Social Security Tax Cut

[cj's dad]

All we hear is how SS is broke. Now the geniuses in Congress with the blessing of their esteemed leader BO signed into effect a law which reduces the SS tax rate from 6.2% to 4.2% an overall reduction of 32.2%. Are the feds trying to speed up the demise of SS ?

In this generation of baby boomers which are signing up for SS benefits by the thousands every month, this cut will surely expedite the failure of the system. Maybe this is what BO, Reed and Pelosi had in mind.

Snip> Did you know that the federal government is giving virtually all wage earners and self-employed folks a 2% raise for 2011? Thanks to the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (aka Tax Relief Act of 2010), which President Obama signed into law on December 17, 2010, employee wages and/or self-employment income up to $106,800 will be subject to Social Security taxes of 4.2% -- a 2% drop from the 6.2% rate that's been in effect for many years. < Snip


http://ezinearticles.com/?Tax-Relief-Act-of-2010:-How-the-Social-Security-Tax-Cut-Affects-Small-Businesses-and-Their-Employees&id=5673972

[ArlJim78]

I can tell you why they put in the SS tax break. It was because of having to deal with the expiration of the Bush tax cuts. the president, democrats, and the media (sorry to be redundant) called this a tax cut bill when tax cuts were not on the table. they demagogued it and said we can't give tax cuts to the rich, only to the middleclass. the reality is there were no tax cuts, only maintaining the status quo.

they put in the SS relief because after having played up the tax cut aspect for so long, they had to deliver some token amount so that people would get the idea that taxes were cut. it was a gimmick and uncalled for. they patted themselves on the back for cutting taxes. most people don't pay close attention to realize it was a bunch of BS. they only see that their paycheck got a slight boost. in effect it was more stimulus spending.

[HUSKER55]

there is a lot of people who thought SS would solve their problems when they had to retire.

When I went to college there were students who believed that and didn't understand the concept of saving and investing.

Gov made a huge mistake IMO when those Ebonds dropped their rates.

you could buy a bond for $15 that was worth $25. Anybody could save money on any type of budget and get a decent return on their money. I think it worked out to about 8%.

If the gov had pumped those bonds it would be interesting to think about how different things would be now.

But...does anyone learn from the past? My point is that alot of people have the wrong attitude and playing politics is dangerous for the economy.

[boxcar]

All we hear is how SS is broke. Now the geniuses in Congress with the blessing of their esteemed leader BO signed into effect a law which reduces the SS tax rate from 6.2% to 4.2% an overall reduction of 32.2%. Are the feds trying to speed up the demise of SS ?

In this generation of baby boomers which are signing up for SS benefits by the thousands every month, this cut will surely expedite the failure of the system. Maybe this is what BO, Reed and Pelosi had in mind.

Snip> Did you know that the federal government is giving virtually all wage earners and self-employed folks a 2% raise for 2011? Thanks to the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (aka Tax Relief Act of 2010), which President Obama signed into law on December 17, 2010, employee wages and/or self-employment income up to $106,800 will be subject to Social Security taxes of 4.2% -- a 2% drop from the 6.2% rate that's been in effect for many years. < Snip


http://ezinearticles.com/?Tax-Relief-Act-of-2010:-How-the-Social-Security-Tax-Cut-Affects-Small-Businesses-and-Their-Employees&id=5673972

It's as mind-boggling now as it was back in December when they passed this. It makes no sense at all, since SS went into deficit mode last year and I believe is around 40 BIL.

The $64. question is: Can anyone be this stupid to cut the tax rate on a program that is on life support? And this was BO's plan! He was the one who came up with lamb-brained idea that flew in the face of his own Debt Commission. :bang: :bang:

This action is one of many that communicates to me that no one can be this stupid, which is what I was telling Elkabong a few days ago. This has to be a diabolical and maliciously planned strategy to create a crises. And after 2012, the deficit will be even larger. Reid doesn't want to touch SS -- obviously because of the upcoming elections.

I don't know if anyone heard or read Chris Christie's CPAC speech, but it was a good one. And he nailed the situation perfectly, saying that the Big 3 Entitlement Programs is a huge political football right now. The Dems don't want to be the first ones to even discuss the issues. They're hoping that the Repugs will fall into their "trap" and the be the party to use that nasty four-letter word that begins with a C---. Then then Dems would get the opportunity to demonize the Repugs for wanting to starve granny, etc., etc,

But the Repugs have to tackle this issue, as well as Medicare and Medicaid-- but they have to do it in a way that would heap burning coals upon the heads of Democrats. I just don't know if there's any Repug smart enough to formulate a "how to" strategy. This takes leadership; and I don't see any.

While the "Trustees" Report Summary states that it expects SS to bounce back and show small surpluses from 2012 thru 2014 "because of an improving economy" :bang: :bang: , what they overlook is the still high unemployment rate. There are a lot fewer people paying into the system now than back in the Bush days when unemployment was only around 5%. Interestingly, this rosy outlook for SS in this report conflicts with the Debt Commission's. Wonder how that happened? :rolleyes:

http://www.ssa.gov/oact/trsum/index.html

Boxcar

[mostpost]

All we hear is how SS is broke. Now the geniuses in Congress with the blessing of their esteemed leader BO signed into effect a law which reduces the SS tax rate from 6.2% to 4.2% an overall reduction of 32.2%. Are the feds trying to speed up the demise of SS ?

