Merry Christmas and Social Security Tax Change

A week from today is Christmas, my how the year flew by. Merry Christmas to you and your family, enjoy the time and remember that the birth of Jesus is the reason for the season. This newsletter will be relatively brief and will discuss the change in the Social Security Tax in the recently signed tax cut bill as well as give some Christmas Facts.

Social Security Tax Change

The recently signed legislation called the tax cut bill or the extension of the Bush Tax Cut Bill has a provision to reduce the Social Security tax withholding from 6.5% to 4.5%. This tax is withheld twice, both from the individual and the employer unless you are self-employed they you pay both amounts. So the total tax is being reduced from 13% to 9%, for a total of 4% reduction.

The reasons for the change include an increase in the amount of take-home pay for people increasing consumer spending and to reduce business expenses so that businesses will hire people. This sounds great, it is always good to get more money. Unfortunately, some downside exists with this change.

Since the Social Security benefit payment that you get when you retire is based upon the amount that is withheld this change also reduces your future benefit. Having a reduced future benefit is a concern given the road of debt that our nation is driving down. My advice is to increase the amount you are putting in your retirement account next year by 2% and keep your retirement plan on track.

Christmas Facts

1) Each year, 30-35 million real Christmas trees are sold in the United States alone. There are 21,000 Christmas tree growers in the United States, and trees usually grow for about 15 years before they are sold.
2) Today, in the Greek and Russian orthodox churches, Christmas is celebrated 13 days after the 25th, which is also referred to as the Epiphany or Three Kings Day. This is the day it is believed that the three wise men finally found Jesus in the manger.
3) In the Middle Ages, Christmas celebrations were rowdy and raucous—a lot like today's Mardi Gras parties.
From 1659 to 1681, the celebration of Christmas was outlawed in Boston, and law-breakers were fined five shillings.
4) Christmas wasn't a holiday in early America—in fact Congress was in session on December 25, 1789, the country's first Christmas under the new constitution.
5) Christmas was declared a federal holiday in the United States on June 26, 1870.
6) The first eggnog made in the United States was consumed in Captain John Smith's 1607 Jamestown settlement.
7) Poinsettia plants are named after Joel R. Poinsett, an American minister to Mexico, who brought the red-and-green plant from Mexico to America in 1828.
8) The Salvation Army has been sending Santa Claus-clad donation collectors into the streets since the 1890s.
9) Rudolph, "the most famous reindeer of all," was the product of Robert L. May's imagination in 1939. The copywriter wrote a poem about the reindeer to help lure customers into the Montgomery Ward department store.
Construction workers started the Rockefeller Center Christmas tree tradition in 1931.