Washington's tax deal pumps more money into economy

pioneer press ^ | 12-8-10 | AP

[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.

[Mr. Bird]

Meaning the 2% falls directly to your net pay and there are no further tax implications. It’s a pure cut.

[RoadTest]

“Washington’s tax deal pumps more money into economy”

But it’s counterfeit. Only the government gets away with printing counterfeit money. And them no for long.

[bert]

I can’t find that line on my 1040 where SS is deductible from gross income

[GailA]

Just got my SS statement for 2011, it is $214.32 LESS than this year amount. O’nazicare I think. We don’t make 1/4th the $250K for a couple.

They will hit hubby’s SS and his Navy pension too I think.

[reaganator]

The 2% cut in Social Security goes to taxable income column, it is no longer Social Security.

The Fedral Government is allowing you to “keep” it. It becomes taxable income, it is no longer your Social Security contribution.