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Payroll Tax Cut Doesn’t Impact Social Security


Thursday, December 22, 2011   

SIOUX FALLS, S. D. - While many families wait to see what comes of the payroll tax extension debate in Washington, seniors are being reassured that whatever happens, it shouldn't affect Social Security. The U.S. House and Senate disagree on the length of the tax cut extension, and if they can't resolve it, taxes will rise 2 percent next month.

Sarah Jennings, state director of AARP-South Dakota, says the original tax cut, even though it involves money designated for the Social Security Trust Fund, was designed to have little impact on Social Security.

"If the payroll tax holiday continues, we want to make sure that the funding to the Social Security Trust Fund is being repaid by some other revenue. And that's been happening, so there has been no weakening of Social Security. That has been a priority for us, and that's what we are really going to watch going forward, as well."

The Senate has already passed a two-month extension of the tax cut, while the House wants to extend it for all of 2012. In Jennings' view, while Social Security needs to be protected, working families deserve a break, too.

"As part of the original agreement, they made sure the way it was constructed, all those funds, that Social Security wouldn't have any negative impact – that they were getting repaid into the trust fund though general funds, and seniors shouldn't worry about their Social Security. And I think really, the question here is whether folks who are working are going to have that break come January 1."

She adds that, while most people would like to see some certainty for the coming year, any action at all right now would be welcome.

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