What happened to the payroll tax holiday in the fiscal cliff deal?

[Bake]

Anybody know? Mrs. Bake said her SS withholding went up. I don't know.

Bake

[subterranean]

1. It expired as planned.

[Bake]

3. Were Dems not pushing to continue it?

Just asking.

Bake

[unblock]

5. no, it was always intended to be temporary.

in the long run this is a good thing. i liked it as a short-term help for working people, but long-term in undermines support for social security.

[bluestate10]

11. NO. Because too many democrats hated the tax holiday because they felt it hurt Social Security.

That point of view has been expressed continuously here on DU. Republicans hated the holiday because it helped mostly poor and middle class people.

[former9thward]

14. Yes. Obama wanted it extended for one.

He backed it in December. In a turnabout from a year ago, some Republican lawmakers say they are open to backing President Barack Obama's proposal to extend the payroll tax cut for a third year, possibly bringing the sides closer to a deal to avoid the fiscal cliff. http://www.huffingtonpost.com/2012/12/12/payroll-tax-cut_n_2288913.html

[BainsBane]

4. it expired, but not as planned

The President wanted it extended for another year, but Republicans have always hated it since it doesn't go to the wealthy. And there hasn't been a groundswell of support for it among Democrats either. Those who most need that tax relief don't have a lobby in Washington.

[hfojvt]

7. it actually does goto the wealthy

just not quite as much as the rest of the "deal". http://journals.democraticunderground.com/hfojvt/160

[BainsBane]

8. It benefits those who don't earn enough to pay income tax

That argument is absurd, particularly the top 20% statistic. The top incomes don't even pay payroll taxes. The tax is a regressive one capped at $110,000. It is a flat tax, so the cut is flat as well. But that payroll tax holiday was most important to the poorest Americans. To argue it benefits the rich is specious. People need to be honest. The concern here is Social Security above the poor and above economic stimulus. The rest is an excuse.

[hfojvt]

10. it is not flat

because 2% of $110,000 is a whole lot more than 2% of $11,000.

The making work pay credit also applied to people too poor to pay income tax. And it was $400 for the person making $11,000 and $400 for the person making $60,000 and zero for the person making $110,000. Check out the link within the link.

Those numbers are not made up or specious, they are honest analysis, and I got almost the same numbers myself from income tax statistics.

You just deny them without doing any calculations, based on your emotions. Be honest yourself and do the math. Is 2% of $11,000 really NOT much less than 2% of $110,000?

[BainsBane]

15. Marking work pay credit is not a payroll tax credit

It is part of the tax code. The top 20% of incomes up to $110 k is not the top 20% of Americans and to portray it as such is misleading.

The tax absolutely is flat. How do you suppose you can calculate a flat cut if the tax isn't flat? Payroll taxes are 15.3 percent if one earns $5000 a year and 15.3% if one earns $110,00 a year. If someone takes in 5 million a year--and if they pay payroll tax at all--their tax and their cut is no higher than the person earning $110 a year. How is that not flat? The cut is flat because the tax is flat. Payroll taxes are the most regressive taxes we pay in this nation.

[hfojvt]

16. the last line is true

payroll taxes are regressive.

But the fact of the matter is that cutting them by 2% was better for the richest 20% than it was for the bottom 20% - by FAR.

Out of $112 billion in payroll tax cuts

$52 billion went to the top 20%
$16 billion went to the top 5%
$3.4 billion went to the top 1%

$4.3 billion went to the bottom 20%

That does not look very flat to me. From where I sit $52 billion is a whole heck of a lot more than $4.3 billion.

Obama, friend of the poor that he is NOT, got rid of the making work pay credit and replaced it with the accursed payroll tax credit.

