For working poor, tax tweak cuts pay, By Brian J. O’Connor, January 31, 2011, Detroit News: “If you haven’t seen the new 2 percent payroll tax cut reflected in your paycheck yet, look closely at your pay stub. But if you don’t make a lot of money, you might not want to look too closely. Today is the deadline for employers to adjust their payroll systems and lower the rate on Social Security payroll taxes to 4.2 percent from 6.2 percent. They’ll also have until March 31 to adjust checks to give back any excess amount withheld so far this year. Sam Morgan, a tow truck driver, said he would be glad to see anything extra in his next paycheck. ‘I would like a tax cut,’ the 25-year-old Madison Heights man said. ‘I can always use more money in my paycheck.’ But for taxpayers making less than $20,000 a year, the new tax cut will turn out to be a tax hike. Workers making $15,000 a year, for example, will pay $100 more in taxes during 2011 than in 2010. And if they file a joint return, they will pay $500 more…”
Tag: Economic stimulus
States and Prisoner Re-entry Programs
States help ex-inmates find jobs, By Steven Greenhouse, January 24, 2011, New York Times: “Faced with yawning budget gaps and high unemployment, California, Michigan, New York and several other states are attacking both problems with a surprising strategy: helping ex-convicts find jobs to keep them from ending up back in prison. The approach is backed by prisoner advocates as well as liberal and conservative government officials, who say it pays off in cold, hard numbers. Michigan, for example, spends $35,000 a year to keep someone in prison – more than the cost of educating a University of Michigan student. Through vigorous job placement programs and prudent use of parole, state officials say they have cut the prison population by 7,500, or about 15 percent, over the last four years, yielding more than $200 million in annual savings. Michigan spends $56 million a year on various re-entry programs, including substance abuse treatment and job training…”
State Unemployment Funds
States will soon have to start paying interest on their massive unemployment borrowing, By Olga Pierce, January 14, 2011, ProPublica: “Sometimes it’s time to pay the piper. And sometimes that piper is the federal government. And sometimes the piper wants more than $1 billion. Soon. Because of the high jobless rate and past fiscal irresponsibility, 30 states have collectively had to borrow more than $40 billion from the federal government just to keep unemployment insurance checks in the mail. A provision in the stimulus bill made those loans interest-free for an extended grace period. But no more. Efforts to include an extension of the grace period in Obama’s tax cut extension enacted at the end of last year failed, and the first batch of 14 states will have to start paying interest before the end of this year. Given that state budgets need to be hammered out in advance, that means state legislatures will soon face tough choices as they come back in session…”