Payroll tax

A little over two years ago the president by decree lowered the social security withholding tax from 6.2% to 4.2% giving a 2% raise to everyone who works. This is the way to help low income people if that is your objective. Republicans pointed out that most of these people pay no income tax and the Democrats said that they paid payroll tax. After that a war of words was started over taxation. The Republicans like to separate the payroll tax from income tax so they could say these people paid no tax. The Democrats always include the payroll tax so they can say these people do pay tax. As of January 1st this payroll tax reduction is no longer in effect so starting today the paychecks of everyone will be less. For all of those earning less than $110,000 per year this means a 2% reduction. This has not been covered by the news in all of the talk about fiscal cliff so many will be surprised when they see their check this week, especially those who remember that Obama said he would not raise tax on those making less than $200,000. To explain this, the Republicans will now lump the payroll tax in with the income tax and the Democrats will separate it out. This is an example of Washington speak. Most people will not have any idea of what happened but they will see the reduction in their pay. If a man earns $30,000 per year and is paid weekly his check this week will be $12 less and I can assure you he will notice.