Aren't you confused? I am

AREN’T YOU CONFUSED? I AM

I would like to understand all this brouhaha about the payroll pay tax cut, and the Senate approving its extension and the House saying, no way we agree with that extension unless it is for one year instead of only two months, but at the end everybody approved it and Obama signed it and went singing on vacation to Hawaii.

If you would have only this information that is usually what you read or hear if you don’t go beyond that, you would understand that it is a tax cut, therefore the House (Republicans) will be for it, while the Senate (Democrats) will oppose it. But then, with this non-information, you would think, that’s right the Democrats want only two months while the Republicans want it for one year. 

Then it came the politics from both parties saying, in one side the Democrats accusing the Republicans of the poverty they are condemning the poor people who without the cut will receive $20 less in their paycheck for two months ($40 dollars), and the Republicans accusing the Democrats of condemning the poor people of no receiving the cut for an additional 10 months. Meanwhile, those millions of poor people who do not have a job don’t have to worry because they will not have the benefit anyway because they are not receiving the payroll to start with.

   

But if you read at least a little bit more, you will find out that the so call tax cut is not a tax at all, it is related to Social Security, that strictly speaking should not be call a tax since the amount that people with a job pay is a kind of premium for a future pension you may have in the future, but since the government took it, and unilaterally used it for other purposes, actually became a real tax, but still we can say that it should not be called a tax. So somebody in the government decided that they will cut this “payroll tax” and now they wanted to extend this cut in order that the poor people has those $20. On the other hand the employer pays to the same fund an amount commensurate to the amount paid by the employee, and therefore if this is the case with the cut, when they cut the “payroll tax”, they also cut the employers portion to the Social Security fund, cutting the money that the employee was receiving for his future pension.

Meanwhile, the federal budget increased beyond what the government received from taxes in almost a trillion extra dollars which will come from loans given to them by among others, foreign central banks and since the Congress decided after all that the ceiling on the debt should not exist a blank check was extended to Mr. Obama to continue with the spending that for sure will be beyond just $40 per payee.  As a matter of fact the debt is now “just” over 15 trillion dollars therefore in accord with those who like to be in debt, if you and I received 40 extra dollars next year it won’t increase that much in the debt but, weren’t they saying before that they wanted to fix the Social Security finances, but instead now they are cutting the amount going to that fund. It is confusing isn’t it?