Payroll tax cuts heating up.

The chances of the employee portion of the payroll tax being cut for the rest of the year is pretty good. However, from now until February 29, 2012, there will be much discussion and arguing about this topic. Threats, back and forth banter, Democrats Vs. GOP, etc…

In the end, the tax will remain at 4.2%, but what else will be thrown in or pig tailed onto the bill? Will unemployment be extended? Will solutions to paying for the decrease in taxes be covered? Currently, the first time home buyer is footing the bill. Typically, the first timers will require a FHA loan and the decrease in payroll taxes is being offset by the increase in mortgage insurance. Mortgage insurance is required in all FHA loans.

Will discussion be introduced again about reducing the employer’s side of the payroll tax? If done properly, could stimulate the workforce by hiring more employees and possibly making a dent in the unemployment percentage. Although, we all know how skewed the unemployment/underemployment percentage rate can be.

The key though, is to give employer’s a chance, especially the small business owner. Employee’s have had this tax reduction for over a year, and has it helped?

Would giving the employer’s a chance at reduced payroll tax rates help more people out with the possible hiring more employees? Or has this economy with the do more with less mentality enable the employer’s to just pocket the savings?

The latter mentality can not hold on forever, and many employees are taking note of their treatment during this uneasy time. At some point, even the most enduring and powerful succumb to the constant pressure of stress. The nature of competition and the realization that companies biggest assets are their employees will undoubtedly win out.