March 2, 2012

Latest PJ Media Column (‘The ‘$40 Per Paycheck’ and Other Payroll Tax Cut Fibs’) Is Up (See Updates)

It’s here.

It will go up here at BizzyBlog on Sunday (link won’t work until then) after the blackout expires.


UPDATE: The column is about how the Obama administration is fibbing about the reduction in the employee portion of the Social Security tax this year in two important ways:

  • The claim that it “currently” benefits 160 million Americans.
  • The assertion that the saving resulting from lower amounts withheld will mean that the “typical family saves about $40 with every paycheck.”

Both claims are bogus, and there’s a back of the envelope way to prove it even without getting into still-needed discussions about how often most Americans are paid (which happens to be weekly, in which case “$40 per paycheck” would only be seen by a person making $104,000 per year, which is hardly “typical”) and how many are “currently” working (only about 141.64 million per the Household Survey at the Bureau of Labor Statistics).

The quick calc is as follows: $111.9 billion dollars in estimated full-year tax savings ($93.2 billion over 10 months annualized) divided by 141.64 million workers is $790 per worker per year ($699 if you use the administration’s inflated 160 million “current” workers). Even granting Team Obama something they’re not entitled to, which is the assumption that everyone is paid once every two weeks, that’s $30.38 per paycheck ($781 divided by 26).

Don’t talk to me about two-earner households, because such households also receive two paychecks. The per-paycheck average is still $30.

By any reasonable definition, even before addressing pay frequency realities vs. the administration’s assumption, Obama is vastly exaggerating the savings workers are seeing by 32% ($40 as advertised vs. $30.38 in reality).

UPDATE 2: The Machiavellian at Virtuous Republic has also done a great takedown of the “$40 per paycheck” fib. His conclusion: “Deceptive … Purposefully.



  1. uhm, Tom, does the $14 actual per week savings on SS payroll tax really cover the “Making work pay” foolery withholding farce which leaves people owing on April 15th? I wonder. In other words one farce is a cover for another farce…

    Comment by dscott — March 2, 2012 @ 10:46 am

  2. #1, I don’t think I follow.

    IIRC, there was a withholding “cut” in 2009 which wasn’t a cut a all which ended up having to be covered on April 15, 2010, but I think that’s gone away.

    Comment by TBlumer — March 2, 2012 @ 11:11 am

  3. [...] Latest PJ Media Column (‘The ‘$40 Per Paycheck’ and Other Payroll Tax Cut Fibs’) Is Up [...]

    Pingback by Latest PJ Media Column (‘The ‘$40 Per Paycheck’ and Other Payroll Tax Cut Fibs’) Is Up | PERSUASION IN INK — March 2, 2012 @ 1:15 pm

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