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The cost to the economy for rolling back the Payroll Tax Holiday is over $100B a year.

The average $50,000 wage earner is going to feel as if $100 was taken from their paycheck.

Many will not realize this was the tax cut they never gave credit to President Obama for ever receiving.

Regardless, people will feel this loss of $100 each month.  Add this to the increased taxes for those earning over $400K and we have some very real recessionary pressure on our economy.

Are Democrats willing to get the stimulus of a Payroll Tax Holiday back into the economy?

Would you be willing to get economic growth now in exchange for chained CPI cost-of-living allowance in the future for a savings of $125B year?

Are we willing to effectively borrow $125B from our future in order to generate $100B in economic activity today?

Is it better to get higher growth rate in GDP and a lower COLA, or a lower growth rate in GDP and higher COLA?

If we all get a permanent Payroll Tax Holiday, would you be willing to change to a chained CPI for your COLA?

If this change is made to SS, this is a cut to spending by $250B over a decade.

The people who pay the biggest price for chained CPI would be the people receiving the Payroll Tax Holiday today….but you’d be receiving a smaller COLA on a bigger base and might well be ahead of the game by the time you collect SS.......  

I am a Democrat and I would accept chained CPI in exchange for a reduced payroll tax.

Poll

Would you want a Payroll Tax Cut in exchange for Chained CPI?

12%5 votes
87%35 votes

| 40 votes | Vote | Results

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Comment Preferences

  •  I'd want it all for a chained CPI. (1+ / 0-)
    Recommended by:
    fenway49

    Seriously.

    "Nothing in all the world is more dangerous than sincere ignorance and conscientious stupidity." --M. L. King "You can't fix stupid" --Ron White -6.00, -5.18

    by zenbassoon on Fri Jan 04, 2013 at 08:39:38 AM PST

  •   Payroll Taxes are how we save for retirement. (12+ / 0-)

    No payroll taxes means no Social Security. Americans will pay our bills.  

    As for the other of your two bad ideas, accounting gimmicks to reduce those retirement payments are unnecessary, unwarranted, and bad policy.

    •  Who Pays Payroll Tax (0+ / 0-)

      Both employers and individual pay payroll tax.

      The payroll tax holiday was for individuals, not employers.

      Your next paycheck is going to be missing 2% because the payroll tax holiday was eliminated.

      •  Taking care of the vulnerable costs money. (3+ / 0-)
        Recommended by:
        kck, Mr Robert, trumpeter

        Those of us committed to the idea of civilization understand that.

        "Furthermore, if you think this would be the very very last cut ever if we let it happen, you are a very confused little rabbit." cai

        by JesseCW on Fri Jan 04, 2013 at 09:33:37 AM PST

        [ Parent ]

      •  And retirement benefits will be less ... (3+ / 0-)
        Recommended by:
        kck, Mr Robert, trumpeter

        because less was paid in.  Benefits are calculated on the amount actually paid in with the Social Security "tax", thus everyone who paid less last year will see their benefits reduced; i.e., everyone who worked last year will get less in the future.  (The upside, if you're willing to call it that, is that the Social Security deficit was lessened, meaning total benefits won't have to be cut quite as soon as previously projected.)  Continuing the cuts will hurt all future retirees because the cuts will reduce their eventual benefits even further, which will affect them for the entirety of their retirement years.  Was it worth it in exchange for a possible stimulus benefit?

        "Two things are infinite: the universe and human stupidity, and I am not sure about the universe." -- Albert Einstein

        by Neuroptimalian on Fri Jan 04, 2013 at 11:01:12 AM PST

        [ Parent ]

      •  If anything, we need to raise or lift the cap on (0+ / 0-)

        taxable wages, and consider a very minor increase in payroll taxes--perhaps 1/2%.

        Mollie

        “If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

        by musiccitymollie on Fri Jan 04, 2013 at 08:15:48 PM PST

        [ Parent ]

  •  At $50k a year (5+ / 0-)

    The end of the payroll tax holiday costs $38 per paycheck or $83 per month. "$100 was taken from their paycheck" caught my eye because I knew it was wrong.

