In 2010, Congress passed the Tax Hike Prevention Act, which among other things reduced the payroll tax from 6.2% to 4.2% starting in 2011. For two years, workers saw higher take-home income than they would have had the law never existed, and consumers responded favorably by using the extra money throughout the two years to [...]Show More Summary
Basit Zafar, Max Livingston, and Wilbert van der Klaauw examine the impact of the payroll tax cut in 2011 and 2012, and its subsequent reversal: My Two (Per)cents: How Are American Workers Dealing with the Payroll Tax Hike?, by Basi...
(CNNMoney) - Most Americans plan to cut spending to make up for income lost from the payroll tax hike, according to a New York Federal Reserve study released Wednesday. The payroll tax cut, which was in effect in 2011 and 2012, reduced the amount withheld from workers' paychecks to 4.2%, down from 6.2%. That put […]
(WASHINGTON) — A survey shows U.S. companies added the fewest jobs in seven months, indicating that government spending cuts and higher taxes may be weighing on the economy. Payroll processor ADP says private employers added just 119,000 jobs last month. Show More Summary
US consumer spending grew slightly in March. ||| Washington - US consumer spending grew slightly in March, the Commerce Department reported Monday, in a fresh sign that higher payroll taxes and government spending cuts could be slowing economic growth. Show More Summary
The Commerce Department reported that U.S. retail sales contracted in March, their sharpest decline in nine months, as payroll tax hikes and government spending cuts may finally be taking a toll on consumer spending.
2013 is a tough year if you owe payroll tax, as most of us do. Not only did the 2010 payroll tax cut die at the end of 2012, but high-income workers now owe an extra 0.9 percent, thanks to the Affordable Care Act. Economists worry about...Show More Summary
By Harlan Levy: Economist Nicholas Perna is the economic adviser to Webster Financial Corp. and managing director of consulting firm Perna Associates. He is also a visiting lecturer at Yale University. Harlan Levy: Did March's poor job numbers - only 88,000 new jobs - change your outlook on the U.S. Show More Summary
And bring back the payroll tax cut.
2013 is a tough year if you owe payroll tax, as most of us do. Not only did the 2010 payroll tax cut die at the end of 2012, but high-income workers now owe an extra 0.9 percent, thanks to the Affordable Care Act. Economists worry about what the combined new taxes will mean for [...]
This is exactly right, from Justin Green. Cut the payroll tax — Justin Green (@JGreenDC) April 5, 2013 The upshot of today's bad jobs report, assuming the numbers aren't revised massively, is that retail sector is weak, which implies a negative effect from the increase in the payroll tax, which happened at the start of the year. Show More Summary
From Yahoo.com: Economists predicted catastrophe: As workers started taking home paychecks in January that were 2 percent lighter – thanks to the expiration of the payroll tax cut – they thought consumer confidence and spending would tank. So far, it hasn’t. Retail sales rose more than analysts expected last month, and consumer confidence rebounded. It [...]
Economists predicted catastrophe: As workers started taking home paychecks in January that were 2 percent lighter – thanks to the expiration of the payroll tax cut – they thought consumer confidence and spending would tank. So far, it hasn’t. Retail sales rose m …
(Chip Somodevilla/Getty Images) While extending the payroll tax cut through the end of last year, members of Congress last fall took what many feel was a long overdue whack at the cost of their retirement plan. They bumped up the rate...Show More Summary
A Bush-era payroll tax cut expired in 2012, and economists continue to worry about how it will impact consumer spending. After all, personal consumption continues to account for around 70 percent of GDP. The January retail sales report reflected a modest increase in consumer spending. Show More Summary
The "fiscal cliff" drama that closed 2012 resulted in a last-minute deal that included, among other things, the expiration of a a payroll tax cut. However, Washington's fiscal brinksmanship also forced the IRS to delay the beginning of the tax filing season by two weeks. Show More Summary
In February, emails circulating among Wal-Mart executives leaked to the press. The emails described February sales figures as a "total disaster," and the executives placed the blame on the payroll tax cut expiry that went into effect on January 1. Show More Summary
By Stephen Aniston: What a difference a month makes! Last month, I thought the economy is going to dip into a recession in the face of the sequester and the double whammy tax hikes of payroll tax cut expiration that is hitting the poor and the new higher marginal tax rates on the rich. Show More Summary
The combined effect of payroll tax increases and automatic budget cuts could suppress monthly hiring by more than last year's average monthly gain, economists say.
WASHINGTON -- The American job market appears to be holding up fairly well in the face of higher payroll taxes this year and uncertainty over government budget cuts -- so far anyway.