Lost, perhaps, in the furor over the process of extending the payroll-tax holiday is what’s at stake from a policy perspective. To get a feel for it, let us run the numbers.
As a benchmark, consider the household-budgeting problems facing a 41-year-old head of household who makes $50,000 a year. Suppose she expects to see real incomes rise at 2 percent annually, pay an average overall effective tax rate of 15 percent, and retire at age 65, and anticipates a ten-year retirement with income that replaces half of her labor-market earnings.(Read More)http://www.nationalreview.com/corner/286543/payroll-taxes-policy-fight-douglas-holtz-eakin