President Barack Obama, Congress and tax-cut advocates pushed through a one-year provision that lowers 2 percent of the mandatory contribution to the Social Security Trust Fund. The usual amount paid in Social Security withholding is 6.2 percent. The new tax provision allows workers to pay in 4.2 percent for a full tax year.
The tax break will cost the federal government an estimated $112 billion. The idea behind the tax-cut is that Americans will keep more of their money and stimulate the economy.
In Utah alone, 1.3 million working Utahns will keep $950,000 of their paychecks.
Low-income elders in Utah worry the tax provision will have negative long-term effects on Social Security.
Several residents of the senior housing in Salt Lake City spoke about the benefits and the tax holiday. Colleen Martinez, 63, does not want the tax holiday to lead to cuts in her Social Security benefits, as she would no longer afford living in a housing center.
The elderly Americans have similar worries, for the first time in 75 years; the Social Security will depend on the nation’s general fund budget for revenue. They fear this might be a step toward cutting Social Security benefits, especially if the government tries to force reduction of our government’s debt by cutting into benefits.
Americans such as Martinez worry their children and grandchildren will not have Social Security benefits to rely on as they reach retirement age.