Dec. 26, 2011- PPM – It’s Not a Tax Cut

This week's PET PEEVE MONDAY (PPM) is the "EXTENDED TAX CUTS" that was just passed by Congress and signed by President Obama.

It extends for TWO MONTHS last year's tax cut extension deal made last December during the lame duck Congress included a new one-year FICA reduction of employee Social Security contributions from 6.2% percent to 4.2%. Employers still pay their 6.2% share.

In that deal, employees saw a 2% increase in their take home pay this year, just like getting a raise, up to a maximum of $2,136 for those making $106,800 or more. The average worker saw an increase in take-home pay of about $1,000 or $20 per week.

FICA stands for Federal Insurance Contributions Act. It came about as part of the creation of Social Security back in 1935. That deduction was designed to be put in the Social Security Trust Fund.

FICA really isn't a tax in the traditional sense of the word.

A payroll deduction into a 401k plan, for example, is not a tax. It's a personal contribution you make into a savings plan for your future retirement. So is FICA. It's not only a contribution to a savings plan for your future retirement but also helps pay for future medical needs after you retire.

So again, the government and Obama have tried to buy CURRENT votes by robbing our FUTURE.

It is NOT a tax cut, but a lower payment into your retirement.

But the real PEEVE is that the politicians could only agree on a TWO MONTH extension. Just like the DEBT CEILING debacle last summer, NO LONG TERM SOLUTION, just kick the old battered can a bit further down the road.

COWARDS.