Payroll tax cut means you save
President Trump announced last week a stimulus idea to help workers during this new coronavirus outbreak.
Here’s what economists say it will mean to your weekly paycheck:
Take your salary and deduct 2% — that’s your tax savings. If you earn $50,000 a year, and get a 2% payroll tax cut — that’s about $1,000, or one week’s wages.
The cost of a payroll tax cut or holiday would depend on how much of the tax is rolled back and for how long. A 2% cut for employees, as President Barack Obama did, cost $150 billion in government revenue over a year and $300 billion if the employer portion had also been cut, according to Bloomberg data.
Today’s payroll tax rate is 15.3%, with 12.4% of that going to fund Social Security and 2.9% to fund Medicare.
Social Security’s 12.4% portion taxes up to $137,700 of wages in 2020, split evenly between workers and employers. The Medicare payroll tax is 2.9% on all wages, split evenly between workers and employers, plus 0.9% more on top earners.
Future of Hara property
There was good news last week for the Hara Arena property where most of us in the Miami Valley grew up going to watch concerts and sporting events.
Reporter Thomas Gnau wrote that Trotwood council rezoned the property for industrial uses. The large property will make a good site for a future warehouse or manufacturer.
Michael Heitz, the developer of the Hara Arena property, told us demolition of about two-thirds of the tornado-damaged property should begin in the next month.
Heitz told us he expects JobsOhio, the state’s private jobs creation arm, to put its marketing muscle behind the 130-acre site, to help him find a future user.
The arena closed in 2016 after serving as a performance and event space for more than 50 years.
Parts of its roof and exterior were ripped off by an EF4 tornado that tore across Montgomery County on Memorial Day last year. Drivers on Shiloh Springs Road today can still see exposed framing and piles of debris. The tornado did $7.5 million in damage to the property, according to insurance records.
What do you think the property should be turned into?
Fifth Third under investigation
The Consumer Financial Protection Bureau filed a lawsuit last week against Fifth Third Bank, alleging the bank’s employees opened fake accounts for customers in order to meet aggressive sales targets.
The federal regulator alleged the bank knew its employees were opening fake accounts since at least 2008 and up until 2016, the same year that Wells Fargo admitted its own employees had opened fake accounts to meet aggressive sales goals. Wells Fargo WFC was forced to pay billions in fines and penalties for its bad behavior.
The CFPB alleges that some of the fake Fifth Third accounts were actually funded, meaning bank employees moved money from a customer’s existing account to their new one, without their consent. Fifth Third’s sales program required the accounts to be funded, so once the employee was credited for the sale, the money was moved back.
Moving money without a customer’s consent is a violation of the Truth in Savings Act, according to the CFPB.
In a statement, Cincinnati-based Fifth Third said the CFPB’s lawsuit was unnecessary. The bank said it had already investigated the allegations and found 1,100 accounts were opened fraudulently out of 10 million existing accounts and the amount of financial damage caused by these employees was less than $30,000.
“When a federal court examines the evidence, we believe it will agree with Fifth Third that this is a limited and historical event,” said Susan Zaunbrecher, chief legal officer of the bank, in a statement.