    A conservative is a man with two perfectly good legs who, however, has never learned how to walk forward. Franklin D. Roosevelt

    by notrouble on Fri Jan 04, 2013 at 08:52:41 AM PST

    •  I'll venture a guess.... (0+ / 0-)

      the average person who reads DailyKos makes closer to $60,000 than the actual median household income of $52K.

      Anything between $52K - $60K is about $100 a month to someone.

      You're gonna quibble about $17 a month on a $1200/month payment?  Seriously?

      Any one year of oversize inflation and/or deflation, and these numbers become barely a collective hunch.

      •  "$100 was taken from their paycheck" (3+ / 0-)
        Recommended by:
        JesseCW, Neuroptimalian, trumpeter

        which most people receive very 2 weeks. When I first saw that I knew it didn't add up. No one will have their SSI tax go up that much.

        A conservative is a man with two perfectly good legs who, however, has never learned how to walk forward. Franklin D. Roosevelt

        by notrouble on Fri Jan 04, 2013 at 09:20:17 AM PST

        [ Parent ]

        •  -$43 or -$50 (0+ / 0-)

          I have no idea what part of $100/month you do not understand.

          Per paycheck, you're making a distinction between $43 and $50.

          Do you think a person with a $2500/month in take home is going to distinguish between a new take home amount of $2417 and $2400?  Either way, it's gonna' be less than their paycheck was last week.

          Either way, that's two less tanks of gasoline, or cable bill that can be paid, or college fund that can be goosed, etc.

      •  $17 per month (1+ / 0-)
        Recommended by:
        trumpeter

        means a lot to someone on Social Security who is getting a check for $1,000-12,000 per month.  You want to make those people pay because people making $60,000-$70,000 are losing their payroll tax holiday?  That is sick.

        All that is necessary is to raise the cap slightly on SS payroll tax deductions.  But you'd rather take it out of the hide of old and disabled people who are already struggling to be able to eat and heat their homes.

        •  This change won't affect someone collecting SSI (0+ / 0-)

          since it is a 2% increase on the Social Security Insurance tax. That tax is collected on wages, but not other kinds of income. Pension, Social Security, and investment income isn't subject to SSI tax.

          Chained CPI would cut into future cost of living increases for Social Security recipients. For that reason we (most of us anyway) don't want to go there. It weakens the SSI safety net. That is part of the reason this deal allows the SSI tax to return to previous levels. It will improve the long term solvency of the SSI trust fund.

          A conservative is a man with two perfectly good legs who, however, has never learned how to walk forward. Franklin D. Roosevelt

          by notrouble on Fri Jan 04, 2013 at 02:39:40 PM PST

          [ Parent ]

  •  No (10+ / 0-)

    A thousand times no.

    Ending the Defunding of Social Security tax cut was the right thing to do.

    Chuck Hagel for Defense Secretary

    by Paleo on Fri Jan 04, 2013 at 08:55:19 AM PST

    •  YES (0+ / 0-)

      It just gave Republicans another ZOMG SS GOING BANKRUPT talking point.

      "Believe nothing, no matter where you read it, or who said it... unless it agrees with your own reason and your own common sense." -The Buddha

      by Brian A on Fri Jan 04, 2013 at 09:20:55 AM PST

      [ Parent ]

      •  To the contrary (0+ / 0-)

        I proposed spending $100B today for saving $125B in social security liabilities.

        In Washington terms, we'd be saving $25B/year.

        And before you suggest that we'd be taking in $1 trillion less to SS trust fund over the decade, that assumes we receive no growth benefits from my investing $100B today.

        Higher growth = higher incomes.

        Higher incomes = more SS revenue.

      •  No, it didn't. (0+ / 0-)

        The money was being replaced from the general fund. So no threat to current funding.

        “We are not a nation that says ‘don’t ask, don’t tell.’ We are a nation that says ‘out of many, we are one.’” -Barack Obama

        by skohayes on Fri Jan 04, 2013 at 10:05:38 AM PST

        [ Parent ]

        •  Of course it was a threat to current funding (2+ / 0-)
          Recommended by:
          JesseCW, Mr Robert

          Taking money from the general fund to fund SS and medicare, especially SS, eliminates our whole "SS is a self-sustaining system and doesn't add to the deficit" argument, doesnt it?