The making work pay credit was much better for the lower classes. It cost $57 billion, of that amount

$7.3 billion went to the bottom 20%
ZERO went to the top 1%
$0.8 billion went to the top 5%
$13.3 billion went to the top 20%

The accursed payroll tax cut should GO AWAY and the making work pay credit should come back.

http://www.ctj.org/pdf/taxcompromise2010.pdf

[BainsBane]

18. your stats are deliberately distortive

The "richest 20%" are not rich. They are middle class. The richest 20% of Americans make far more than $80-110 k. It's like saying the richest 20% of Walmart cashiers. They make more than the bottom 80% of Walmart cashiers, but exponentially less than the top 20% of Americans. The payroll tax holiday cut was regressive because the tax is regressive.

The payroll tax holiday is gone. Read the newspaper.

[hfojvt]

19. it's kinda sad

how useless it is to try to talk facts to some people.

The richest 20% are not in the middle.

By definition they make more than 80% of the rest of us.

Yes, many in the top 20% DO make MORE than $110,000. But guess what that means? That means they only get $2,200 from the accursed payroll tax cut instead of 2% of their income.

But so what. $2,200 is still far, far more than what 2% of MY income is, even now being only about $666. You see how that works? Almost everybody in the top 20% gets $2,200 from the accursed payroll tax cut. Whereas people in the bottom 20%, because their average income is only $14,000 only get $280.

I am glad that the accursed payroll tax cut is gone.

Because it heavily favored the rich. $52 billion is far more than $4.3 billion, and $2,200 is far more than $280.

At least by my math.

[BainsBane]

24. You haven't calculated the richest 20%

You've calculated the top 20% up to $110. They are not richer than 80% of us. That is mathematically false. Your math imagines no one in this country earns more than $110k. The average income in this country is $50k. The payroll taxes goes to just over twice that level. $91,000 a year is the bottom income of the top quintile of incomes in the US, which extend well into the billions. http://en.wikipedia.org/wiki/Household_income_in_the_United_States
Obviously a tiny fraction of the country holds the vast majority of that wealth.

The rich don't pay payroll taxes. Anyone who earns over $110k only pays payroll takes on that first portion of their income, and the investor class that lives off capital gains don't pay payroll taxes at all. Or if they do, they pay it on a tiny fraction of their income, which is in the millions and billions of dollars. Do you really imagine the problem in America is too many people making $110k a year? That's parking meter money to America's rich.

You remind me of the anti-union folks pissed off that someone is making $17 an hour when they make only $9 an hour. Be pissed off all you want, but it ignores the real dimensions of economic disparity and exploitation in this country.

[hfojvt]

25. oh good grief

check out the damned link

http://www.ctj.org/pdf/taxcompromise2010.pdf

He includes the top 20% who make more than $110,000.

It says right there in the table. The top 10% make more than $127,000 a year, their average income is $316,000 and they get 26.7% of the accursed payroll tax cut.

Meanwhile the poorest 40 only gets 12.1%.

I never said that the tax cut that went to the top 5% was a lot of money to them, what I said was that the $16 billion going to the richest 5% was a hell of a lot more than the $4.3 billion going to the poorest 20%.

Or are you still going to argue that $16 billion is less than $4.3 billion or that it is flat?

[JDPriestly]

27. I'm on Social Security right now, and I'm glad I paid the tax.

[hfojvt]

32. I am talking about the payroll tax cut rather than the payroll tax

although it would also be nice if the payroll tax went away.

Social security could be funded by the income tax and it would be much more beneficial to those at the bottom. Credits could be calculated the same way - from wages reported to the IRS, but instead of being paid for by payroll taxes, which hit those at the bottom with a 10.4% tax rate and are a much lower rate for those further above the cap. Instead it could be funded by increases in the income tax, where the bottom 50% pays only an average of 2.59% right nowhttp://journals.democraticunderground.com/hfojvt/169 , much lower than either 10.4% or 5.2%.

[JDPriestly]

33. There are different ways it "could" be done, but the political will is barely there

to continue to do what we are doing. Changing it would put the idea of Social Security in jeopardy. That is why I do not favor changing it at all.

