Topic: Washington | By Patricia Murphy | February 17, 2012
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You may have heard a low buzz lately about a fight on Capitol Hill over something called the Payroll Tax Cut compromise, to which you thought, huh? Unlike many fights on Capitol Hill, this little package actually affects every American, and therefore every women in the country, with or without a job, so let’s go through the finer points of the bill that Congress passed today.
Here’s what you need to know:
* You currently pay 4.2% payroll tax in every paycheck. That’s the tax on the right-hand side of your pay stub that is automatically taken out of your paycheck to pay for Social Security. Until this year, you paid 6.2% payroll tax, but Congress temporarily lowered it to jump start the economy.
* The tax is scheduled to go back to 6.2% in your next paycheck if Congress does not approve this extension. That’s about $40 out of every paycheck or $1000 for the year.
* The rub for conservatives is that the tax usually puts $100 billion in the federal coffers, which will now be added to the deficit. Conservatives said they wanted spending cuts to make up for the lost $100 billion and wanted a permanent change to the tax code, not just small, part-time measures.
* The tax cut bill also includes more money for unemployment checks for anyone who has been out of a job for longer than six months, as well as money to pay Medicare patients’ doctors’ bills, since Medicare is supposed to start paying doctors 27% less to save money, but nobody really WANTS to pay doctors 27% less, follow?
* Despite the fight, and the most unfortunate budget realities behind it, Congress passed this bill today and the president has said he’ll sign it quickly, so your 40 extra bucks are safe for now.