Ignorance is Bliss - Not!
Today is the 15th of the month. For some, it will be the first time they see their paycheck since their last one in 2012. Many who get paid on a weekly basis have already seen their first 2013 check. There have been numerous stories all over the media about the "shock and awe" of many when they saw their new paycheck amount. Many have been amazed by the new total. I have been amazed on how they did not see this coming.
First a bit of factual history. Two years ago, it was decided to cut the Payroll Tax withholding by 2%. This was never intended to be permanent - only temporary. Many (including myself) thought this was a bad idea from the get-go. The Payroll Tax, otherwise known as FICA (Federal Insurance Contributions Act), is THE funding vehicle for both Social Security and Medicare. The amount an employee pays into the system is 15.3% - half (7.65%) by the employer for each eligible employee and the other half (7.65%) taken directly out of the employee paycheck. For two years, the amount withheld out of each employee check was 5.65% instead of 7.65%. After being extended last year for an additional year, this reduction sunsetted at midnight on December 31, 2012 and the employee paycheck withholding went back to 7.65%.
The main reason I was against this Payroll Tax cut for two years is simple. It reduced the amount of revenue taken in for shakey Social Security and Medicare funds by over 13%. Here is the tough part. It is estimated this two year reduction in FICA cost Social Security and Medicare approximately $225B! How do we make up for that additional shortfall? A story for another day.
Back to the multitude of amazed workers. I am stunned that any person in this country could live a life so sheltered from all media sources they did not see this coming. It has been talked about for months - sometimes ad nauseam. Even though the final outcome of the fiscal cliff negotiations were not known until the last minute, it had been known for a long, long time the Payroll Tax cut was going to sunset.
Time to wake up folks. For those surprised by this unexpected "jolt", please use it as a wake up call. There are a multitude of huge issues coming down the pipe that will profoundly affect us all. Wake up, pay attention. This is of critical importance. If you want to stay in the Matrix, take the blue pill and go back to sleep. We will wake you up before the asteroid hits. If you want to help fix this mess, pop the red pill, get informed, and then lets get busy. We have work to do.
The main reason I was against this Payroll Tax cut for two years is simple. It reduced the amount of revenue taken in for shakey Social Security and Medicare funds by over 13%. Here is the tough part. It is estimated this two year reduction in FICA cost Social Security and Medicare approximately $225B! How do we make up for that additional shortfall? A story for another day.
Back to the multitude of amazed workers. I am stunned that any person in this country could live a life so sheltered from all media sources they did not see this coming. It has been talked about for months - sometimes ad nauseam. Even though the final outcome of the fiscal cliff negotiations were not known until the last minute, it had been known for a long, long time the Payroll Tax cut was going to sunset.
Time to wake up folks. For those surprised by this unexpected "jolt", please use it as a wake up call. There are a multitude of huge issues coming down the pipe that will profoundly affect us all. Wake up, pay attention. This is of critical importance. If you want to stay in the Matrix, take the blue pill and go back to sleep. We will wake you up before the asteroid hits. If you want to help fix this mess, pop the red pill, get informed, and then lets get busy. We have work to do.
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