It's being reported by the White House that without congressional approval, the Social Security payroll tax cut for 160 million workers would rise from 4.2% to 6.2% on January 1st. For one thing, it's 150 million, not 160 million.
The median individual income for Americans is $26,364 before taxes (75.2 million having income above that amount, and the other half (the bottom 50%) have income below that amount -- for a total of 150.4 million working Americans -- as reported by employers on W-2 forms in 2010. Source: Social Security Administration.
24.1 million (16 %) reported less than $5,000. I can't imagine living on this so for the sake of argument, I'll assume most are a teen or a spouse working a part-time job for supplemental income.
The majority of the work force (112.8 million, or 75%) reported $50,000 or less before taxes. At 4.2 percent on $50,000, one would pay $2,100 for Social Security taxes. If it goes back up to 6.2%, they would pay $3,100 -- a difference of $1,000 more (or $52 a week). The White House exaggerated this amount and reported: "For a typical family earning $50,000 a year, this cut would translate to an extra $1500 a year in their pockets."
But at the very most, the bottom 50% (those earning $26,364 or less a year) would only see their taxes go up $527 a year (or $10 a week). Yes, I know. When you're living at, or near poverty level, ten bucks is a lot of money. But the Republicans say these people should count themselves lucky because most of them have refrigerators and TVs. Comedian Jon Stewart addresses this in a very hilarious (and sarcastic) manner.
A new census record shows 1 in 2 people in America are now poor or low income. Just 7 percent of those who lost jobs after the financial crisis of 2008 have returned to or exceeded their previous financial position. This may be because in the past 10 years alone we've lost 56,000 factories and 8.2 million jobs (and they'll never be back).
But regarding the payroll tax: it is businesses who will benefit the most from the proposed extension of the payroll tax cut. Approximately 98 percent of businesses will see their payroll tax bill cut in half -- from 6.2% to 3.1% -- on their first $5 million in wages.
Workers benefit less, and the unemployed doesn't benefit at all.
Last year 81 Americans reported incomes of over $50 million, but they would only save $2,180 a year with their "payroll tax cut" because Social Security taxes for the wealthy are capped at $106,000. So either way, the wealthy benefit the most.
|
Annual incomes |
Number of people |
| People with annual incomes of over $1 million derived from wages reported on a W-2 form. Not counting those who only derive an income from capital gains in investments. Read this article: Rich Man Dispels Myth about Job Creators | |
| $1 million — 1,499,999.99 | 47,058 |
| $1.5 million — 1,999,999.99 | 17,624 |
| $2 million — 2,499,999.99 | 8,767 |
| $2.5 million — 2,999,999.99 | 5,094 |
| $3 million — 3,499,999.99 | 3,276 |
| $3.5 million — 3,999,999.99 | 2,296 |
| $4 million — 4,499,999.99 | 1,685 |
| $4.5 million — 4,999,999.99 | 1,221 |
| $5 million — 9,999,999.99 | 4,607 |
| $10 million — 19,999,999.99 | 1,537 |
| $20 million — 49,999,999.99 | 479 |
|
$50 million + (Forbes 400 List) |
81 |
|
Total Americans with annual wages above $1 million reported on W-2 forms - such as CEOs, lobbyists, bankers, hedge fund mangers, etc with "base" salaries (stock options are separate and called capital gains). |
93,725 Total |
While I can see that not raising taxes 2% on working people in a bad economy is a good thing, I don't see it as an national emergency. After all, they do have jobs. What should be even more emphasized is extending the funding for those who are still eligible to receive unemployment benefits. After all, they would have ZERO income, and wouldn't benefit from any tax cut at all.
7.4 million Americans are currently receiving either regular state or federal extended unemployment benefits (chart below*), and are also subject to federal income taxes (but not Social Security taxes). A total of 18 million Americans at one time received federal extended benefits (EUC).
But approximately 10 million have already exhausted all state and federal benefits -- and about 8.4 million of them are no longer counted in the unemployment rate (because after a certain time, the Bureau of Labor Statistics automatically labels them as "discouraged workers" and says they "dropped out of the work force").
But nobody is talking about "these people" any more. Once their unemployment benefits expire, they are forgotten and swept under the rug.
And 27 million unemployed Americans will not benefit at all from any amount of a Social Security tax cut, although about 75 million working Americans could use the extra $10 in their pocket.
Also: I read through the GOP's "jobs plan", and it's a joke. It accelerates a decision on the Keystone XL energy pipeline within 60 days. The proposed Keystone XL tar sands pipeline would carry oil from the Canadian tar sands across our country to ports and refineries along the Texas Gulf coast. From there it could be exported anywhere in the world. (Read how investment banks like Goldman Sachs manipulates the commodities markets for oil, etc. by speculation and raising prices.)
The Keystone XL project would provide, at most, 6,000 temporary construction jobs, very few of which would be local hires, according to an analysis performed by the U.S. State Department.
Cornell University's Global Labor Institute did its own evaluation, concluding that the project would employ between 2,500 and 4,650 construction workers. "Most jobs created will be temporary and non-local," the institute concluded in its report, appropriately titled, "Pipe Dreams?"
Even TransCanada, the Canadian pipeline company that wants to build the pipeline, has said it would only create "hundreds of permanent jobs. That's what TransCanada's vice president for pipelines, Robert Jones, told CNN a few weeks ago.
As far as cutting taxes for corporations (whether s single person incorporates themselves or the mammoth multi-national conglomerate called Wal-Mart) should be taxed at an effective tax rate of 25% like in China (no tax loopholes), because they enjoy "limited liability". Their tax rate would have to be ZERO (like many American corporations enjoy today) to many create jobs, but they still wouldn't create enough jobs because labor is so much cheaper overseas.
And smaller unincorporated businesses (private entrepreneurships who actually hire people) should be taxed much lower. That could really help create jobs. Read: Low Wages Kills Jobs, Not High Taxes
But either way, Social Security tax cuts does absolutely nothing to help the unemployed.
| * PERSONS CLAIMING UI BENEFITS IN ALL PROGRAMS | |
|
WEEK ENDING |
Nov. 26, 2011 |
|
Regular State |
3,685,651 |
|
Federal Employees (UCFE) |
30,893 |
|
Newly Discharged Veterans (UCX) |
44,325 |
|
EUC 2008 (Federal Extended Benefits) |
3,048,926 |
|
Extended Benefits (SEB) |
593,097 |
|
State Additional Benefits |
4,727 |
|
STC / Workshare |
41,888 |
| TOTAL | 7,449,507 |
|
Year-to-date was 9,192,067 - a difference of 1,742,560 |
|
My related posts:
No comments:
Post a Comment