Is President Obama's employee tax cut a real cut? Normally the Social Security tax withdrawn from your salary is 6.2 percent, while the employer matches the percentage.
Now, you pay 4 percent toward Social Security while the employer pays the full 6.2 percent. In other words, the president required you to take 2 percent from your Social Security savings account. He offered you nothing as your Social Security fund is reduced by that 2 percent.
It is no benefit to the employer, as he pays the same amount as he did before the alleged cut. He just gives you the 2 percent he would normally send to Social Security in addition to your now 4.2 percent contribution. That is why the policy had no effect on unemployment.
Yes, your take-home pay is an extra 2 percent, but it is taken from your Social Security savings. Whether we agree politically with the president, to call this a tax reduction is disingenuous. In tough economic times, rather than providing a real tax break that has gotten us out of past recessions, he forced you to rob your Social Security piggy bank. He then purports to protect Social Security as he robs from it by 2 percent per month per every employee so he can say he reduced taxes!
Bill Henshaw, OD, FCOVD