Payroll Tax Calculator: How Much Would You Save?

Adam,

Don't you think this is just a touch much of pandering to the masses.

And can you tell me what does "reset" mean in the sentence "reset the TARP and stimulus money that is currently being wasted" Does 'reset' mean that we are going to replace the pictures of our Presidents with the face of the guy from monopoly.

Brenton, I don't see how giving people an easy way to find out how much money this would save them is pandering. We understand your criticisms, you've made them pretty clear. We just disagree.

And "reset" the stimulus means to stop spending it, and take the money that was allocated and use it to offset this tax cut.

Technically, I am not criticizing you. I am mocking you. But in a world where we can “save” TARP money, does the English language have any meaning anymore.

Whether you call it mocking, criticism, or constructive ridicule, it does serve a purpose. If you look at the articles in which I have mocked the AS plan, you actually have a discussion form. This is the sense of community you are trying to build. I would hope that you appreciate my efforts.

I think that articles, where I have mocked you, the commentary has been much stronger. Not everyone agree with me, and we have a chance to exchange views. I don’t always come out on top as was the case on the education piece. I was wrong and I admitted it. In these exchanges, I learn new reasons why this plan is a stupid idea. As Darrin pointed out the consequences on employment 2 years out. I met Bruce who is a generous owner who pays his employees more than other employers would. Bruce you are a better man than I and 99.9% of the other business managers out there. This discussion is AS at work, the very manifestation of Newt’s vision.

I wish that I had your range with words because I am stuck on mocking which doesn’t have a homey feel to it. Constructive is the way I want to go, but ridicule is too much like mock. How ‘bout hmmm constructive analysis of consequences - much better than mocking.

"The first step of our Jobs First plan would be to reset the TARP and stimulus money that is currently being wasted, and instead use it to cut the payroll tax in half for 2 years."

Just so I'm clear...the idea is to cut taxes by "paying" for it with money we borrowed/printed in the first place because we didn't have it???
Although, I'm sure that most Americans can appreciate a tax cut...we can no more utilize this strategy (using borrowed/excessively printed money to paper over a problem), than we can spend even more. They're both palliative not a cure.
The very foundation of our economy is crumbling under the debt load of govt, companies, individuals, etc. Would it not be a more healthy discussion to test the "audience" for ideas on how to cut costs first?? I'm all for killing the remaining TARP/stimulus funds, but they should go back through the shredder, or back to the loans we took out in the first place. In other words, would it not be stimulative for the govt to quit competing for scarce capital on the global market so it could gravitate to actual economy building functions vs short term hopes with balloon payments?

I don't see anything wrong with showing folks how much money the politicians running the Federal Government are stealing from them!
This isn't pandering, it is presenting the facts in a meaningful, truthful, way!
Do keep in mind that I don't like this "temporary" tax cut proposal. I would rather see something more permanent and transparent!

Bruce, Describing the underfunding the SS Trust Fund as allowing you to keep your savings. Mind you they aren't cutting any benefits. This is telling people you can have your cake and eat it too. That isn't pandering?

I am guessing that these people missed the Biblical parable about the Prodigal Son. We are going to be the Prodigal Country.

Enslaved Country is more like it!
All in the name of Empathy.
I am just trying, with your help, to figure out how to explain the grave situation this country is in to the masses of Americans who don't know how Economics works.
And, at the same time why it is important to keep America free, strong and independent!

How do you expect to explain the situation to the masses when the folks at AS who claim to have some understanding don't know how the economy works? Seriously.

Bruce,

I imagine that we are closer in mind than you realize. I have no problem with lowering the FICA tax as long as you lower the benefits paid by Social Security. My problem is lowering the tax and telling people that they will have a retirement when they are unable to work.

I have no problem getting rid of the estate tax. It is a mind-numbingly stupid idea, and so is the AMT. Eliminating it will not create jobs. The arguments put forth by AmericanSolutions make me ask whether they truely understand the problem with the tax.

I would like to see the end of double taxation. I don't think that lowering the corporate tax rate is the best way to do it. But it has some merits. Again, this is a sales tax, and eliminating it will not create jobs as much as it creates debt that will destroy jobs.

Capital gains can come down, but capital is already taxed at a much lower rate than labor. Bill Gates and Warren Buffett pay a fraction of what you do as a percentage of wealth. Why is that? Because taxpayers defer taxes until the assets are sold. It is like you saying that shouldn't have to pay taxes on your wages because you haven't quit your job. And if you die, you pay NO capital gains the created wealth which are passed with a cost basis of date of death.

