- The Washington Times - Thursday, January 3, 2013


The analysis of the tax “deal” arrived at by Congress this week omitted a couple of important points (“‘Fiscal cliff’ deal ignores the real problem,” Commentary, Thursday).

First, for Americans earning less than $400,000 per year (single) or $450,000 annually (household), income tax withholding will stay where it is. Most people assume a tax rate cut means they will pay less in taxes, but this cut merely continues a rate reduction already in place. That is bound to disappoint many taxpayers when they get their first paychecks of 2013.

More important, the Senate agreement allows the payroll tax for Social Security to go back up to 6.2 percent (plus 1.45 percent for Medicare). This means the total amount withheld from workers’ paychecks will increase and their take-home pay will be correspondingly reduced. Most taxpayers don’t differentiate between income taxes and FICA — it’s what they are paid after all deductions that matters.

It is bad enough that Congress is congratulating itself for preventing a tax increase while imposing a FICA tax increase for all Americans. The confusion is compounded when the media don’t tell us that this is part of the “deal.”


Arlington, Va.

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