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If payroll tax cuts are not extended for next year how iwll that affect you?

3K views 29 replies 15 participants last post by  miss_cas 
#1 ·
We were watching pbs news last night.
They were mentioning the tax cut have not been full extended. They also said that the average amount would be around $40 a week that would start coming back out of the check each week.

They then mentioned how people said it would affect them. Hubby and I exchanged looks of stress. I did not hear what the answers were.

But Buddy started saying about giving up eating and giggled. I said "it is not a laughing matter for some it might mean that, to an extent". He said "I know". I guess he was listening to the answers come gave on the news program.

So how would that affect your wallet?

I'm a bit nervous to think about what it would mean to ours especially with our health insurance going up this year.
 
#2 ·
Well. At about $2080. That looks like it will nicely eat the $2600. we are helping DD w/ Community College. And seeing we can't write off anymore after this year,and she can't find a job to save her soul. Well,that just sucks! I already have the other one taking out loans from now on. Community college may require loans for us-so sad.
 
#4 ·
Well. At about $2080. That looks like it will nicely eat the $2600. we are helping DD w/ Community College. And seeing we can't write off anymore after this year,and she can't find a job to save her soul. Well,that just sucks! I already have the other one taking out loans from now on. Community college may require loans for us-so sad.
When you put it like that, well, then holy moly. :censor: That would pay off almost half of my remaining car loan.
 
#3 ·
I'm not sure of Buddy's age, but sometimes kids don't know how to respond to frightening things so they act inappropriately. I remember being told that my aunt's house burnt down and I laughed. Not because it was funny, but because I didn't know what else to say/do.

It wouldn't have to much of an impact on our budget right now, but when school is out and both kids are in daycare again, it would certainly be helpful to have the 40 extra per pay period.
 
#6 ·
If you make $106,000/year (the max amount of your income subject to SS/Medicare/Medicaid tax) then the 2% equals $2120 per year. Broken down into 52 weeks a year it is approximately $37.86/week.

If you make $50,000/year it breaks down to approximately $19.23/week.

I find it odd that PBS gave the $40 example , which would be the max amount "extra" any one person would pay. (I put extra in quotes because the rate would revert back to orginal rate it was prior to the one year holiday.)

They should have explained how the weekly amount was figured out or given examples from all income ranges. There is no need to scare people or make them think they are going to pay more than they will in reality. Really, does PBS think people need even more stress added to their lives? Good grief.

I am not trying to minimalize the impact of $20 (every bit helps is what frugal village has taught me), but I would think owing $20 sounds a lot better to most than $40!
 
#13 ·
I find it odd that PBS gave the $40 example , which would be the max amount "extra" any one person would pay. (I put extra in quotes because the rate would revert back to orginal rate it was prior to the one year holiday.)

They should have explained how the weekly amount was figured out or given examples from all income ranges. There is no need to scare people or make them think they are going to pay more than they will in reality. Really, does PBS think people need even more stress added to their lives? Good grief.
They were actually talking about the Whitehouse asking the American people "What does $40 a paycheck mean for you and your family?" They then went on to mention the payroll tax as well as other incentive and unemployment that are due to expire at the end of the year.

http://www.whitehouse.gov/blog

Here is another article about the question
White House asks what $40 dollars means to you - CNN.com
 
#7 ·
That's funny, because the breakdown I saw this morning said that it was $50,000 for $40. They had breakdowns of higher and lower income brackets also, but I glazed over.

I wish they'd stop all this bickering and just extend the tax cuts already. "For everyone to whom much is given, of him shall much be required." -- Luke 12:48. I think the ones (the elected) that love to spout Christian values when it benefits them need to be reminded of this verse.
 
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#8 ·
Honestly, it didn't affect us too much to have it in our checks, so it won't affect us too much to not have it in our checks. I'd rather have social security more secure for those who truly need it than the extra $40 a week (we do make over $106,000 combined).
 
#10 ·
#11 ·
The lack of extension of payroll tax cuts is, essentially, a good thing.

It may not seem like it, but trust me, it is.

With 53% of Americans paying income tax, the money has to come from somewhere. The government cannot keep pulling money from sources that are lacking funds in the first place. This causes the US Treasury to print more money and as such, the value of the dollar continues to plummet (along with its performance on world markets and such).

When the government has to print more money, thus decreasing its value, the price of goods goes up to recouperate that loss.

An increase of even $20 a week will do a world of good to help keep the government running at least better than it was.

So logically, the payroll tax extension is a bad, bad thing for finances for everyone... including the government.
 
#12 ·
mmmm....

Now that i think about it, it would be $40 every PAY PERIOD, not week if you make $50k. That might be where the discrepency is. Some us are talking about weeks, some pay periods.

Either way, at this point SS is massively underfunded, and IMHO the "holiday" should never have been given in the first place.
 
#14 ·
We've only gotten about 40 a month. Where is this money coming from? Doesn't take away from medicare and SSI ?? I say ditch the 40 dollars and start working on paying off that 15 trillion dollars debt the country has. This is just another distraction from our government so we won't see the mess we are really in.
 
#15 ·
Hmmm...My bad. I mistakenly believed the money from this tax cut was being funded from elsewhere.

This was a Bush thing, huh? and now supported by Dems. I have to wonder what the vote for this looked then.
 
