Politics As Usual- Screw the People

Obama Monopoly Playing with Our Money

            The latest game in Washington is “Just Say No.” The ridiculous game over the suspension of Employee Payroll Taxes uses the Social Security Trust Fund to highlight the drama in Washington. The two month extension is nothing less than political foolery using our money just like Monopoly money.

             President Obama’s political theater to keep the payroll debate in the forefront was created by idiots or fools, and the Congress, both Houses, decided to confirm that they were just as stupid.  Are these harsh words? You decide.

            The fantasy two month extension of the Tax Holiday continues to take the two percent from the employers and give it to the employees under the guise of creating jobs.  A nice gesture but Congress, the Stinson-Boles Commission and the 12 Surly Congressmen on the Deficit Reduction Task Force have already determined that Social Security must be fixed.  So how are the fixing it, by cutting funding to Social Security.

            In a bi-partisan agreement, both Houses agreed to a two month extension over the demands of the President for a one year extension. The House wanted  one year, with the exception of the Tea Party candidates. The President wanted a year and the Senate only wanted two months.  It is my guess that the level of Congressional Testosterone must have been declining in Washington as all the members neared their holiday sabbatical.

            Where is the stupidity in all this?  There were many issues to debate. The only one that we didn’t hear was the one for small business, you know those people who create jobs so these fools can play with our money. In a recent survey of people in Times Square a couple of weeks ago,  people were asked about the two month tax extension and only one out of dozens had the faintest idea of what it was.  None knew about or remembered why they got a couple of bucks more in their paychecks last year.

            Here is a brief summary of the idiocy. Employers pay With Holding to the IRS that includes Taxes withheld from the employee and the employer’s contribution to FICA (Social Security).  Normally, in days when Congress had a little bit of sense, the Tax Rates were changed on an Annual Basis and this policy always included FICA deductions and Employer Matching Contributions.

 The IRS Report, commonly called a “941,” is sent by the employer to the IRS with the total contributions, both employee and employer, either monthly or quarterly.  There is also a year-end summary that must be completed.  Most small business’ and all large business’ use payroll systems to calculate and report the monthly, quarterly, and annual reports. The annual rate is plugged into the accounting systems  and the employee’s checks, paycheck stubs and summaries, and all payroll reports for the company, including the IRS Reports are calculated using the Congress Approved rate for the year. Sounds pretty simple doesn’t it. It was.

 In discussing this problem with a CPA, I confirmed my belief that most payroll systems were not designed for variable rate processing. Congress, in its infinite wisdom and with a hidden agenda, extended the payroll holiday for two months, not a quarter which is the standard reporting period. Most of the popular small business accounting packages do not have the capability of doing variable withholding rate processing. No one in their right mind would have ever anticipated the need for it. If for any reason, Congress and the President continue the Tax Dance to help 160 million people,  guess who gets the screw job?  Surprise, it won’t be just the business’ that have to prepare hand written tax reports but also the IRS who will not get automated tax reporting and would have to process amended reports manually.  In the effort to create jobs, if you are CPA you are in luck.

How come we haven’t heard about this?  Because it is just another political game played by the Washington Insiders.  The game is called “Screw the People.”

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2 responses to “Politics As Usual- Screw the People

  1. We, of the Tea party, worked so hard and don’t see the fruits of our labors. In 2012 we have the opportunity to change a significant portion of Congress and oust the self-serving “good ol’ boys”. Only then will we have a government of the people, by the people. Good article.

  2. You can always trust the democrats to be consistent left wing socialists. However, you can’t trust the Republicans, ever. They sound like conservatives, but cross over at the last minute whenever there is an important issue to be decided. I read somewhere that mortgages will be taxed over the next ten years to pay for the two month social security deduction.

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