          "Believe nothing, no matter where you read it, or who said it... unless it agrees with your own reason and your own common sense." -The Buddha

          by Brian A on Fri Jan 04, 2013 at 11:25:17 AM PST

          [ Parent ]

  •  Most people didn't even notice the 2% tax cut (4+ / 0-)
    Recommended by:
    tardis10, JesseCW, quill, Mr Robert

    The way to give a stimulis is by writing stimilus checks like George Bush did.  People noticed them and appreciated Bush for the tax cuts.

    These adjustments in paychecks did not even get noticed.  Amazing how Fox News is trying now to actually get people to pay attention to this.

  •  Let's put it in this way (6+ / 0-)

    by instituting another payroll tax holiday, you are REDUCING the amount you put into YOUR retirement every paycheck.

    In exchange, you are agreeing to get LESS when you retire.

    So if you are willing to have LESS when you will need it the MOST (in retirement), in exchange for getting MORE now just so you can buy a few more toys....

    The payroll tax affects people who have a job and I would maintain that a person making $50K/yr can manage a $1200/yr MANDATORY SAVINGS FOR THEIR RETIREMENT SECURITY.

    On the other hand, my mother, who receives $13K a year from Social Security cannot afford any less than she already gets, which is pitifully inadequate for the wife of a WWII veteran who spent her whole life raising 4 children and working in a home business..

    Let's see how your opinion changes when you start drawing Social Security.

    Better yet, find a relative who is on Social Security and ask them if they could do with less.

    I doubt they would be very enthusiastic.

    Are you sure you've gone all the way from red to blue? Your opinion on this matter sounds suspiciously "red".

    There are only two types of Republicans: 1) racists; and 2) people who are willing to be associated with racists.

    by hillbrook green on Fri Jan 04, 2013 at 09:01:06 AM PST

    •  Your assumptions leaves out growth (0+ / 0-)

      If we remove the $125B from our economy today, as we've just done by reversing the payroll tax holiday, then we are going to experience recessionary pressure.

      By definition, we are going to have lower growth next year because we've just removed $125B by reducing every single paycheck by an average of about $85/month ($100 is so much easier to visualize).  Lower growth will yield lower inflation.

      Lower inflation has already had a negative impact on people currently receiving social security.

      Why do you want lower inflation and lower COLA's?

      My solution is higher inflation and higher COLA's based on a chained CPI.

      Lower growth and inflation means we never get out from behind our current fiscal mess.

      Higher growth and inflation means our economic mess shrinks.

      •  Assumptions. (2+ / 0-)
        Recommended by:
        Mr Robert, trumpeter

        This is the same gobbledegook that comes out of Washington every day.

        Would you care to offer solid PROOF that their will be higher inflation 20 years from now? Thus justifying your claim that a chained CPI will have a negligible effect on those who rely on it?

        NO. You can't. Because no one can predict the future.

        This is the same kind of baloney that is being offered by the proponents of converting Social Security to a private individual retirement plan "guaranteed" by the "magic" of Wall Street to be totally awesome.

        Yes, higher growth and inflation would lower the deficit.

        But at what cost? How will it affect the "little people"? The people who can't afford to invest? The people who, by definition of our capitalist system which requires (we are told) a 5-6% unemployment rate in order to be "efficient", live paycheck to paycheck and end up below the poverty line when they are broken and no longer able to work?

        These are the people that are always left out of the equation by brilliant "economists" who base their science on predictions of rosy times ahead.

        No, thank you.

        I agree with your premise that stagflation is not a good thing. But there are many many ways for us to get out from under this so-called "current fiscal mess".

        Like putting people to work.

        Or just having the government print money and give it to poor people to spend. You see, poor people spend every dollar they get because they have to, as opposed to rich people who sock it away so that their darling offspring can live the life of Gatsby and never have to work a day in their lives.

        Printing money will have exactly the same effect of producing higher inflation and higher COLA's and the COLA rate will not be reduced as it would be with Chained CPI.

        As I said, why don't you find a relative and ask them if they would like a lower COLA on their Social Security benefits? You could pick a really old relative who maybe has lost a little bit of cognitive ability. Maybe they will buy your story. Or maybe they're a Republican and have already drunk the kool-aid; that would help sell it.

