Monday, December 12, 2011

Payroll Tax Debate
United States of America

I may be uninformed, however I think that the Payroll Taxes our President and the U. S. Congress are debating is the same thing as the Federal Insurance Contributions Act (FICA) which is used to fund Social Security Payments. 

Now, before we proceed with this discussion I will inform you that I have been receiving Social Security Payments for eight years and ten months.

I remember that in the recent past our Elected Leaders decreased the amount of payment that an Employer and an Employee pay on their salary.  This decreased amount is set to expire at the end of 2011.  Recent discussion/debate between our president and the U. S. Congress has focused on the fact that this reduced level of payments should be extended to eliminate the impact of take home pay deductions for our Nation's Workers.

This may appear to be an appropriate means of spurring customer spending as the Country needs to spur economic growth.  Yes, it does sound good and our current elected leaders are now stating that failure to extend this reduced level of Payroll Taxes will have an estimated $1000.00 impact for each employee.  In short they will have $1000.00 to spend on customer goods which is reported as being necessary to improve our economy.

Please anticipate these current employees working to retirement and then depending on Social Security Payments to finance their life style.  I am confident that with decreased Payroll Taxes or FICA payments that soon it will be determined that Social Security Payments/Benefits will have to be decreased!!! 

What will happen then?  There will most likely be a dramatic downturn in the economy.  Yes, the short term benefit of continuing the current decreased Payroll Tax Deduction may allow economic growth; however what happens in ten, fifteen or twenty years when these same employees commence drawing reduced Social Security Benefits?

From my own point of view it appears that we are being set up for a vicious downward spiral of income for the very people who may now achieve short term benefits while they fail to anticipate the long term decrease in their own benefits.

Of course if you are a thinking person who can comprehend the "big picture" you will quickly realize that this is simply an opportunity for the current President to bolster his re-election chances.  No one will have to suffer any short term decrease in income if they will simply vote for him.  Thus the current debate is simply one that can be briefly stated as "an opportunity to buy the votes of the current electorate."

A sad situation indeed.  As I composed this entry today I recalled a story by Hans Christian Andersen entitled "The Emperor's New Clothes."

One summary of this story is that the Emperor's situation caused the adults to believe the Emperor was indeed clothed.  It took a child to say "But he isn't wearing anything at all!"

Is this the situation with the current debate regarding the Payroll Tax extension?  Only those who think of the long term consequences can actually see the true facts!!!  I hope not. 

Is it to late to contact your duly elected leaders?  I sincerely hope not. 

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