The Joplin Globe, Joplin, MO

Local News

January 2, 2013

Payroll-tax increase cuts take-home pay for many

JOPLIN, Mo. — Unless you get a raise in pay with the new year, the take-home pay in your next paycheck will be smaller, and so will the paychecks after that.

That’s because legislation that Congress approved Tuesday extended numerous tax breaks, but it did not extend the reduction in the Social Security payroll tax that Americans have seen the past two years.

Social Security is financed by a 12.4 percent tax on wages up to $113,700, with employers paying half and workers paying half. President Barack Obama and Congress reduced the share paid by workers from 6.2 percent to 4.2 percent for 2011 and again in 2012 to stimulate the economy.

While the extra money was welcomed by Americans — that cut in the payroll tax was worth about $1,000 to an employee making $50,000 a year — it was never fully embraced by either party. This time around, there was enough agreement to let it expire.

Cris Henkle, co-owner with her husband, John, of Henkle Ace Hardware, 1201 S. Madison St. in Webb City, said the payroll-tax reduction was never a good idea to start with, given the funding shortfall that will soon hit Social Security with so many baby boomers retiring.

“I don’t think it ever should have been put into effect,” she said. “It was a foolish thing to do. We were given a reprieve, but really it is something we should have been paying.”

And now that workers have had two years to get used to it — the hardware store employs between 10 and 12 people — they won’t welcome the bite out of their take-home pay.

“It is always a pain to take things back once you have given them,” Henkle said.

She said the reduction in take-home pay might affect some retailers, but she doesn’t expect it to hurt her hardware business. In fact, during hard times, there are more do-it-yourselfers who seek out businesses such as hers for parts, supplies and advice.

“For our store, normally we are fairly recession-proof,” Henkle said. “I can see other retailers — luxury items, clothing — I can see where they are going to have some issues.”

U.S. Rep. Billy Long, a Republican who represents Southwest Missouri, on Wednesday said the payroll-tax increase will be the first thing Americans notice about the deal that was worked out between Obama’s team and congressional leaders. He said he agreed with the decision to restore the full tax, noting that the two-year tax cut was akin to robbing Social Security when it, too, is going broke.

“That was never intended to be permanent,” said Long, who voted against the “fiscal cliff” bill.

Text Only
Local News
  • State audit of Joplin School District begins

    Staff members from the state auditor’s office have begun their audit of the Joplin School District, Superintendent C.J. Huff said Monday. They are expected to be in the district four days per week for the next five to six months, or perhaps longer, until the audit is complete, Huff said.

    July 21, 2014

  • Burglary conviction draws shock prison time

    A Joplin man who received 120 days of shock incarceration time Friday in a drunken-driving case in Jasper County Circuit Court was assessed a concurrent sentence Monday in a burglary case.

    July 21, 2014

  • Mike Pound 2010.jpg Mike Pound: Family gatherings mirror circle of life

    The annual family gathering is getting bigger. There tends to be an ebb and a flow to most family gatherings. When you’re a kid, and especially if you’re a kid from a large Catholic family, the gatherings seem to be huge.

    July 21, 2014 1 Photo

  • Carthage man pleads guilty in sexual abuse case

    A Carthage man pleaded guilty Monday to sexual abuse of a 12-year-old girl in a plea agreement that would cap the length of his prison term at no more than 15 years.

    July 21, 2014

  • Main Street TIF district study to begin

    A measure that allows the city to charge its $15,000 in administrative costs for studying a proposal to create a tax increment financing district on South Main Street was approved Monday by the Joplin City Council.

    July 21, 2014

  • 071714 Jasper Cty Dispatch1_72.jpg Area communities, Jasper County work to improve communications

    The first law enforcement officer to respond to a fatal shooting last November at Northpark Mall was from the Duquesne Police Department — not Joplin. Joplin police Chief Jason Burns said he wasn’t bothered by that. “We dispatch for them, and they had an officer close who could get there faster,” he said. “And getting help to people as quickly as possible is more important than jurisdictions.”

    July 20, 2014 2 Photos

  • New and old TIF districts on agenda for Joplin council

    Another tax increment financing district is being proposed for Joplin, this one along South Main Street. The area is close to the new Mercy Hospital Joplin that is set to open next year. RKS Development is seeking authorization from the Joplin City Council when it meets Monday night to prepare a request to establish a TIF district.

    July 20, 2014

  • AndraBryanStefanoni.jpg Andra Bryan Stefanoni: Family grows by one — a black Lab named Raven

    If you haven’t experienced the feeling of a tiny puppy in your lap at the end of a perfect July Saturday — hammock time, s’mores, leisurely walks, you know the kind — I highly recommend it. It is pure joy.

    July 20, 2014 1 Photo

  • 042017 Jo Ellis_c.jpg Jo Ellis: Car show, sidewalk sale and more scheduled for weekend in Carthage

    All roads leading to Carthage should be packed this weekend as numerous events geared toward entertainment, cultural pursuits and bargain hunting are expected to pull in large crowds.

    July 20, 2014 1 Photo

  • SusanRedden.jpg Susan Redden: Hobby Lobby lawyer to speak at watermelon feed

    Josh Hawley, who helped represent Hobby Lobby in arguments before the U.S. Supreme Court on contraception requirements in the Affordable Care Act, has been added to the list of speakers for Thursday’s annual watermelon feed sponsored by Newton County Republicans.

    July 20, 2014 1 Photo

Must Read
Sports
Photos


Facebook
Poll

Do you think Missouri should pass legislation that would allow a prescription drug database to be kept?

A. Yes.
B. No.
     View Results
Opinion
Twitter Updates
Follow us on twitter