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#16 ·
I think the Bush cuts were different than the payroll tax cut.

"What is the payroll tax?

The Social Security payroll tax is normally a 6.2% levy that comes out of every working American’s paycheck. (That’s roughly 160 million people.) The money helps fund the popular programs Social Security and Medicare. The tax is capped once you earn $106,000."

What is the payroll tax cut extension? GOP-led Housespam! It is better fried than typedrejects Senate-passed billspam! It is better fried than typed - NY Daily News

Bush cuts are do to expire soon to are they not?

"Bush-era tax cuts: If Congress does nothing, the 2001, 2003 and 2006 tax cuts will expire at the end of December 2012.

If they do expire, most Americans' tax bills would go up and the surge of additional revenue into federal coffers would greatly improve the deficit picture over the next decade.

But many worry the overnight jump in taxes could hurt the economy if it's still weak. And others say higher rates across the board is not the most efficient way of reducing deficits.

In any case, most Republicans want to make the tax cuts permanent while many Democrats want to make them permanent for everyone except high-income households."

Bush tax cuts: The real endgame - Nov. 28, 2011
 
#19 ·
Distractions. Your government is stealing from you every time they expand the money supply, and that same system is what allows our government to go into so much debt in the first place. None of this matters beyond the fact that these people are incompetent.
 
#20 ·
I am a single school teacher. I make about 45k and some change.

$80 per month would be really tough for me because I run an entire household on just my income.

I have no idea what I'd cut. I don't have cable television, don't go on vacations I have to pay for (only travel with professional grants and student trips to Europe) have a $0 budget for entertainment and have recently been thinking about how I could cut my food budget. I think I'm already so naturally frugal with food (rarely throw any food away, cook only once or 2x per week and eat the same thing night after night and already make most of my food from scratch and use low cost house brands and cheaper name brands) that I really couldn't cut my food budget. I can't cut my cell phone as it's the only phone I have and I already have a pay as you go plan for $30 per month. I can't imagine where I'd find a cheaper plan and $5 saved on cell phone monthly is a far cry from $80 EVERY month.

Seriously, I don't know how I'd be able to absorb this. I could probably cut the only thing I spend any money on--my clothing and hair. I've already begun stretching my once every 2 months trip to the hairdresser for a highlight to once every 3 months. I can only go so long and the roots start to distract my students.

I simply don't know what I'll do.

It would really be great if this thread could evolve into any hidden hints for cutting spending anyone out there knows--beyond the standards that most frugal people employ anyway.

I got nothing here, though.
 
#22 ·
Welll it's not going to hurt us substainsially but I am thinking about how many groceries I can buy for $80 using coupons... and for us with a 2 income household I guess it would be $160 per month (if I am understanding correctly...)
 
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#23 ·
#26 ·
I have a really good example that would go with this:

Last year, DH made $43,484. This year? $30,800. Yeah, that's a while $12,600 less.

Last year, I brought in about $475 per month for my military pension, along with $233 per month for the kids' tax credit. This year, the only thing that saw any increase was the tax credit but only because we claimed deductions for moving expenses in December 2010. That was effective July 2011 and was about $569 a month.

But we're living with almost twice a mortgage payment, almost twice a utility bill, etc. We're still making ends meet.

What are we doing to trim areas?

1) Cutting the cable down.
2) Cutting back on personal expenses such as hairdressers (I don't color my hair at all now), clothing, etc.
3) DH quit smoking (this has been three weeks now, but he's still spending in terms of cravings -- significantly less and won't be permanent).
4) Looking at buying out our cell phone contracts when taxes arrive and moving down to a pay-as-you-go on both of them.
5) Cutting the food budget by a lot. We already cut enough as it is.

People think "Well crap, if there's a payroll tax break loss and we end up paying more per month, where are we going to cut next?".

It's easy:

For us, it means going back to work at a job that makes more than we get currently as far as tax credits are concerned. That means I'd have to get a job that makes $800 + $600 + extra $$. The $800 per month is for daycare (yeah...), the $600 is the tax credit and then the extra on top of that would be for savings or whatever else.

So if it came down to that and we didn't know what we could do to further trim, we'd look at what we can do to add to it. If it meant getting a second job, so be it. If it means moving to a neighborhood or city where the jobs were more bountiful and paid better, then so be it.

Gone are the days where you can hold the same job for 20+ years and expect to live within your means with the changing economy.
 
#27 ·
According to our local news channel this evening, the lawmakers have extended this out 2 months. So no change for awhile.
 
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#30 ·
If you're on Social Security disability, you should wonder. These cuts will affect how much SSDI will be able to pay out. Govt has said # of new SSDI claims of somewhat challenged older workers have increased as no one will hire them after they were attritioned out. New outlook has SSDI needing to cut payouts by 2015. In 2011, the payin for SSDI was reduced due to the payroll tax cut. This has me concerned as does my loss of the medicare part B? discount in 4 years -- $1350 SSDI paying $750 monthly for 80/20 Medicare with deductibles and expensive RX copays won't be possible living independently. I'm getting more education, reducing my emotional burdens, useless demands on my time and planning to work full-time within 3 years.

I have decided returning to the working world and slaving to get myself out of debt and finances back into a good state would serve me better than ever voting again or watching any national news coverage with so many overstatements for dramatic effect. It just makes me sick.
 
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