In this generation of baby boomers which are signing up for SS benefits by the thousands every month, this cut will surely expedite the failure of the system. Maybe this is what BO, Reed and Pelosi had in mind.

Snip> Did you know that the federal government is giving virtually all wage earners and self-employed folks a 2% raise for 2011? Thanks to the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (aka Tax Relief Act of 2010), which President Obama signed into law on December 17, 2010, employee wages and/or self-employment income up to $106,800 will be subject to Social Security taxes of 4.2% -- a 2% drop from the 6.2% rate that's been in effect for many years. < Snip


http://ezinearticles.com/?Tax-Relief-Act-of-2010:-How-the-Social-Security-Tax-Cut-Affects-Small-Businesses-and-Their-Employees&id=5673972
This cut is for 2011 only. Still, it's a stupid idea. What we need to do is eliminate the cap on contributions. Everyone should have to pay 6.2% regardless of how much they make. If they had done this from the beginning, we would not have a Social Security crisis.

[JustRalph]

I don't mind at all. Every damn dime of "my money" I can keep from the government, the better. They are going to screw my generation on Social Security anyway........I believe this is a one year deal only

[Tom]

This cut is for 2011 only. Still, it's a stupid idea. What we need to do is eliminate the cap on contributions. Everyone should have to pay 6.2% regardless of how much they make.

....and it came to pass that the Lord came down from the Heavens and said unto man...."Rejoice, for a miracle has been passed unto you all (God is from Arkansas) and this is a good thing.

mostie and Tom agree.
Now, I must visit Hell - time to go ice skating.

Amen

[Pell Mell]

[QUOTE=mostpost]This cut is for 2011 only. Still, it's a stupid idea. What we need to do is eliminate the cap on contributions. Everyone should have to pay 6.2% regardless of how much they make. If they had done this from the beginning, we would not have a Social Security crisis.[/QUOTE

YIPEE! WOW!

Mostie and I finally agree on something!!:jump:

[NJ Stinks]

Guess what? We couldn't afford to extend the Bush tax cuts either. But I didn't hear any wailing about that from the right.

So this year if you are making $50G's, you get to keep an extra grand. If you make a $100G's, you get to keep an extra two grand. Jim in Post #2 calls it a "token amount". Guess what. It's about the same amount of money that $50G and $100G earners saved every year due to the Bush tax cuts.

The main difference between Obama's tax cut to Social Security and the Bush tax cuts is that Obama's tax cut is limited to the first $106,800 a person makes. In other words, people who really need the money are getting the entire 2% reduction. Those that make more than $106,800 are getting less than a 2% reduction on their total earnings. Sounds about as fair as fair can get to me.

As far as eliminating the cap on contributions, I disagree. However, I do think the cap should be raised just as it has been historically over the years in order to keep SS solvent.

[boxcar]

Guess what? We couldn't afford to extend the Bush tax cuts either. But I didn't hear any wailing about that from the right.

"We"? You have a mouse in your pocket. I can certainly afford it!

And how could we wail when extending the cuts was YOUR messiah's idea? :lol: :lol: These are Obama's Extended Tax Cuts. He owns them!

Boxcar

[NJ Stinks]

"We"? You have a mouse in your pocket. I can certainly afford it!

And how could we wail when extending the cuts was YOUR messiah's idea? :lol: :lol: These are Obama's Extended Tax Cuts. He owns them!

Boxcar

I'm happy to say he does own this one. Let's see if he has the common sense to limit the SS tax cut to one year. As opposed to Bush and his fellow Republicans - who have rammed the Bush tax cuts through for at least 10 years. And counting....

You can look it up. :rolleyes:

[prospector]

gas prices are up,up and away...
food prices are starting to skyrocket..
yet, those on soc sec get no increase in monthly funds even though every dept of government gets raises for their departments.
maybe its time for a grey power crime wave..

[mostpost]

gas prices are up,up and away...
food prices are starting to skyrocket..
yet, those on soc sec get no increase in monthly funds even though every dept of government gets raises for their departments.
maybe its time for a grey power crime wave..
The problem with the Social Security COLA is that it only kicks in after prices go up. So for the rest of the year we will be paying more with less.

[riskman]

The employers match of 6.2% still remains in effect I believe. At the same time the Social Security tax cut was implemented, the Making Work Pay Tax Credit, worth up to $400 per person, was eliminated. That credit was available to individuals making up to $75,000, and married couples making up to $150,000. NJ Stinks could probably tell us what effect this has on take home pay.

[mostpost]

"We"? You have a mouse in your pocket. I can certainly afford it!

And how could we wail when extending the cuts was YOUR messiah's idea? :lol: :lol: These are Obama's Extended Tax Cuts. He owns them!

