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Thursday, May 23, 2024

Payroll Tax “Holiday”? – The Grasshopper and the Ant!


This was a very bad idea! The amount withheld from your paycheck (matched by your employer) is not a “tax,” but a contribution to your Social Security retirement benefits. If you don’t pay in during those quarters, it reduces the benefits you will receive upon retirement. Ask the Social Security Administration for a calculation of your estimated benefits (which are based on how much you pay-in) and you will see what I mean!

This “tax holiday,” like all holidays, costs you in the long run.  The reason that Social Security contributions were made mandatory was because a large portion of the population is too shortsighted to save for retirement on their own.  Where will your “stored harvest” be when you’re ready to retire?  That $1,000 per year that you don’t contribute today will mean money you won’t get tomorrow!

Furthermore, this “holiday,” in reality, further depletes an already broke system. And, by the way, now that we’ve experienced this “holiday,” how hard do you suppose it is going to be to re-institute this “non-tax”?

Do you see the absence of wisdom…Grasshopper?

Joseph Dion (Retired Attorney/CPA)
Masonville, Colorado

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