Workers often don’t realize the extent of payroll deductions. A 2 percent change in the payroll tax that funds Social Security kicked in last year, yielding an average $579 in additional take-home pay for an Oklahoma worker. It was a gift that, over time, translates to an extra paycheck for many. That tax rate is subject to change again. President Barack Obama and Democrats in Congress want to lower the rate again. The plan is to drop the 4.2 percent rate to 3.1 percent for 2012 and reduce it by half for all businesses on the first $5 million of their payroll.
To make up for the Social Security revenue dip, Democrats want to propose a 3.25 percent income tax surcharge on Americans earning $1 million or more.
A vote on the plan could come as early as this week. If no action is taken, the 2 percent cut this year would end and workers would have more money withheld from their checks, beginning in January. If the lower rate is approved, the Treasury Department estimates that Oklahomans will receive another $1.9 billion in take-home pay next year.
The debate is descending into a middle class vs. super wealthy one. Republicans want to backfill the Social Security fund by freezing federal employee salaries for another three years, which resonates well with voters.