Boxcar
Here is the difference between NJ and Boxcar. When NJ says we could not afford to extend Bush's tax cuts, he is referring to all of us. As usual Boxcar sees everything from his own perspective. "It's good for me; I really don't care how it affects you." I'm trying to find that quote in the Bible. :rolleyes:

Obama's extended tax cuts?? Really? For a year Republicans were screaming about extending the Bush tax cuts. Suddenly the extension belongs to Obama. I don't think so. :bang:

[NJ Stinks]

The employers match of 6.2% still remains in effect I believe. At the same time the Social Security tax cut was implemented, the Making Work Pay Tax Credit, worth up to $400 per person, was eliminated. That credit was available to individuals making up to $75,000, and married couples making up to $150,000. NJ Stinks could probably tell us what effect this has on take home pay.

As far as I know The Making Work Pay Credit is back again in 2011, Riskman. Use Form 1040 Schedule M. I'm on my way out the door but here's something pasted from IRS.gov .

I'll check this out further later today.
_____________________________________

Five Important Facts about the Making Work Pay Credit

IRS Tax Tip 2011-15 January 21, 2011

Many working taxpayers are eligible for the Making Work Pay Tax Credit in 2010. The credit is based on earned income and is claimed on your 2010 tax return when you file your taxes in 2011.

Here are five things the IRS wants you to know about this tax credit to ensure you receive the entire amount for which you are eligible.

The Making Work Pay Credit provides a refundable tax credit of up to $400 for individuals and up to $800 for married taxpayers filing joint returns.
Most workers received the benefit of the Making Work Pay Credit through larger paychecks, reflecting reduced federal income tax withholding during 2010.
Taxpayers who file Form 1040 or 1040A will use Schedule M to figure the Making Work Pay Tax Credit. Completing Schedule M will help taxpayers determine whether they have already received the full credit in their paycheck or are due more money as a result of the credit.
Taxpayers who file Form 1040-EZ should use the worksheet for Line 8 on the back of the 1040-EZ to figure their Making Work Pay Credit.
You cannot take the credit if your modified adjusted gross income is $95,000 for individuals or $190,000 if married filing jointly or more, you can be claimed as a dependent on someone else return, you do not have a valid social security number or you are a nonresident alien.

Visit http://www.irs.gov/recovery for more information about the Making Work Pay Credit.

[NJ Stinks]

First, I want to make sure everyone understands that you can take the Making Work Pay Credit when you file your income tax return for 2010. Fill out Form 1040 Schedule M to find out if you are entitled to a Making Work Pay Credit for the tax year ending on December 31, 2010.

Secondly, I can certainly understand why Riskman thought the Making Work Pay Credit was out in 2010. Originally, Obama wanted to extend the Making Work Pay Credit into 2011 and beyond but as part of the tax compromise with Republicans last December, the Making Work Pay Credit was eliminated in 2011 and replaced by the Social Security Tax Cut that CJ's Dad is unhappy about. The article below explains it better than I am.
_____________________________


Tax Deal: ‘Making Work Pay’ Credit Out, Payroll Tax Cut In

By Conrad de Aenlle (http:///search/?q=Conrad+de+Aenlle) | Dec 8, 2010 |

The parsing of the tax deal (http://www.nytimes.com/2010/12/08/us/politics/08cong.html) reached between President Obama and Congress has focused on the two-year extension of the main features of the Bush-era tax cuts, including lower rates on earned income and much lower rates on dividends and long-term capital gains. Receiving less attention is one of the larger and more egalitarian tax breaks of the last two years, the “Making Work Pay” credit (http://moneywatch.bnet.com/investing/blog/against-grain/making-work-pay-an-easy-400-tax-credit-if-you-fill-in-the-right-form/494/).

Whether or not the credit - worth $400 each year for individuals earning $75,000 or less, double for married couples filing jointly - would be extended was a subject of some consternation (http://www.consumerismcommentary.com/making-work-pay-credit-extension/). Alas it was not part of the deal. There is something in the agreement to replace it (http://www.accountingtoday.com/news/Obama-Strikes-Deal-Bush-Tax-Cuts-Unemployment-56549-1.html), but whether taxpayers should feel better or worse or neither about it is up for debate.

The deal announced Monday calls for a reduction of two percentage points in the employee’s portion of the payroll tax, taking it from 6.2 percent on the first $106,800 of earnings to 4.2 percent. Anyone making the maximum will save a hefty $2,136, and power couples who both make enough will pay $4,272 less.

If you’re one of those high earners, you’ll come out way ahead, but the advantage diminishes along with income, of course, so those on very modest salaries will be worse off. And after next year, everyone is due to be worse off. While the extension of the Bush-era tax cuts generally applies for two years, the payroll tax break in the agreement will be one and done in 2011....

....All things considered, including the fact that “Making Work Pay” wasn’t part of the Bush-era cuts, the payroll tax cut seems like a very good deal for many, probably most, taxpayers. Just don’t forget to fill out Schedule M on Form 1040 by April 15 to claim “Making Work Pay” for 2010.

Entire article is at the link below:

http://moneywatch.bnet.com/investing/blog/against-grain/tax-deal-making-work-pay-credit-out-payroll-tax-cut-in/835/