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SS tax cut cuts pay

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intellectualammo
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From this article:

http://minnesota.cbslocal.com/2013/01/03/social-security-tax-cut-means-a-cut-from-your-paycheck/

Lots of people might be surprised when they open their first paycheck of the year. The end of the 2-year break on social security payroll taxes means we’re all going to have to pay a little more to Uncle Sam.

You mean, Uncle Sam will be holding a governmental gun aimed at our income, demanding more from it.

Lawmakers did finally make a deal to avoid going over the so-called Fiscal Cliff, but it did come with some consequences.

The deal ends a 2 percent tax cut on Social Security which means we’ll all see our paychecks get a little bit smaller.

If you make $50,000 a year, you’ll see about $1,000 come out of your paycheck each year. If you make $75,000, you’ll lose about 1,500 every year.

Edited by intellectualammo
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You mean, Uncle Sam will be holding a governmental gun aimed at our income, demanding more from it.
The problem is that voters don't want to get rid of social security. Further, even though voters know the scheme -- as written -- will not be able to pay them back what is promised, they are still loathe to change it.
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  • 2 weeks later...

The problem is that voters don't want to get rid of social security. Further, even though voters know the scheme -- as written -- will not be able to pay them back what is promised, they are still loathe to change it.

The new rate affects me double because I'm self employed and pay both ends. I'll be happy if I get back a dime on the dollar.

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Average wage earners will not even notice the difference.
Even if they don't notice a difference, the question is: will they spend a little less each week? People who spend on something like a cash basis (i.e. looking at their current cash/bank account and when they'll get their next paycheck) will cut back by not spending that 2% that they otherwise would have had. Others, who are more aware and have more forward-looking budgets will realize that they are going to have $1000 - $2000 less for the year, and may well cut something out of their budget. Overall, there is likely to be some reduction in aggregate demand.
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Even if they don't notice a difference, the question is: will they spend a little less each week? People who spend on something like a cash basis (i.e. looking at their current cash/bank account and when they'll get their next paycheck) will cut back by not spending that 2% that they otherwise would have had. Others, who are more aware and have more forward-looking budgets will realize that they are going to have $1000 - $2000 less for the year, and may well cut something out of their budget. Overall, there is likely to be some reduction in aggregate demand.

The failure to understand what you just described is truly epidemic. It is just one example of the broader failure to understand the moral law that actions always have consequences.

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Even if they don't notice a difference, the question is: will they spend a little less each week? People who spend on something like a cash basis (i.e. looking at their current cash/bank account and when they'll get their next paycheck) will cut back by not spending that 2% that they otherwise would have had. Others, who are more aware and have more forward-looking budgets will realize that they are going to have $1000 - $2000 less for the year, and may well cut something out of their budget. Overall, there is likely to be some reduction in aggregate demand.

I didn't mean to suggest any or no effect on aggregate spending. I was more pointing to the idea that most wage earners more likely than not ,will not understand that the rate changed(back).

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Causality is not a moral law though. It's metaphysics.

Really? Anyone can prove that moral law for themselves by their own direct personal experience. Do something which you know is morally wrong and then try to escape the consequences you set into motion by your own actions.

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Yeah, me too.

I'm not complaining though... :)

... as this certainly is not the first time that businesses expenses have increased, and it won't be the last. All costs simply get passed on to the end user just as they get passed on to me when I'm an end user of others' products and services. This is why it's important to be able to operate on both sides of the ledger at the same time. This establishes parity between production and consumption so that you consistently prosper regardless of any political or economic cycles. The only variable is the amount of dollars used for both.

Edited by moralist
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I'm already thinking of ways to reduce spending to compensate for it. Since I am a janitor, I do feel it. Especially if it cuts into my Nike Air Max shoe money for the year. That will hurt. My feet. But I just bought a pair last month so they should last for a while. Plus I started wearing cologne, like Tim McGraw SOUL2SOUL and Nautica Voyage, and have already stopped wearing them regularly.

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I'm not complaining though... :)

... as this certainly is not the first time that businesses expenses have increased, and it won't be the last. All costs simply get passed on to the end user just as they get passed on to me when I'm an end user of others' products and services. This is why it's important to be able to operate on both sides of the ledger at the same time. This establishes parity between production and consumption so that you consistently prosper regardless of any political or economic cycles. The only variable is the amount of dollars used for both.

I'm complaining!

To quote Conrad from A Man In Full:

This is not OK

This is not RIGHT

Nonetheless, I hear ya.

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I'm already thinking of ways to reduce spending to compensate for it. Since I am a janitor, I do feel it.

A lot of people are going to feel it, too. The government granted benefit of one group always comes at the detriment of another.

My Dad was a self employed janitor and paid both ends of social security for decades. Sometimes it can be hard work, but it's a good business.

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I'm complaining!

To quote Conrad from A Man In Full:

This is not OK

This is not RIGHT

Nonetheless, I hear ya.

I was forced to face the fact that I have absolutely no control over governmental policies because the government does not represent my values. But I do have control over how I respond to those governmental policies. So the only way out was to find a personal approach to resolve them. And the only way I found is to become a Capitalist producer.

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