It’s been one of the ironies surrounding President Obama’s struggling reelection campaign: Federal taxes for most wage earners have fallen during his administration–and many of them don’t even know it. That’s because those tax breaks came in the form of payroll tax reductions. Instead of getting a nice substantial check in the mail — remember the Bush tax rebates? — taxpayers might get, say, an extra $11.26 in their paychecks every two weeks, hardly the kind of stimulus that sends a family off to the mall with a rosy economic outlook.
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Which brings us to today’s topic: The Social Security payroll tax. Congress and the president cut the employee’s share of that tax from 6.2 percent of pretax income to 4.2 percent back in 2011, and extended it through December. Opinion differs about whether it’ll get extended again, but Encore contributor Alicia Munnell is betting against it — and she says that’s a good thing, at least for those who want Social Security to stay solvent. (Those who don’t will find allies on the comments page.) Munnell’s analysis runs on MarketWatch today.
