As expected our saints in Congress “came through” at the last possible moment to kick the proverbial debt, tax, and spending can down the road for a little bit.
A deal was struck, the middle class was “saved” — or was it? — and everyone can focus on using this small planned victory in the next election cycle.
…said the cynic.
Nonetheless your taxes won’t be jumping up by 27% next year. Instead, a 2% discount in the Social Security tax that has been in place for a few years will disappear. Many will moan and complain about having less money in their pockets and how this is a tax increase. I see it more as you used to be able to use a coupon someplace, but now the store isn’t accepting 2% off coupons anymore. The drop from 6.2% tax to 4.2% was meant to be temporary to boost the economy.
Considering the rate has been 6.2% since 1990, hasn’t been below 5% since 1973, and hasn’t been below 6% since 1988… I’d say it is the removal of a discount. But people will still complain about losing 2% next year, and that’s understandable I suppose. Just realize that you shouldn’t have had that extra 2% for the last few years, move on, and try to save or earn more money this year.
You can cover that extra 2% in Social Security tax easily by implementing a great financial plan to pay off your debt, earn more money, and save for a rainy day. Here are some articles to help you do just that:
Financial Blogger Conference | Things I Wish I Knew When I Started Blogging
CNN Money | Can a $1 trillion coin end debt ceiling crisis?
The Empowered Dollar | 2013: Why this is the Year of Quiet Persistence
Bloomberg | Almost All of Wall Street Got 2012 Market Calls Wrong
Boomer and Echo | Monthly Financial Planning Checklist
Get Rich Slowly | Romanticizing Poverty and Learning Financial Independence
Len Penzo | What It Really Feels Like to Be a Billionaire
Good Financial Cents | The Debt Movement: Taking Down $10 Million of Debt in 90 Days, Together
Bible Money Matters | Avoid the Distractions and Keep Your Focus on Your Goals or You’ll End Up with Empty Pockets