the whole point of the payroll tax holiday is that the low income don't earn enough to pay income taxes thus income tax cuts won't work to put money in their pockets.

I would have went with a one time check or alike. Doing it the way it was done was bound to end badly in my opinion.

an economy is slow release of money to people that will spend it. So, the way the plan was set up was the best way, and the method DID improve the economy rather dramatically.

The issue that must be address is permanent change to tax policy to make it fair. as as far as the payroll tax is concerned, everyone must pay in and there shouldn't be a cap. People that make less than $100,000 per year should have their rate permanently reduced to 4.2%. Rate for people above $100,000 should pay rates that start at 4.2% and decrease - BUT - they will pay that rate all year. The effect of the tax policy will be that high income people pay more in, but feel little impact of each payment, for example, a person making $500,000 per year now pay in $6200 per year and stops paying in during the first or second quarter of the year, but if that person paid a rate of 1.5% for all year, the Social Security fund would collect $1300 more per year from the high income person and the high income person wouldn't feel any impact from paying in more money - $1 million dollar per year earners would have even lower rates, but due to paying in all year, will pay in more over a year than the $6200 that they now pay in.

indicated the best way to stimulate the economy was through a one shot rebate like program, however your historical data indicates the slow release method to be better.

One must then infer that it depends upon which historical data in which one finds themselves in agreement.

that the best way to increase inequality is to give more money to the richest 20% than you give to the poorest 60%.

And the accursed payroll tax credit certainly did that.

Did it boost the economy? Other things could have done just as well - or better, without being so unequal. For example, the making work pay credit cost $57 billion and gave $42 billion in stimulus (or was predicted to) whereas the accursed payroll tax holiday cost $112 billion and only gave $60 billion in stimulus. That's not very good bang for the buck. http://www.ctj.org/pdf/taxcompromise2010.pdf

It's a flat tax. It makes no sense to condemn the tax break without condemning the tax. And you're fixing your numbers again. You need to quit doing that. The tax stops at $114,000. So the top incomes don't even pay the payroll tax.

Other things "could have been done" is meaningless. This is what was done. You didn't want it done because you value Social Security over tax breaks for the poor. It's okay. That's your right, but dishonest stats don't help your case.

tax breaks for the poor over tax breaks to the rich

and the accursed payroll tax cut is a tax break for the rich

you still cannot figure out that 2% of $114,000 is far, far more than 2% of $14,000.

(hint: one of them is $2,280 and the other is $280)

That other things could have done is very meaningful because other things might have been tax breaks for the poor. The accursed payroll tax cut was done though, because it is a tax break for the rich.

It gave $52 billion to the richest 20% and only $30.4 billion to the bottom 60%.

I don't understand how people can not see that as a tax break for the rich. I guess a bunch of lies from politicians and the mass media mean more to some people than basic math.

Historical data actually shows that the best way to boost an economy in a meaningful fashion is government spending, not tax cuts of any sort.

Here's why.

Government spending has two important features: it's done in the private sector, and they spend large amounts of money in one place.

If we were to take $10 billion and spread it out among the people who filed the approximately 144 million tax returns submitted in 2012, each taxpayer would receive about $70. You can't do anything really interesting with seventy bucks. And I will admit, it will look great in the paper: "Spending goes up by $10 billion in 2Q2013!!!" Until you realize half the money was spent paying credit card bills and the other half went to about five million different stores...

This would be like punching you in the face with 100 foot-pounds of thrust, but doing it in thousands of two-ounce taps. Eventually the person punching you will get bored and leave.

The government, OTOH, has no problem with figuring out ways to spend the $10 billion in two or three different places even if they didn't give it to the Navy. If HHS was given $10 billion to spend on new cars they won't go to every car store in America and buy two at each, they'll go to Ford and tell 'em, "we want $10 billion worth of Tauruses delivered in the next six months." Ford will then have to add another shift at the Taurus factory to fill the order in the time allowed...which means jobs at the Taurus factory, jobs at a tire plant, jobs at the paint factory, jobs with the trucking companies that haul windshields and seats...

This is like punching you in the face with the same amount of thrust, but doing it with the end of a half-inch dowel. You'd probably leave a hole doing it like that.

That's an extravagance not seen here in years, even with the payroll tax holiday.

while money left in the hands of the wealthy does nothing.

the accursed payroll tax holiday did NOT put money into the hands of the poor - it put money into the hands of the rich.

As I tire of pointing out.

cost $112 billion

distribution

top 1% - $3.4 billion
top 4% - $12.4 billion
next 5% - $14 billion

total top 10% - $29.9 billion

next 10% - $22 billion

total top 20% - $52 billion

bottom 20% - $4.3 billion
next 20% - $9.3 billion

total bottom 40% - $13.6 billion

what bottom 40% got from the making work pay credit (which was replaced by the accursed payroll tax holiday) - $16.5 billion
what top 20% got from the making work pay credit - $13.3 billion

increasing the making work pay credit by $200 (or 50%) would have
a. cost less ($85.5 billion compared to $112 billion)
b. reduced inequality rather than increasing it
c. stimulated the economy more

But it's all good, because Obama (and the Democratic Party) saved the "middle class" tax cuts along with giving us the accursed payroll tax holiday.

