What am I missing with the payroll tax increase?

[zxrst]

$300 a month might not be that much but if you can put the money in a mutual fund like Fidelity index 500, which averages 9.5% return yearly since inception, you would have had $610K in 30 years! Even if you take a more modest return (6%), you would still come out with $310K.

The other problem with all these tax increase is that the cutoff brackets are not inflation-ajustable. A 60K job in 1992 would pay you 100K right now based on the inflation adjusted buying power. Majority of the middle class families would cross the top bracket in the next 20-30 years.

[rsschneck]

Originally Posted by DisneyATlast

If it doesn't apply to you then I don't know how it would be offensive. Obviously not all or even most rich people are greedy, but if you are rich and greedy then I think it's a pretty fitting and funny saying.

I'm not a minority but racism offends me. I'm not gay but anti-gay comments offend me. People in glass houses should not throw stones. You are making a huge accusation about people that you don't know and that is offensive.

[DisneyATlast]

I don't really care if someone who is rich and greedy to the point that they feel they should be exempt from taxes is offended.

[diz4ever]

Originally Posted by DisneyATlast

Are you surprised that people who make the most are the ones complaining?

And it's not only those that make the most are the ones complaining. A lot of people forgot that the 2% was temporary and that along with increased health costs hits everyone. You tend to make sweeping generalizations which is offensive whether its about "rich people" or any other portion of society.

[vacationer1954]

Tax brackets and other features of the tax code are indexed to the Consumer Price Index.

[bdcp]

Originally Posted by preschoolmom

Who says that?

I agree. Not true. Most wealthy people are very generous. Just because they're not giving to the poster you quoted doesn't mean they're not giving. I see it.

We are a two income household who is "losing" $300/month. DH hits the threshold every year. I do not. We live in a high cost of living area. Here's the example I give: If we lived in Omaha and make what we make, we'd be living like we were wealthy compared to our neighbors. We live in the DC area, so while we live well, we are not living like that. What we have took years to get to. We're 52 and 55. Of course, people forget age, education, work experience all figure into salaries. We haven' always made that much. In fact, I was a SAHM mom for 14 years living on a very tight budget.

Fortunately, with us both working, we have a cushion and while we see the $300 less/mo, we really don't feel it. Now, if we were living on DH's salary alone, the $200/mo that would be coming out of his salary would be noticed a lot more. We do our best to live on his salary and play/save mine.

[DawnM]

If the cap is $113,000, then the most people will pay is $188.33 per month more, correct?

People are reporting more than that and saying they are seeing $300-$800 taken out of their checks.

There is something wrong then if you are seeing more than that amount taken out.

My husband is an accountant. He is on a backpacking trip in the mountains at the moment without cell service or I would ask him about it.

But I am not quite understanding those of you reporting higher numbers than should be taken out. There is something not right.

[thedonduck]

Originally Posted by DawnM

If the cap is $113,000, then the most people will pay is $188.33 per month more, correct?

People are reporting more than that and saying they are seeing $300-$800 taken out of their checks.

There is something wrong then if you are seeing more than that amount taken out.

My husband is an accountant. He is on a backpacking trip in the mountains at the moment without cell service or I would ask him about it.

But I am not quite understanding those of you reporting higher numbers than should be taken out. There is something not right.

I think people are adding in cost of healthcare going up, etc. for the amount. Just my guess.

[Marionnette]

Originally Posted by DawnM

If the cap is $113,000, then the most people will pay is $188.33 per month more, correct?

People are reporting more than that and saying they are seeing $300-$800 taken out of their checks.

There is something wrong then if you are seeing more than that amount taken out.

My husband is an accountant. He is on a backpacking trip in the mountains at the moment without cell service or I would ask him about it.

But I am not quite understanding those of you reporting higher numbers than should be taken out. There is something not right.

For people who earn more than $113K annually, their SS tax will be at a rate of 6.2% until they reach a point where they have paid approx. $7K into the fund for the year. After that, their SS deductions go to 0% for the remainder of the year.

The Medicare payroll tax has no income cap. So that amount remains constant throughout the year. It only increases if the amount of the paycheck increase, such as when you work overtime or get a bonus.

[vacationer1954]

Originally Posted by DawnM

If the cap is $113,000, then the most people will pay is $188.33 per month more, correct? People are reporting more than that and saying they are seeing $300-$800 taken out of their checks.

This might be happening because people are comparing their first paycheck of this year to their last paycheck of last year when they hit the limit and therefore paid much lower SS tax as a result. If they would go back on more paycheck they'd see the mistake they made in the comparison.

[ilovemk76]

Originally Posted by DawnM

If the cap is $113,000, then the most people will pay is $188.33 per month more, correct?

People are reporting more than that and saying they are seeing $300-$800 taken out of their checks.

There is something wrong then if you are seeing more than that amount taken out.

My husband is an accountant. He is on a backpacking trip in the mountains at the moment without cell service or I would ask him about it.

But I am not quite understanding those of you reporting higher numbers than should be taken out. There is something not right.

If they made exactly that amount of money then you are correct or is you average the number out over the year. If they made twice that number then they would lose 2x$188 for the first 6 months and then the second six months they would lose $0.

[nunzia]

Originally Posted by DisneyATlast

Are you surprised that people who make the most are the ones complaining?

If you are referring to the other big thread on this I didn't see big earners complaining (an I'm not a big earner). The OP of that thread asked about budgets with the tax holiday coming to an end and people were just sharing how much less their checks were..and yes, many also mentioned pay freezes, medical going up, etc. The only complaining I noticed were people who were surprised that folks seemed caught off guard by this since the 2% SS witholding was always meant to be temporary and news of it coming to an end was everywhere for those who pay attention.

[nunzia]

Originally Posted by snarlingcoyote

I wish the government had never given us a tax break, to be honest. I keep hearing people grumble about it as though they had never paid payroll taxes at this rate in their entire lives. It was supposed to be a short-term thing to stimulate the economy. What part of that did people miss?

I'm also in the camp of being offended by certain snarky comments about 'rich' people. I work at a non profit and see those folks being beyond generous with both their money and their time.

[DawnM]

I see. Well, it still couldn't be $800 per month, unless as a PP suggested, they are including health insurance increases.

Dawn

Originally Posted by ilovemk76

If they made exactly that amount of money then you are correct or is you average the number out over the year. If they made twice that number then they would lose 2x$188 for the first 6 months and then the second six months they would lose $0.

[DawnM]

I haven't seen ANYONE rich and greedy here.

Several of your posts do across as offensive as they label people. I don't understand the need to do this.

Dawn

Originally Posted by DisneyATlast

I don't really care if someone who is rich and greedy to the point that they feel they should be exempt from taxes is offended.