As most people are aware by now the government decided to cut the employee portion of social security by 2%. This sounds like good news for employees (although long term this will be disastrous for Social Security). More money in our paychecks right?
Here is an example:
A paycheck of $1500 would have about $93 taken out for Social Security (FICA) in 2010. For 2011 the amount is reduced to $63, a savings of $30. Thank you Mr. President and Congressmen.
But wait. That isn't how much of a savings you'll have because the tax tables have changed. So let's look at that scenario.
Same $1500 paycheck (assume withholding of Married - 1 exemption). In 2010, about $5 would be withheld from your paycheck. For 2011 the tax tables show a withholding of $53 or a difference of $48.
So to recap. The government lowered your taxes by $30 then raised your taxes by $48 for a difference of a tax raise of $18!
Again, I say thank you for the wonderful tax cut Mr. President and Congressmen! I can't wait to not spend the $18 I won't have!
It is true what they say, the Republicans come up with some bad ideas and the Democrats somehow make them worse!