Payroll Tax Holiday Rant

I’m all for putting money into the pockets of working class folks. And quite frankly I’m less than enthused about the ponzi scheme known as social security. The payroll tax holiday basically proves that social security is a ponzi scheme. For a year now, taxpayers have contributed less FICA tax to their social security accounts. Yet, current recipients continue to receive benefits at the same rate, and those taking advantage have not yet been told that this “holiday” means either that their social security checks will be smaller when they retire, or that social security as it is currently envisions will collapse under its own weight. The Machiavelli in me sees this “holiday” as an opportunity to speed up the social security collapse for those inclined to do away with it in its current form. The realist in me sees this as another blundering move without an eye on the long term effects of such a social security contribution holiday. Note also that the holiday suddenly is from a “tax” instead of a “contribution”. Are democrats adopting republican lingo? I would have preferred that Congress cut the income tax rate, but oops lower middle class people don’t pay income taxes. So, the only way to give them cash is to take it out of their retirement checks. Sooner or later, we’ll all have to pay the piper for this holiday. To put dollars on this. Let’s say a guy makes $40,000 per year and is 30 years old. This “holiday” means that about $2,000 is not contributed to his social security account. That means when he retires he will have $4,160 less in his social security trust fund when he reaches age 65 assuming a 3% interest rate. Thus, 35 years from now, theoretically his benefits will be cut by $23/month. But of course that won’t happen.