This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Will More Jobs Mean More Taxes?

By John CarneySenior Editor,

NEW YORK ( CNBC) -- The better-than-expected jobs numbers released Friday may mean rising taxes for many workers.

January saw 247,000 new jobs added to the economy. Unemployment fell to 8.3 percent.

The stronger numbers may make federal lawmakers reluctant to extend the payroll tax cut. A Capitol Hill agreement late last year extended the tax cut through the end of February. If not extended, the tax cut will expire on Feb. 29.

More from CNBC
Unemployment Rate Drops to 8.3%
Jobs Up, but Small Business Survey Reports Little Gain
A Chaotic Start to the Week for Greece

President Obama and Congress struck a bipartisan deal that reduced the Social Security [cnbc explains] payroll tax to 4.2 percent in 2011 from 6.2 percent. Nearly 160 million workers benefit from the tax cut, according to the Internal Revenue Service. This means that workers pay a smaller amount in taxes without a reduction in their future Social Security benefits.

The tax cut was intended to provide relief to workers and stimulate the economy, although there is some question about whether it has been effective. Some economists believe that workers are unlikely to increase spending when tax cuts are known to be only temporary.

If lawmakers conclude the U.S. economy no longer requires stimulus from a payroll tax cut, they may decline to extend it beyond the end of February.

In December, House Republicans resisted a two-month extension of the tax cut that had been passed by a bipartisan agreement in the Senate.

After taking a lot of political heat for threatening to end a deeply popular tax cut, House Republicans agreed to an extension intended to give lawmakers time to negotiate a longer-lasting extension.

--Written by John Carney, Senior Editor,
CNBC is a world leader in business news, providing real-time financial market coverage and business information.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.90 0.17%
FB $117.75 0.14%
GOOG $698.21 0.75%
TSLA $238.50 -0.94%
YHOO $36.53 -0.19%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs