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So I got my first check of the year on Friday and it looks like with the tax changes and the increase in health insurance I'll be playing with about $500 less a month between my check and my wifes so here's what will happen:

I'll call the cable company and go down to a lesser package, cut my cell phone data plan, tell the pest control guy I'll handle it from here, do some of the projects around the house myself instead of hiring someone to do it, not go out to eat as much, pass on the hunting and fishing equipment I'd like to buy, bring my lunch to work more often, wait a little longer to get a newer vehicle, etc. Yeah, just my pulling out of contributing to the local economy won't hurt, but if 40 million others in the country are doing the same, what do you think will happen?

The cable company will lay people off, the pest c ontrol guy will go out of business, the waitress at the restaurant will be let go and drop out of school, the carpenter will be out of business and the person I would have bought the vehicle from may lose their place to live cause they couldn't pay the rent or the mortgage. Then they will all go on public assistance to make ends meet.

Keep on taxin!

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can feel for you, but where does the $500 a month that you have seen disappear from your checks go?

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And they haven't, but SS taxes went from 4.2% to 7.9%

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First of all, the 2% payroll tax reduction was only temporary.

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First, it's 6.2%. Second, it was a temporary tax holiday that ended.

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Third it should have never went down in the first place. SS is headed for bankruptcy and they thought the best thing to do was underfund it even faster.

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I know. I wish we had W back with all his fiscal responsibility.

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Ton Chou

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That 2% tax increase you're seeing pays for Social Security and Medicare.

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The 2 percent tax increase was solely to the normal 6.2 percent Social Security tax.

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can feel for you, but where does the $500 a month that you have seen disappear from your checks go?
Some of it goes to repay holders of U.S. debt that has matured. If the noteholders were U.S. citizens then the $500 would remain in the economy, but if it paid to non-citizens then it is removed from the economy. Your notion that the $500 would simply be redistributed to others in the economy would be true if the amounts of money being redistributed increased because of expanded benefits or expanded number of recipients. However, I doubt the costs of entitlement programs are increasing $250 per month per taxpayer.

The net result is that some of his $500 per month of additional tax revenue is not being recycled through the U.S. economy in the form of consumer spending. Some will be transformed into investment capital, and some will be withdrawn from the U.S. economy.

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germandawg, if you think there is a dollor for dollar relationship between the money you send to washington and the money you spend in the local economy you are an idiot. If that was the case, the things that our tax dollars are supposed to go to like roads, schools, etc. wouldn't be dilapidated. Sure some of it goes back into the economy in the form of sweetheart deals and pork barrel spending for excessively overpriced projects like WWII monument that Harry Reid's buddy benefits from. The proceeds then go to personal investments of said buddy who will pay less taxes than the pest control guy, restaurant waitress, etc.

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