It's apparent President Obama, the Senate and the Congress are still lying to the American People.
It’s a lie Social Security “Contributions” are in a “Trust Fund” and locked away for use in our retirement years. Let's do some math and tell the truth.
Prior to 2011, the breakdown for a $10 per hour worker for taxes and withholding was:
Fed Income Tax: 12 percent = $1.20 per hour from the employee's pay
State Income Tax: 3 percent = .30 cents per hour
Social Security Contribution Rate: 6.2 percent = .62 cents per hour
Medicare Premium Contribution Rate: 1.45 percent = 14.5 cents per hour
This left the $10 per hour example employee with $7.735 per hour after the $2.265 deductions.
Then, the employer “matched” the employee's “Contribution” for FICA (Federal Insurance Contributions Act). So, $10 per hour in wages costs employers an average of $12.01.
Now, to address the lies told by President Obama, the Senate and Congress.
Social Security contributions are part of FICA is Insurance for retirement.
This reduction is not a tax decrease. The 2 percent reduction in the “contribution” by our $10 hourly example employee resulted in a .20 cents per hour increase in take home pay, but also resulted in a .20 cents per hour decrease in the amount of money being invested by that employee in Social Security. This defunds Social Security now, for political reasons that won't be answered for when those workers reach retirement age. The current politicians will have retired with their golden nest eggs funded, at taxpayer expense, and won't be held accountable.
We're lied to that it's a tax break, and that it's a “contribution” for our retirement under Social Security. Either way, we're being lied to. Don't forget Social Security is on the verge of bankruptcy.
The next lie told by President Obama, the Senate and Congress is this helps employers afford to increase hiring.
That lie is illuminated by noting the employers “Matching Contribution” wasn't reduced. Before and after the “Tax Break” was implemented, employers cost per employee per $10 in wages was $2.01.
The next outright lie is from President Obama, telling us Congress blocking the two month extension would cost the average American worker $1,000, or about $40 per paycheck. That math would work based on 26 pay periods per year, but it’s only extended two months. It still means less money for the average American’s Social Security.
Kevin Henderson, Halstead