I agree we should raise the cap. And your idea is more detailed but rather similar to something I have suggested -- that we raise the cap and lower the tax rate for Social Security on everyone. But I am realistic to know that will not happen until we have a general acceptance of the fact that while everyone should be strongly encouraged to save money for retirement beyond Social Security, we have to have Social Security as a basis for insuring that in times of crisis or emergency, our seniors can survive.

[HiPointDem]

17. Employers pay half.

[JDPriestly]

26. Social Security is more important to the poor and the middle class than to anyone else.

We need the payroll tax revenue to insure that the Republicans won't just do away with Social Security. It is a dedicated tax that goes right back into the taxpayer's pocket when he or she retires.

Strange thing is that out of one side of the mouth the Republicans claim that Social Security recipients receive too much because they get "more than they put in," thus forgetting that the Social Security (FICA or payroll) taxes go into the Social Security Trust Fund and earn interest.

Out of the other side of the mouth, Republicans tell us that there is no Social Security Trust Fund.

If you read the statutes, you will see that, yes, Rush Limbaugh, there is a Social Security Trust Fund and, yes, the rest of the government owes it a lot of money.

Millions of poor and middle class Americans rely primarily on Social Security to keep them alive in their senior years.

I'm glad that the payroll tax vacation has expired. The Social Security Trust Fund will be replenished and the Social Security system will remain healthy.

It was very strange that conservatives say that Social Security is in trouble but then complain when the tax that funds Social Security is returned to the percentage that the Reagan administration calculated was needed to maintain the solvency of the program. Makes you wonder what their real motives are. They appear to want to ruin the program and they aren't subtle about what they want.

The tax is not that great a burden. After all, those of us who are now retired paid the full tax beginning during the Reagan administration.

[BainsBane]

29. Not if they are under 65

It is far more important to feed their families. Most of the poor in this country are children, and a considerable number never reach retirement age. SS is more important to YOU, but it is not more important to everyone.

You seem to have little understanding of how much 2% of a pay check means to someone who can barely afford food and shelter. It may not be a significant burden to the upper middle class, but losing 7.5% or 2% of one's income is a very big deal for the working poor.

You have gotten a great deal in services for the taxes you payed over your lifetime, far more than we get today. You also receive far more in SS and Medicare benefits than you paid in. You feel that is justified, but you have NO right to say isn't a big deal for the working poor to pay a sizable tax that many will never see any benefit from.

[JDPriestly]

30. I wasn't rich. I know what it means.

I also know that being poor when you are old is much worse than being poor when you are young.

I was raised in a poor family and raised my own family on very little money. You don't need to tell me about how life is for the poor.

Nevertheless, Social Security is not just for the elderly. The system on the whole serves a lot of people including survivors and their families. In addition, we fund SSI.

Social Security helps those who grow too old to work. And they are the people who need help.

We should also help children and families. I am in favor of giving tax refunds to low income people above and beyond what they pay into taxes. The Negative Income Tax is what they call it. But that should be independent from the Social Security payroll tax obligation.

Seems to me that the very low income people should receive more in their negative income tax payment than the additional payroll tax they will pay. I don't know how much the negative income tax is, but it should help out. It did not exist when I was young.

I got my Social Security card when I was 14. Many in my generation did. I have worked as a waitress, in child care, all kinds of jobs. I worked my way through school and know what it is to live on the minimum wage. You don't need to preach at me about what it is to pay Social Security tax when you are poor.

I am in favor of payroll taxes because I want the younger generations to also get back more than they paid in. And by the way, "you are getting back more than you paid in" is a familiar Republican mantra.

Getting more than you pay in is the American way. It is the hope of every investor. Of course, our payroll taxes earn interest and gain in value. Just like everything else. In addition, the small amounts I paid into Social Security when I was young if valued according to the inflation rate and the years of interest are worth a great deal more now than what I receive from Social Security.