That it gave $163 billion a year in tax cuts to the richest 5% is just icing on the cake. http://www.ctj.org/pdf/taxcompromise2010.pdf

as soon as it went away the poor and middle class had to quit spending while the rich did nothing.

lower classes keep is immediately put back into the economy?

but it will come back to haunt us in 2014 and maybe in 2016, particularly if jobs and compensation remain stagnant.

I have not see one of those people comment in this thread. Face it, we are a nation of people that fight for their own limited self interests and regardless of what some claim, they don't give a shit about other people. It was clear to me that poor people would be hurt once the holiday was ended. I have capped out for every one of my earning years, I benefit from the system as it is now, but I would gladly give up the cap and pay in more as long as I get a reasonable rate to pay in at.

The key is to insist that the cap be eliminated, but in doing that, our side must recognize that it would be vastly unfair for a person earning a million dollars to be forced to pay 4.2% all year, that person paying in a 1% rate all year would generate over $3000 more for the Social Security Trust Fund than is now paid in and the additional payment would more than offset lower payments from low income people. I am all for tax fairness and forcing high earners to pay their fair share, I am not for punishing a person because that person has had some financial success in life.

never hurt for money in their old age, and they think the same of those around them now.

I realize that it is difficult to get progressive measures through Congress, but at least talking about progressive ideas is the first step to getting things done.

Unfortunately, too many in the Administration and Congress right now cannot conceive of anyone they care about needing that pay out.

My $$ view of fairness is a little more generous than yours, though.

Once your income passes a certain level you can ask to be paid in any currency you want. Seriously rich people take almost all of it in stock options...Steve Jobs at Apple, who took $1 per year cash and the rest in ISOs, was the most notorious. Those work as follows: executive receives a paper entitling him to buy x shares at y price...say, 1 million shares at $25. The law doesn't force correlation of exercise price to option price, so the stock could be trading at $250 when the options are exercised. He then has two waiting periods: two years from the date the certificate was issued and one from the date it was exercised. Once both have passed, he can sell the stock and the tax is 15 percent of the gain over the exercise price.

It is not monumentally unfair to ask a millionaire to pay less than five percent "payroll tax" on his income, it.is monumentally unfair to ask the rest of us to accept that millionaires only pay 15 percent tax.

And no, this is not punishing success. It is following the Biblical instruction to ask more of those who have more. The reason you ask more is they use more...rich guys use the highways, water and sewer systems, government inspectors and safety standards, tourism promotion agencies, customs service, public schools and hundreds of other government services to make money. They can help pay for those things.

is to be pitied?
Sorry,not going to shed a tear as the system gets undone and those that need it are screwed.

No shit.

Make no mistake: the FICA holiday was pure government spending: the shortfall to the Social Security fund was paid off from general accounts.

I'm paid once a month and almost called payroll thinking they'd made a mistake on my check, and then remembered and did the math. Ouch.

I got a 2% cola raise last year, but between a rent hike, my storage space rent going up 20%, food prices going up, and now this, I might as well have just rolled up a ball of Kleenex and thrown it into a fire.

So my 1.2% raise last year was erased because they raised the payroll tax back up. My rent did not go down (thankfully, it did not go up either.) Things are tough for me and worse probably for many others.

Starting with fucking low minimum wages, rising prices on everything, cuts to vital programs and it snowballs from there.

and working poor took yet another hit. It's basic math. If the government takes what little spare change you have, then you are no longer spending that spare change eating out or going to see movies, and when you don't eat out or go to the movies, the restaurant and theater owner have to lay off employees.

This couldn't have happened at a worse time, with the economy still teetering on the ledge. Oh and for anyone confused about what bombing people in the middle east does to our economy... It raises oil prices, when oil goes up you get a lot less gas in your tank. With a lot less gas it costs you more money to deliver your eggs to the market, you're forced to raise your prices, when you raise your prices, people can't afford to buy as many eggs or put as much gas in their car.

We're just doing all the right things.

Those people are barely making it. I know because a good number of them posted right here and said so. And if you want to know who was really cheering the end of this tax holiday for the poor, that's likely the place to look.

By maintaining the SS "holiday" that meant less money was being set aside for the future. While I know there are many here who don't think Social Security will be around when its their turn to collect (I felt the same way 30 plus years ago when I was in my 20s...it's still here and I'm rapidly reaching the age to start collecting) the money they're having to set aside today may be of greater use when they're older. In the meantime I know the tax hike bites...as others have pointed out, its always those with the least who always get hit the most, but the alternative is to let Social Security become massively underfunded (something the rushpublicans would love...just like the Post Office) and the self-fulfilling prophecy of no Social Security could be a reality.