What was intended to end in 2011, then today, will now be extended until the end of the year. Will the 2% reduction (for employees only) justify taking from an already faulted social security system? Is Peter robbing Paul by repaying the social security through FHA mortgage loans?
Actually as of right now there is no payback program in place. The offset of raising mortgage insurance was thrown out in the final payroll tax cut version. So was the “millionaire” tax. Something will obviously need to be introduced that will probably take decades to actually repay the lost social security revenues.
A case can be made that the social security system is in so much shamble that it needs a complete overhaul and this payroll tax reduction would not affect a regenerated system.
If so, why not give the small business employer a break too?
But for now employers, continue to only take out 4.2% for FICA taxes when your next payroll is due and of course the 6.2% that you contribute for each employee.
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