        There are only two types of Republicans: 1) racists; and 2) people who are willing to be associated with racists.

        by hillbrook green on Fri Jan 04, 2013 at 11:34:32 AM PST

        [ Parent ]

  •  I paid payroll tax for my grandfather born in 1882 (5+ / 0-)

    and I paid payroll tax for my mother born in 1921 who is still collecting Social Security at the age of 92.  Now, you want a tax cut so you don't have to fund my Social Security.  And you think Boomers are the problem!  

    Adjust the cap sure, but the money does have to come from somewhere and we can't have both low payroll taxes and Social Security and Medicare.  

    The payroll tax cut was always a bad idea.  

    •  I won't be receiving SS until I'm 67..... (0+ / 0-)

      ....because SS payments to the Baby Boomer generation is fully funded and your 92 mother is getting far more than she paid into the system.  In all likelihood, so too shall you receive more than you paid in.

      The solvency of needing to reduce SS payments of less than 100% of promised benefits is decades away.  The strain is from the statistical blip of baby boomers.

      A change in the formula is necessary.

      There are many ways to skin this cat.

      I already gave up something (I get SS at 67), why are you not willing to give up a COLA that amounts to $3/month so that I can get 100% of my benefits?

      And if I'm correct, then putting $125B back into the economy today with a payroll tax holiday to wage earners will generate more growth and give you a higher SS payment (even after using chained CPI).

      And before anyone says to simply raise the payroll tax on current incomes above $110,000 current threshold - how many taxes are enough before the middle class gets a break?

      ObamaCare raised some taxes on high earners, not just the rich.  Clinton tax rates on incomes above $400K is another tax hike.  And folks also want to raise payroll taxes on these folks to shore up social security.  When will my fellow Democrats be satisfied taxing people who make a good living but are not rich?

      •  I just love how people are eager ... (2+ / 0-)
        Recommended by:
        Mr Robert, trumpeter

        to kick the can of fixing SS down the road so that it doesn't affect them, only the next generation (who apparently can go hang themselves, as far as anyone today cares).  The longer the wait, the worse it will be for those people.

        "Two things are infinite: the universe and human stupidity, and I am not sure about the universe." -- Albert Einstein

        by Neuroptimalian on Fri Jan 04, 2013 at 11:10:20 AM PST

        [ Parent ]

        •  Bowles-Simpson doesn't call for shielding Boomers (0+ / 0-)

          from cuts, if that's a concern of yours.  [At the most, Boomers born in years 1946 thru 1950, or approximately 27% of Boomers, MAY escape most the cuts, except for the Chained CPI.]

          And this is definitely NOT in keeping with past practices.  It has always been considered the humane thing to do to "shield" those near retirement age, by exempting them from the deepest, most abrupt cuts.

          Clearly, a 20- or 30-year-old has many years to plan for, and make adjustments to changes in the Social Security program, compared to individuals who are nearing retirement age.

          The draconian cuts that Bowles-Simpson prescribe (if all three are enacted) will represent a departure from that custom.

          Mollie

          “If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

          by musiccitymollie on Fri Jan 04, 2013 at 08:47:23 PM PST

          [ Parent ]

      •  If you're lucky, you'll be able to wait until (1+ / 0-)
        Recommended by:
        Mr Robert

        you're 67, but there is no guarantee you'll be lucky.

        You do understand that the Chained CPI wouldn't be for one year, right?

        You do understand what "compounded" means in this context, right?

        Growth doesn't create a COLA increase.  Increases in the cost of living do.

        I've seen "not even wrong" before, but never so rapidly.

        "Furthermore, if you think this would be the very very last cut ever if we let it happen, you are a very confused little rabbit." cai

        by JesseCW on Fri Jan 04, 2013 at 11:38:59 AM PST

        [ Parent ]

      •  Sorry, RtB, but you are making some baseless (0+ / 0-)

        assumptions.

        People (Boomers) retiring today ARE NOT getting more than they paid in, although some of their parents may have.

        See excerpt below from AP article entitled, "New Retirees Receiving Less In Social Security, Than They Paid In."

        . . . As recently as 1985, workers at every income level could retire and expect to get more in benefits than they paid in Social Security taxes, though they didn't do quite as well as their parents and grandparents.