If you die young as some in my family have, you are more likely to have been able to work up until your death. Social Security is for the elderly. And we need it because we are generally not employable. The Republicans who advocate for raising the Social Security and Medicare eligibility ages need to be careful what they ask for. Raising those ages will increase the numbers of lawsuits and the amount of damages awarded for age discrimination.

Age discrimination by employers is a much bigger threat to young workers as they grow older than the discontinuance of the payroll tax vacation. This is something that a lot of Americans in their 50s have discovered in recent years. They are out of the workforce, unlikely to get back in and counting the days until they can get Social Security.

This is the wrong time to talk about continuing the payroll tax vacation. The wrong time to say anything about changing Social Security or Medicare.

Millions of Americans who are out of work or underemployed and in their 50s know that their one hope is Social Security. If they were lucky enough to save some money for retirement, they are living on that right now. There will be nothing left.

For those who die before they are eligible for Social Security there is not such a loss because money from the system will go to their survivors.

Honestly! Social Security is the best thing in America. Best thing. It holds our society together and gives each of us hope for dignity in our final years.

[tyne]

6. I heard

that the president fought to make it permanent but lost out to the repubs.

Pass that around on Facebook when they complain that the president raised their taxes.

The dems were successful in gaining revenue from those making more than a thousand dollars a day. The repubs were successful in raising taxes on the middle-class.

[Proud Public Servant]

2. Holiday's over

Surprised the missus is seeing that already, but that's the deal.

[Atman]

12. Does that mean I have to take my Payroll Holiday ornaments off the mantle now?

Damn. I loved the Little DUmmer Boy one.

[enlightenment]

9. It's over.

My FICA almost doubled.

[high density]

13. The politicians were too busy arguing over $250k vs $400k to care about the payroll tax holiday

So it expired... I thought it never should've been instituted in the first place.

[Puzzledtraveller]

20. You're going to be called a cry baby who should have planned for this

just look at some of the responses in the other thread.
http://www.democraticunderground.com/?com=view_post&forum=1002&pid=2125273

[TheKentuckian]

21. It should have never been passed. The response on both ends was as predictable as the rising sun

Benefit went largely unnoticed but the moment it is gone the gnashing of teeth sets in from all sides.

"It was the only stimulus the Republicans would let him have", possibly true and that alone should create pause and careful consideration.

[anarch]

22. the holiday is over

I was pretty much paycheck-to-paycheck already, and my rent is also increasing at the same time, as are my insurance premiums. And I got a fairly meaningless increase in my salary this year, too, so it all amounts to a net reduction in my budget for food, which is really all I have money left over for after rent and bills.

Not sure what else I can cut back on at this point--I haven't bought new clothes or anything like that in several years...may have to try to get another job or something.

[JDPriestly]

31. We need to extend the cap on the payments and then reduce the amount of the tax

on all income levels. That would be a good idea in my opinion.

[Motown_Johnny]

23. It only effects income up to $113,700 so nobody fought to extend it.

It also helps secure Social Security so the (D)s didn't really want to extend it. Besides that, it was a cut that Pres. Obama put in place so the (R)s didn't want to get into an argument where part of the conversation was about the tax cut Pres. Obama gave to working people.

Plus, (R)s are all for taxes on the lower income groups. They only want to cut taxes that impact rich people.

That is the dirty little secret that shouldn't be a secret.


Even when (D)s point out that Reagan raised taxes, they never point out that the taxes he raised were regressive.

The (R)s are not against taxes, they are only against taxes on the wealthy.

[wercal]

28. One thing I havent seen on these threads

Did anyone run the numbers on removing the cap and keeping the holiday?

[Cleita]

36. I think there was mention in the media about removing or at least raising the cap.

It would accomplish replenishing the fund and still keeping the FICA deduction in place. Of course, raising the cap would involve taxing the richer so I guess it was easier to tax the poor again.

[Cleita]

34. Holiday is over. n/t

[Recursion]

35. It ate my COLA

Oh well.