The fiscal cliff compromise predominately affects the wealthy, but one often overlooked aspect is getting more attention as workers of all pay grades are finding a few dollars missing from their paycheck, many not knowing why.
The answer is an increase to the Social Security payroll tax, which, in actuality, isn’t an increase at all; Congress simply decided not to renew a temporary holiday on the tax, which was cut from 6.2% to 4.2% for two years to encourage spending.
Lawmakers simply let the holiday lapse, a move that was widely expected and, as such, didn’t make many headlines. The tax also affects everyone, so, unlike other aspects of the resolution, like higher taxes for the wealthy, no one group stood up to fight it.
But now Twitter and other social networking sites are abuzz with complaints from workers who found their drinking money got pilfered. An employee who makes $50,000 a year is now taking home around $39 less per pay period, or roughly $1,000 less per year. If you’re self-employed, go ahead and double that number; employers contribute an identical percentage.
Will the end of the payroll holiday have a negative effect on hiring or the economy in general? Probably not, says Business Insider, but it sure makes payday a little less exciting.
Citi’s Corbat Risks Tunnel Vision (eFinancialCareers)
Citigroup’s new executive team is filled with company lifers. The structure provides the bank with what it needs most – continuity and control – but it also further insulates Citi from outside opinions and ideas, in what could be a dangerous move.
AmEx Cuts (Reuters)
American Express will cut roughly 5,400 jobs, mostly from its floundering travel division, as it seeks to cut costs and pay legal bills.
Suffering from Withdrawals (WSJ)
SAC Capital Advisors expects to lose roughly $1 billion in client funds this year as nervous investors pull their money amid an insider trading probe. The firm also announced it will close its Chicago satellite office.
Caps Are Coming (Bloomberg)
The European Union will move forward with its controversial plan to cap banker bonuses at twice their salary, despite pushback from the industry.
Tough Year (Bloomberg)
London hedge fund Clive Capital saw its assets decline by 46% in 2012 following back-to-back disappointing years. Commodity hedge funds had a generally difficult 2012.
Tips from a Pro (eFinancialCareers)
David Schwartz, a former director of recruitment at Goldman Sachs, has some suggestions on how to find a new job in the New Year.
Buzz Around the Office
Men are Pigs, Apparently (The Daily Mail)
Male jurors are significantly more likely to find a female defendant guilty if she is overweight. Or, putting it another way, they’re more likely to let skinny women off the hook. Female jurors showed no bias.
List of the Day: Angry Clients
Needing to deal with angry clients is never any fun. Here’s how to make things move a little smoother.
- Avoid misinterpretations that can accompany email. Use the phone.
- Listen more than you talk. Let them vent.
- Validate their concerns.
(Source: The Daily Muse)