Payroll Tax “Increase” Isn’t Obama’s Fault

I don’t usually get too political — it’s just not in my blood, I suppose. But after two weeks of hearing people complain that “President Obama raised payroll taxes,” I have to say my piece.

Maybe I’m too literal, but President Obama did not “raise” taxes.  Congress passed a “payroll holiday” two years ago, lowering employees’ Social Security contribution from 6.2% to 4.2%. It was a temporary measure aimed at injecting more money into the economy — the thought was that more spending money would equal more spending. It was supposed to help stimulate the economy. Did it do that? I don’t know.

Then the “fiscal cliff” came in December 2012, and it was only through bipartisan legislation, passed through both the House of Representatives and the Senate (both Democrats AND Republicans) that extra spending cuts and more taxes were avoided. Unfortunately, the so-called “payroll holiday” wasn’t extended as part of this legislation.

From a story by the Associated Press (not CNN, Fox News or MSNBC), Fiscal Cliff Avoided, Bipartisan Legislation Passed by U.S. House and Senate:

“A 2 percentage point temporary cut in the Social Security payroll tax, originally enacted two years ago to stimulate the economy, expired with the end of 2012. Neither Obama nor Republicans made a significant effort to extend it. [emphasis mine]

So yes, President Obama signed the legislation presented to him. While he may not have made the move to ask Congress to extend the temporary payroll tax cut, he didn’t directly restore the Social Security payroll tax to its original rate. Our elected representatives in Congress did.

I’m not a diehard liberal. I’m obviously fiscally conservative. I just don’t like when people jump to conclusions without looking at the facts.

Do you agree that it was Congress? Or do you think it’s the president’s fault? Comments from both sides of the aisle welcome below.

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3 comments to Payroll Tax “Increase” Isn’t Obama’s Fault

  • Finley

    I agree with you that it’s not just one party that’s to blame for the tax increases. The question really should be why are Tax cuts always temporary when spending increases are always permanent? Maybe Obama didn’t go out of his way to purposly increase those taxes but he did mislead the american people by telling them only the rich would have tax increases to pay “there fair share”. Maybe if he presented a bill to congress to cut spending for useless social programs that make lazy americans more dependant on Government make those tax cuts permanent.

  • Thank you! It has been really annoying me too. Sometimes I think that people can’t be partial. If anything happens that they don’t like they will blame the group they don’t like.

    I also think that considering the number of people we have to support with social security it is fine to go back to the original rate. Do I like paying taxes and having smaller paychecks? No. Would I like to take advantage of social security (and other government benefits) when I need to. Yes. So it is only fair that I pay my share.

  • Great points and not too literal at all. I would say that I’m probably more of a conservative in general and I absolutely agree with you. Great explanation for what the original payroll holiday was used for as well. While having these increases might be inconvenient I think people would be better off not pointing fingers and spending time re-adjusting their budgets :)

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