In the AP article headlined, "Retail spending up despite tax worries" that appeared in the January 16 edition of The Berkshire Eagle, it states, "Retail sales are likely to weaken in the first half of 2013 because lawmakers and President Barack Obama allowed a two-year reduction in Social Security payroll taxes to lapse. Most Americans will start seeing less money in their paychecks this month. A person earning $50,000 a year will see take-home pay shrink by roughly $1,000 in 2013. That's likely to slow consumer spending and weigh on overall economic growth."
For most of my adult life I have heard the doomsday prognostications about the pending bankruptcy of Social Security and every president and Congress has masterfully deferred the challenge to the next administration or Congress. Now it appears that the president and Congress have found a politically safe way to raise Social Security withholding and simply blame it on a temporary two-year reduction lapse; no harm, no foul.
While I can't argue that Social Security doesn't need additional funding, I certainly can argue that an additional 2 percent withholding on middle-class families is the wrong place to go hunting for increases. Not only is it unduly painful to the middle-class, it takes a huge whack at every retail business in America.
Social Security's financial health is not a Democratic or Republican issue; it is an every-American issue that transcends the political bickering and "get re-elected
Social Security withholding increases need to be directed into the upper tiers of earners and not into the bottom half of earners or the businesses that create the jobs. For 2013 SS withholding stops at $113,700. Most middle-class Americans will not see $113,700 in earnings this year. This limit may be fine for the portion of Social Security withholding paid by employers, but for individuals earning more than $113,700 and up into the stratosphere, the limit has to be raised or removed altogether.
Additional taxation is never popular with those affected, but to delay securing Social Security's financial future any longer is irresponsible and will lead to a plethora of future social and fiscal problems. It is time for every American to demand a long-term solution from our president, senators and congressmen.