        Not anymore.

        A married couple retiring last year, after both spouses earned average lifetime wages, paid about $598,000 in Social Security taxes during their careers. They can expect to collect about $556,000 in benefits if the man lives to 82 and the woman lives to 85, according to a 2011 study by the Urban Institute, a Washington think tank.

        And this is after having their payroll taxes doubled in the 1980's.

        Here's the link to the article.

        Don't think many Boomers will settle for further cuts.  You're wasting your time, IMO.

        Mollie

        “If a dog won’t come to you after having looked you in the face, you should go home and examine your conscience.” -- Woodrow Wilson

        by musiccitymollie on Fri Jan 04, 2013 at 08:35:32 PM PST

        [ Parent ]

  •  A thousand times, no (6+ / 0-)

    Your suggestion is a non-starter. The numbers don't match; they'd cut Soc. Sec. by a lot more than the chained CPI reductions if they made the payroll tax holiday.

    The 2010 payroll tax cut was good only in the sense that it was the only stimulus (more cash in the hands of people who would spend it) that Obama could get. It was awful in the sense that it gives credence to suggestions like yours and thus opens the door for a dramatically undermined Social Security. Since, as you say, Obama got no credit anyway, there was no political benefit to it beyond economic improvement via stimulus.

    But don't forget: they could have gotten the same stimulus (the $100 extra in people's paychecks), and left Social Security the hell alone, by cutting INCOME taxes on lower earners by the same amount.  

    Look at this in context. Payroll taxes have been artificially high since the Reagan-O'Neill deal of 1983. Since then Social Security has run a surplus virtually every year, which was by invested in Treasury bonds. They cut taxes on the wealthiest Americans so damn much that, even with this easy source of credit from working Americans not given a choice in the matter, they STILL ran up massive deficits under Reagan and Bush II.

    They did it deliberately, to "starve the beast." Apparently it's worked. After 30 years of working Americans paying, through their higher payroll taxes, to cushion the blow of extreme tax cuts for the rich, now they want to blame the "deficit" on Social Security?

    No. Keep Soc. Sec. separate, tweak it to pay its own way, and stimulate the economy some other damn way.

    Republicans...think the American standard of living is a fine thing--so long as it doesn't spread to all the people. And they admire the Government of the United States so much that they would like to buy it. Harry S. Truman

    by fenway49 on Fri Jan 04, 2013 at 09:04:59 AM PST

  •  Not just no but hell no (4+ / 0-)
    Recommended by:
    BeerNotWar, JesseCW, Mr Robert, trumpeter

    I never agreed with the payroll tax cut it was like cutting your own throat. If anything we need SS to pay out more not less .  The Republican will not stop there anyways next mission lay waste to Medicare/Medicaid and then go back and finish off SS . Lets face it they hate us and a lot of the people who vote stand to benefit from SS/ Medicare etc seem to hate themselves. After all just how stupid do you have to be to vote for people who want to kill off the programs that will help you when you are old or need help the most.

  •  How about a tax increase (4+ / 0-)
    Recommended by:
    JesseCW, Hockeyray, Mr Robert, trumpeter

    How about we raise the cap on SS payroll tax up to where it would be if it had always been adjusted for inflation from day one? Not only would that be likely to make SS secure, we could probably lower the overall tax rate of the payroll tax for everyone, thus boosting the economy.

  •  how about we get any "democrats" (2+ / 0-)
    Recommended by:
    Mr Robert, trumpeter

    to stop talking about ANY changes to earned benefits until all other spending is cut like defense, oil and farm subsidies, corporate tax loopholes and allow US to negotiate drug prices.

    cut defense 30%, eliminate subsidies and corporate loop holes and allow drug price negotiation is$379 billion a year and $3.79 trillion over ten years.

    and please spare me "we" have to give "them" something so they will give us something. "they" have been getting for 30 years and when CPI could mean $1700 a year in benefit cut, while the wealthy stay wealthy, all I can say to that is fuck anyone that thinks of doing so.

    mittens=edsel. no matter how much money is spent to promote it, if the product sucks, no one will buy it.

    by wewantthetruth on Fri Jan 04, 2013 at 01:02:36 PM PST

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