Smaller Paychecks Hit Teachers to Dry Cleaners With End of U.S. Tax Breaks

[Purveyor]

By Jeff Green and Amanda J. Crawford - Jan 14, 2013
Phoenix high school teacher Kenny Williams said he’s cutting back on his “family splurge fund” for movie and sports outings after the reinstated U.S. payroll tax lowered his first paycheck of the year by $30.

The 46-year-old single dad of two was shopping at the 99 Cent Only store in Phoenix last week to save money on groceries and partly offset the $60-a-month cut he expects in his take- home pay. Dinners out also will go, he said.

“I don’t normally shop here for food, but I am now,” Williams said, as he struggled to find healthful items in an aisle he said was filled with high-fructose corn syrup. “You have to make up for it somehow. When you already are on a tight budget, something has to be done.”

By tomorrow, most Americans will have experienced the hit to their checks firsthand after Congress let a two-year-old payroll tax break expire while averting bigger automatic cuts that were to take effect this month. The 2 percentage point increase in taxes will take $125 billion from consumers’ pockets this year, estimates Michael Feroli, chief U.S. economist for JPMorgan Chase & Co., which in October lowered its forecast for first-quarter economic growth to 1 percent from 1.5 percent.

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http://www.bloomberg.com/news/print/2013-01-14/smaller-payday-trims-workers-splurges-as-u-s-tax-breaks-expire.html

[denverbill]

1. I wonder how many weeks the media will keep posting about this?

I can't remember any remotely similar coverage of when the cuts were enacted. But now that they are expiring, it's a calamity of biblical proportions.

[JaneyVee]

4. I actually remember right-wingers saying "ooh big deal, an extra $20/week in my paycheck"

As they were criticizing Obama about this tax break.

[Jennicut]

8. They hated the tax break at the time and called it insignificant and wasteful.

Some in the media even stated this. Now everyone is up in arms.

[JaneyVee]

10. Yep, they went into snark mode & laughed at it as part of stimulus. Now they weep for it.

[reteachinwi]

2. Give everyone a 2% wage hike

to offset the cost. Raise the minimum wage to $15/hr. Pass card check. Blame 30 years of regressive economic policy, not a restoration of FICA rates to their 2009 levels.

[leftstreet]

5. +1

[Scuba]

3. Fortunately, the billionaires only had to take a tiny hit and won't have to sell their 8th homes.

[global1]

6. We Have To Get The Word Out That This Money Goes To Their Social Security Fund And....

it is their money.

If the tax break was extended it would have a two-fold negative effect. 1. It weakens the SS fund and gives the Repugs an argument to tamper with it and make cuts, it plays into the Repugs argument; and 2. the American people would not know that the money taken out of their check for FICA goes to fund their SS and they would ultimately be getting it back when they reach retirement age (what it was intended to do).

Now that this tax break was let to expire - it is fresh in the minds of people (if we remind them and continue to remind them) that this is like a savings account for them so that when they retire they will have some money their to help fund their retirement.

Being so close to this upcoming debate on the deficit ceiling - we know that the Repugs are going to demand that there be some cutbacks on SS. The reaction to this should be - wait a minute - that $30.00 that comes out of my paycheck is my money. I know that it is my money. I see it missing from my paycheck. It is being put away from me for the future and my retirement. DON'T TOUCH MY MONEY. DON'T TOUCH OR TAMPER WITH MY SOCIAL SECURITY AND MY FUTURE.

Again - if this tax break didn't expire and the 2% was still in effect - most people wouldn't even know it. In fact - many people don't know what FICA is - they just know it is a deduction on their paycheck.

Now - it is fresh in their minds that this money that is taken out of their check is earmarked for them and their retirement. It is their money. They should be up in arms if the Repugs or Congress tries to tamper with that money.

Well - that's my theory on this.

[winterpark]

7. SS went up first of the year. FICA went up last week. It's now more than 2percent n/t

[Luminous Animal]

9. SS is FICA. Many people received their 1st paycheck of the year last week and this week.

So no. It is not more than 2%.