Now the brain-dead republicans will scream that taxing capital before it is sold would hurt businesses. It would and we don't do it. That benefit means that the taxes you will pay on capital are much less than the taxes on the same amount of wage earnings. We already tax them less, and the idea is to lower the tax to zero? I hope that you see that people like me will shift all of our earnings from wages to capital with the flip of an accounting switch.

Let's look at how stupid the incentive is. Once you tax the life out of wages and make capital gains tax free. I am going to give up my wages, and take stock options. This will occur on a large scale. Frankly I would drop my wage to $1 in exchange for capital gains. Stock options were part of the cause of the Tech Bubble in 2000. Do you really want to relive that experience?

The folks at AmericanSolutions just haven't thought through this idea.

Bruce, you asked what my solution is. http://www.americansolutions.com/take-action/2009/07/the-daily-solution-jobs-please.php . But at this point we are going to have to pay a steep price for the insanity of the last year.

I don't remember who I heard say it today, but it hit home for me, in terms of the debate above and what our economy is built on for the long term.
Ask yourself this question, how much of our consumeristic (if it's not a word it should be) economy is based on financed purchasing? Cars for Clunkers is based on taking most likely paid for cars off the road, crushing them and replacing with new cars, along with a brand new loan. Our govt spends on anything & everything, while doing a lot of that spending with borrowed dollars (from Fed Res, from China, from printing, from excess SS/Med taxes, unfunded Fed pensions, etc). Fannie/Freddie hold liens on over 1/2 of US homes, because, unlike the Great Depr, few people actually own their homes outright today. We buy appliances on credit. We take vacations on credit cards. We pay for Christmas on credit cards. Corporations borrow to build plants, buy machinery, finance inventory or purchase other companies.
If you just stop long enough to think about how much of our economy is fueled with debt, how much sense does it make in the long term to attempt short term gains by adding further debt? Not trying to sound like a broken record, but failing miserably, real recovery must start with living within our means personally, in govt and in business. Only then can we lay a foundation that can sustain growth. The govt is swamped in debt and is competing for scarce credit dollars now...it can only get worse as they continue to ramp up spending further. Does is seem logical that they can compete with business/consumers for credit and it not cost business/consumers more to borrow in the future? If it costs more to borrow, will business/consumers buy more or less?
All tax related ideas are moot, until spending is checked. It's not as sexy and most definitely painful, but it's unavoidable. It just gets worse as the addiction to the spending high will force us to go cold turkey when the country is bankrupt. Would that day be the kind of future you'd want for your children?

ANY payroll tax is unproductive and (some say) unconstitutional. If the Federal Government stayed with it's Constitutional constraints, there would be no need for these confiscatory taxation. I have little hope of that coming to pass in the near future.
That having been said, I think the idea of a consumption tax is far better than a production tax. If you want growth in this countries economy, stop taxing the things that cause growth.

Richard - the only way the income tax is "unconstitutional" is if the 16th Amend is repealed, which made it constitutional....
A "consumption tax", ie, "FairTax" only makes sense if it's preceded by the "FairSpending" proposal that's never mentioned in their sales pitch...

Richard, you said "I think the idea of a consumption tax is far better than a production tax. If you want growth in this countries economy, stop taxing the things that cause growth."

This means that you would support increasing the corporate income tax which is a consumption tax passed through to consumers in the form of higher prices. Newt's plan is going in the other direction.

Maybe something else to consider, for all those that think a FairTax or consumptive tax equivalent is the answer to all prayers...if this is true...why isn't the UK an economic powerhouse now? They've had the Value Added Tax (a consumptive tax) for a long, long time....just something to think about.

Please visit www.fairtax.org for the REAL solution to the whole issue of taxation.

Brad - how does the FairTax address spending? I can earn $10 a thousand different ways, ie, hourly pay, salary, commissions, bonus, inheritance, capital gains, etc....but if I only earn $10 and consistently spend $20....I go consistently bankrupt regardless of how I earned the $10.

Seems to me that years of abuse by the Government and associated politicians is not going to be fixed overnight. There is a huge "cultural" issue in both Washington and the State houses. There is some perception that when you are elected you are empowered to rule the kingdom and entitled to the benefits of your new found power. The idea of serving the community or representing the people is long lost. Its about agenda's, self importance. power and (your)money.

