Thursday, January 3, 2013
Payroll taxes are taxes, too.
It was a popular Republican meme that half of Americans don't pay taxes. Mitt Romney picked up on that when he made his infamous comments about the 47%. But the truth is, people still pay taxes, even if they're not paying income taxes. People are still paying payroll taxes. With the fiscal cliff being decided or whatever clever phrase you want to use, and the focus of the tax cuts expiring focusing on top-income earners, payroll taxes are, again, not being mentioned. President Barack Obama cut the payroll tax rate from 6.2% to 4.2 % in 2010 as part of a stimulus deal. But these taxes are set to expire. While the payroll tax cut was not supposed to be permanent, this tax increase will affect a number of Americans. While Barack Obama has repeatedly stated that he wanted to prevent a tax increase on the middle class and has said that middle class families will not see their income taxes increase. While this is technically true, the payroll taxes will increase. Payroll taxes are taxes, too. President Obama is playing a politician's game by focusing on income taxes instead of all taxes.