By Matt Rooney | The Save Jersey Blog
Why am I missed $30? $40? $50 of my usual total net pay?
The answer: November 6, 2012.
The technical explanation? Last week’s fiscal cliff deal did not include an extension of the federal payroll tax holiday, allowing the payroll tax rate to rise 4.2% to 6.2%. That means an employee earning $50,000 annually will now fork over approximately $1,000 more per year to Uncle Sam. Go ahead, liberals: try to tell me that WON’T carry negative repercussions for the economy next Christmas…
Federal payroll tax revenue funds the troubled Social Security benefits system. Just don’t labor under the delusion that this $40 per person adjustment “fixed” anything, Save Jerseyans. The numbers are staggering. To briefly summarize, the folks who administer Social Security (called “trustees”) have forecasted complete insolvency for the program beginning in 2033, at which time Social Security will only be able to pay out what it takes in via payroll taxes (because the trust bonds, and the interest from those bonds, will be exhausted due to the retiree boom and low interest rates), resulting in a 25% reduction in benefits.
And what’s the political explanation? When Obama won reelection on November 6th and the Senate stayed Democrat blue, any chance of real near-term entitlement reform died on the vine. How could it not? The President was reelected by a coalition that opinion poll after poll shows to be in FAVOR of the government “doing more.” Obama’s party mercilessly mocked Paul Ryan for even suggesting relatively modest changes to the program for future retirees. So when the time came to craft a fiscal cliff deal, Democrats took entitlement reform off the table. It’s that simple.
The bottom line?
If you’re one of the millennials who put Obama over the top in a battleground state, congratulations! You voted to raises taxes on yourself to fund a program that’s own experts don’t think will be available for your use.
Just don’t be too angry at yourself. Obama’s not lying about one thing: “voting is the best revenge.” Educate yourself and make an informed decision in 2014. Your paycheck depends on it.