To that, if we think that going to a flat tax is going to change the culture of Washington and make them spend less, your are fooled. They will simply find another way to "tax". Income tax is just a percentage of what "money" is generated to the Gov't. We are taxed already on what we consume...music we buy, phones, internet, food, fuel...on and on and on.

So what is the answer. Go back to basics! IF THE PEOPLE really want positive change then they will need to take control. The media needs to be turned off (not literally of course) and we all need to seek true sources of information...not with politicians or so called Experts who have an axe to grind. We need to be realistic about entitlements...health care is not a right, but we should all have a right to access it. To own a home is not a right, but we all should have a (equal access)right to pursue a career that allows us to earn the income to purchase a home. We as a nation need to understand that this nation...initially...was built on the concept that Gov't would not infringe upon our God given Liberties to pursue....well we all know what it says. No one ever suggested in those days that we had the RIGHT to anything but to basic Liberties.

Our Culture today made up of a nation of people who think someone owes us something. We think that we should have things without working for it. We think we are guaranteed work and wages and benefits and easy credit and new cars and cheap gas and internet access and cell phones and free music and balh, blah blah. We expect it, people come to our nation expecting it! We are a nation of spoiled children who think that if we manipulate this, manipulate that, and say what needs to be said to make what ever we want to happen, happen, it is all okay. It's not and it has caught up with us!

So with all this what am I saying? We as a nation of free people, need to voice out concerns and vote! Those candidates who really __demonstrate__ that they have the best intentions for the voters and the nation should be elected. We need to vote those in, who uphold the rights as specified in the Constitution. We need to vote the current elite politicians out and start over!

We ALL KNOW THAT GOV'T IS WASTING OUR MONEY. we keep turning a blind eye to that if we get something out of it too. Yes tax breaks are great, and yes we get our money back, to what end? If Gov't is not forced to reduce spending, we either go into debt further or we get taxed another way.

GET TO THE ROOT CAUSE FOLKS! Gov't has been allowed to spend itself into a huge debt load. We allowed it to happen. Our personal greed and childish notions that we deserve something too (you know we all do it!)has gotten us into this mess and we have to get ourselves out. We act like kids at Christmas who believe in Santa and don't realize that your family is paying the price.

Lower the tax burden by lowering the spending. We cant live outside our personal budgets, why should we assume Gov't can. We all know that our Consumer based nation is a bad idea as well and that we need to also practice what our grandparent and their parents did which is save for a rainy day and don't buy what you cant afford. IT IS A MINDSET THAT WE NEED TO ACHIEVE!

We all should understand that if we allow entitlements and other programs to go into place, we all have to pay for it...or don't do it. We should also understand the concept of fair. We are all given the power to vote and we all have the power to influence the decisions of out nation. If we choose not to vote, that is your right (yes right) to do so, but it does not relinquish you from the burden of the decisions of the people...so in that, everyone should have equal tax burden since they had equal opportunity to vote. Yes...yes, flat tax that everyone pays is a good idea....no...no..it is not a cure for the economy or an over reaching Gov't who spends beyond it means! Lets face it, the politicians are spending WELL BEYOND what they are collecting now! What changes with a tax reduction.

I love my Country and I believe in the concepts that our "less than perfect" founders put in place in the early years of our nation. I believe in the right to Liberty to all citizens of the United States and that they should be equal to mine. I talk to hundreds of people and they all seem to have the same beliefs as I...BUT YOU would never know that if you listen to the media, the politicians or the various "groups". Americans all need to stand up and take the nation back. We are a great nation of great people and we need to take it back.

Again, you are arguing about symptoms of a bigger illness...

Gary:

WELL SAID!

I like the fact that you said it well and this is not Democrat or Republican. It is both parties that spend at alarming rates and blame each other for the problems we have. Both parties (for most part) are only interested in self gain and are not doing the job they were elected to do. We must all vote, e-mail, call and fax these politicians so that they know what we expect. Could you imagine what would happen if the majority started really taken the time to do these things? I do call, I do vote and I do email both parties and let them know what I do or do not like that they do but I do not think many of us do this, but we like to complain how bad they are. I hope others will read your statements as well as many of the others and take action to change our country.

