A one-year extension of the employee-side payroll tax cut was passed in December of 2011. It's scheduled to lapse along with the other fiscal cliff policies in 2012. This is a particularly popular tax cut because it goes by and large...
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You realize that GWB's idea would have increased the size of Social Security and expanded its revenue reach. He would let you invest part of your money and pay something to Social Security. What GWB didn't advertise well is that lowering the inflow into Social Security would have required an increase in income taxes to pay for what wasn't going to SS. So he lowered your payroll taxes and increased your income taxes. The difference is that payroll taxes are capped where as income taxes aren't. In 2033, Social Security has hard forced cuts. Once SS could dip into the general fund, it is a bottomless pit.
The coming fiscal cliff's mix of tax hikes and spending cuts are projected to seriously hamper economic growth over the next two years, and Congressional leaders would be wise to negotiate fixes for the problems. One of the more popular potential fixes, however, is only going to hasten the coming entitlement crisis by worsening the finances of Social Security.
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