Wednesday, January 12, 2011

Social security tax cut

Effective January 1 the employee social security tax has been reduced from 6.2% of salary to 4.2%. This is a decrease of 32%!

I am on board with any decrease in the tax burden.

Vice-President Biden claims this will create jobs because it will put more money in the pocket of the consumer. In my opinion if the cut had applied to the employer share that would have created jobs quicker because it would have been a direct reduction in salary expense. This would have allowed dollars for additional employees.

I'm not sure we should listen to VP Biden though, since he seems to be economically illiterate. Here is a quote from him; "The legislation creating the tax cut requires that any money the payroll tax would have provided to Social Security be replaced by other U.S. general revenue funds, protecting Social Security without an additional burden on taxpayers."

This phrase "without an additional burden on taxpayers" is outrageous. Does he not know that general revenue is raised from taxpayers the same as social security funds, or does he just think the public is so stupid that they don't know when you're picking their pocket in order to give them an allowance.

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