I have owned two businesses. What has hurt me (and every person in the U.S., federal, state and local governments, school districts, etc) is not the taxes (FICA, Social Security, etc as well as Workmens Comp, insurance and other costs) or lack thereof, but the insidious hidden tax of inflation caused by a debauched currency created by the Federal Reserve Bank (a privately owned corporation owned by international banking interests) and the cover-up of its effect by using Cost of Living increases and increases in the Minimum Wage. Minimum wage (a lagging indicator of inflation) has gone from 35 cents to $7.25 an increase of over 2000%. On a recent TV commercial for gold, I heard Gordon Liddy proclaim that the dollar has lost 27% of its value since the year 2000.

But even more insidious than that is the Imbalance of Power that was created when the Power to Print and Coin Money was transferred from the Legislative Branch to the Executive Branch vis a vis the Treasury Dept and the Federal Reserve Bank. Sure, Congress still has the power of the purse but the money in the purse is worthless thanks to the non-stop printing presses of the Federal Reserve and the Executive Branch. Congress can't fund their projects and balance their budget and neither can California nor can you or me. Since the passing of the Federal Reserve Act of 1913 more and more power has been concentrated in the Executive Branch. What is the end game? Is it a dictatorship, an oligarchy, some form of socialism or facism replacing our Constitutional Republic? The plan was set in motion over 100 years ago and both Parties have been complicit in it. Newt didn't do anything about it when he was Speaker of the House, why should I consider trusting him as President?

Jobs Here, Jobs Now and Drill Here, Drill Now are nice slogans but they are meaningless drivel when the real problem is the sabotoging of the economy through the currency. They are cosmetic solutions like paint on a house when the house is being demolished from within by termites.

Gary - exactly my point, only you expressed it better than the 10 ways I & a couple others have tried on this site.
The taxing structure is meaningless when the govt spends more than it makes...each and every year. The ONLY possible way what they're doing right now makes any sense at all, is if their intent is to monetize their debt to ramp up inflation to the extent that it makes the $70T-$100T in debt/unfunded liabilities worthless..good for govt's balance sheet...insanely horrible for the people's. I can think of no other reason to logically continue on the path they've taken (BOTH parties) over the decades. We are basically sitting here waiting for China to tell us when we can't spend anymore because they quit loaning to us.
As I've said above somewhere...the FairTax is meaningless without a "FairSpending" attachment and if a FairSpending policy (ie, balanced fed budget) was met, the FairTax side of it would become moot.

Eloquently stated!! Why has no one mentioned the role of Goldman-Sachs??????

Carlton, Your assessment has some merit, but you are wasting your energy here. Newt's solution to our problems is to make your retirement pension free in addition to all of the freebies the government throws-out now.

Our political class doesn't value the dollar. It views inflation as a good thing, an invisible tax. Down 27% since 2000. Against what? It is down more than 50% against oil. Down more than 50% against other currencies. Down more than 50% against gold. What has the dollar held-up against?

The so-called conservatives have by and large not run any businesses. They are political widgets, who have found fame claiming to represent actual hardworking Americans. They parrott Reagan, but clearly do not understand the most basic tennant of Reaganomics - the 9 most terrifying words in the English language are : I'm from the government, I am here to help. The problem with the conservatives is that they think this only applies to the liberals.

All, cutting the payroll tax 1/2 for two years is a true stimulus package. Obviously the math is extremely simple, an individual/family with an annual income of $100K would have an extra annual take home of $3,825.00.

I own a small business with an annual payroll of approximately $1,604,000.00. Given this plan my business would have an extra annual income of $61,353.00 for two years. Thus I would have the luxury of creating four (4) entry level positions and two (2) experienced level positions each year. Moreover, I would have the ability to purchase more equipment, materials, etc.

I'm certain individuals who are looking for work or manufacturing companies selling equipment would sign on for this change.

Scott, You talk about the benefits, but what about the costs?

What are you going to do about the hole this idiotic idea would create in the Social Security Trust Fund. Have you thought about that? Have you asked yourself what is going to happen when the Chinese stop financing our lifestyle? What are you going to do in two years - fire all of the people you hired?

I don't know what business you work in but your numbers don't add up. If you save $61,353, how are your going to hire two "Experienced Level" people. That is 30K a person, including benefits. What do you run a bar?

Emails like yours make me think this country has lost its mind.

Have to agree with Brenton above...SS is already $9-$10T in the hole...with a wave of boomers set to retire and start collecting SS...how does cutting its funding in half for 2 years solve that issue?
Temporary anything doesn't equate to permanent anything. It's a ponzi scheme on top of a ponzi scheme.

