreed to the Social Security tax cut if it was still taking in more money than it was putting out in benefits? They were spending any and all money that was above the pay out.
Now that there is no surplus to spend, they cut the Social Security contributions? “We no longer have any money to spend from this program anyway, let’s cut the contributions.”
Explain to me.
Economists note paying people not to work is one of the most effective ways to energize an economy.
Is this a SNL skit?
Obama happily leads us to fiancial collapse. That’s part of the plan.
Now that there is no surplus to spend, they cut the Social Security contributions? “We no longer have any money to spend from this program anyway, let’s cut the contributions.”
Explain to me.
Good question. I was wondering the same thing myself. Who came up with this brilliant idea and what’s behind it.
Get with Tim Geitner or Charlie Rangel to get an answer to your question.
Since this is just a tax freeze how can it dump more money into the economy? And with Seniors and Ret. Military seeing NO COLA raises for the second year in a row....it means more Seniors going on the dole of food stamps, free commodities, and looking for assistance for their electric bills this winter?
The number of old frail seniors on walkers, canes, in wheel chairs lining up for commodities at my community center has nearly tripled in the last 18 months. They look like the hope has been sucked out of them.
Cutting your Social Security contribution by 2% would shift that money to your income that is taxable by federal and state governments.
If this actually occurs, then revenues to the treasury will grow.
But it also will dramatically raise the federal deficit.
How can both these statements be true? If GDP growth occurs, then taxes will increase to the treasury. Doesn't that help lower the deficit? Apparently not in the zero-sum world of the liberal media.
...its been often said....debasing the currency is the surest way into communism.
printing more paper greenbacks also pumps money into the economy but that doesn’t make it a good idea
On the plus side, the markets are much stronger and not as easily manipoulated as COMMUNISTS think. Also, we are not as stupid as they think. America awakes.
No, they are suggesting by shifting 2% of your Social Security contribution to taxable income and paying people to continue not working will dump money into the economy.
They use different words but this is what they are saying.
I got news for you. You already pay federal and state income tax on the FICA amount. It is not, like 401k contributions or pre-tax medical benefits, exempt from the withholding calculation. There is no "shift" with this plan.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.