"NO GOVERNMENT, NOT EVEN OURS, SHOULD HAVE THE ABILITY & POWER TO DECIDE WHO LIVES AND WHO DIES, WHO RECEIVES MEDICAL TREATMENT AND WHO DOES NOT"
~~~~~~~~~~~~~

Insurance companies pay billions on legal defense costs. Even if a physician did nothing wrong the defense costs can easily reach and exceed $100,000. Lawyers are benefiting from this, not the insurance companies and not the people who have legitimate claims. If our government was serious about health care costs then Tort reform would be at the top of the list. Some physicians (even those who have done nothing wrong) work 3 months or more to pay their insurance premiums. If the government is going to take another 3 to 6 months of their income for taxes why would anyone want to be a physician?

What is the FDA doing? Why has the FDA approved so many drugs from the fat and happy pharmaceutical companies that are so dangerous? How often have you heard that some "new" pill on the market caused serious injuries or death? We need regulation of the drug companies. Not of the patients who need proper medication.

President Obama has struck a deal with the pharmaceutical companies. So what did he give them in return?

As for the seniors? Different sources show that in his writings, Ezekiel Emmanuel, who is a key healthcare advisor of President Obama, has favored a so called bell curve that suggests that the very young and the old (old being over 50) receive treatment last. It is perceived that these individuals aren't as productive. Productive? Well who built this country? The elderly. Who is our future, the youth. The elderly have already paid into the insurance and healthcare system, the elderly have already paid into social security and medicare. This is tantamount to a bank taking your money you put into a savings account and then giving your hard earned money to someone they think deserves it more!

SAY NO TO GOVERNMENT RUN HEALTHCARE. DO NOT GIVE UP YOUR FREEDOM!

Stimulating the economy is great, but you can not do that long term by just cutting the income tax by 1/2 for a year. You would have to cut the spending by the same, just to stay where we are at! Spending is the issue....period. Stop the crazy spending and the taxes will go down. If we all start making our elected officials toe the same financial line we all do (Or should), then this would be a better place. Make them do what we want done...they are ELECTED PUBLIC SERVANTS, not appointed Kings and Queens. Not yet anyway.....

Too many experts and people who want to overly complicate the issue (even on this list) by talking statistics, bell curves, inflation and monetary theory and specify that one of the elements, if ...blah, blah, blah... will fix the economy. EVERYONE seems to loose site that CAUSE AND AFFECT (sp?) is the constant. If you do A, it impacts B. If you cut taxes, it lowers revenue. If you don't lower spending, it raises debt.

Now, YES, I sign up for the fact that lowering taxes can actually raise personal/business income and production and thus create a stronger tax revenue stream, but when you are talking trillions in debt load now, and I think we are now way past that arguement. Also, hey, I don't know, it would be cool to have a tax surplus and then give folks a dividend if it did work that way! That would be stimulating! Point is you can count on lower taxes giving you a higher revenue...that is another discussion.

We as a country may need to start over from a Gov't spending stand point. There are NO POLITICIANS currently that have the, you know, courage to step up and say "We need to dramatically curb spending", "We may have to wait on Health care, and bailing out car manufacturers and paying for (fill in the blank)__________ ". "We need to restructure and get our house in order first before we can determine that we can afford to do these other things".

But all this is still the tip of the Iceberg...I just got and e-mail about HR45 (dont know what that is, check the web). Gun Control is not the issue in this conversation, but what is, is the quickness and "under the radar" tactics that our elected officials are using to push through bills and legislation that further undermine our liberties. They are working fast because they know if the "Silent Majority" wakes up, they are done! We are in a social and political Blitzkrieg ...

So what to do...vote. Use the new media to express your concerns and opinions. Reach out to those who are not participating and educate them about the real cool tool that our fathers gave us, called the vote. Educate them on the truth of what is going on and not all the axe grinding, media driven, "anything to get elected" junk they and we are forced to listen to. Calling your representative or senator..sure give it a try, but these are the guys who are doing it to us now, why do you think they will listen now? IF YOU VOTE THEM OUT AND LET THE NEW ELECTED KNOW IF THEY DON'T LISTEN AND REPRESENT US LIKE THEY SAID THEY WOULD, they will be out of a job next term, you watch...that will work!