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Valley Metro LogoPhoenix-area voters on Tuesday approved a comprehensive transportation plan that would significantly increase public spending on light-rail and other transit projects, city officials announced yesterday.

According to unofficial results, nearly 55 percent of voters approved the measure known as Transportation 2050. 

Listed on the ballot as Proposition 104, the plan calls for a 0.7 percent sales tax that would fund the construction of an additional 42 miles of light-rail throughout the city, late-night bus and Dial-a-Ride services, and the repaving of more than 680 miles of streets, according to a press release from the city.

Read more from Progressive Railroading.

Railroad Retirement, Social Security, Medicare and Railroad Unemployment Insurance payroll taxes have changed for 2011.

Following are the tax rates:

 Railroad Retirement Tier I:

  • Paid by employer: 6.20% on wages up to $106,800.
  • Paid by employee: 4.2% on wages up to $106,800.

Social Security (non-railroad employment):

  • Paid by employer: 6.2% on wages up to $106,800.
  • Paid by employee: 4.2% on wages up to $106,800. 

Medicare (railroad and non-railroad employment):

  • Paid by employer: 1.45% on all wages (no cap).
  • Paid by employee: 1.45% on all wages (no cap).

 Railroad Retirement Tier II

  • Paid by employer: 12.1% on wages up to a $79,200.
  • Paid by employee: 3.9% on wages up to $79,200.

 Railroad Unemployment Insurance:

  • Paid by employer: 3.15% on wages up to $15,960.
  • No tax on employee.

 

The 2 percentage point reduction in payroll taxes for railroad workers covered by Railroad Retirement, and bus and aviation workers covered by Social Security, will NOT have a negative impact on either the Railroad Retirement or Social Security trust funds, as has been wrongly alleged by some.

Beginning Jan. 1, all workers will see an increase in their paychecks as a result of Railroad Retirement and Social Security payroll taxes being cut from 6.2 percent to 4.2 percent. The purpose of the tax cut is to stimulate the economy through consumer spending that will snowball into increased demand for products and new hiring by employers.

For workers earning $50,000 annually, the additional take-home pay from the reduced payroll taxes will be some $1,000 in 2011. For those earning the maximum Social Security and Tier I Railroad Retirement taxable income, the additional take-home pay will top $2,000 in 2011.

The payroll tax deduction will NOT have a negative impact on the Railroad Retirement or Social Security trust funds because the legislation provides that the shortfall in the trust funds — as a result of the payroll tax cut —  will be made up by a contribution to those funds from the U.S. Treasury’s General Fund.

The legislation is absolutely clear on this point. In Section 601(e) of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010,
it is stated:

“There are hereby appropriated to [the Social Security Trust Fund] amounts equal to the reduction in revenues to the Treasury by reason of the application of [the payroll tax cut].”

This was confirmed by the Railroad Retirement Board, which advises that the payroll tax-cut legislation “provides for the transfer of money from the general fund to the Social Security Equivalent Benefit Account, one of the trust funds from which the Railroad Retirement Board (RRB) pays benefits, in an amount equal to the revenue lost due to the reduced payroll tax rate.”

Separately, the Social Security systems chief actuary, in a Dec. 10 letter to Treasury Secretary Timothy Geithner, said, “The law specifies that Social Security will receive every dollar it would have gotten even without the payroll tax cut.”

And AARP Executive Vice President John Rother said in a press release that the payroll tax cut “has no financial impact on Social Security because the trust fund is made whole.”

Said President Obama in signing the legislation: “Social Security is a sacred compact that in return for a lifetime of hard work, America’s seniors will have a chance to retire with dignity. We have an obligation to keep that promise and safeguard and strengthen Social Security for seniors, people with disabilities and all Americans, both now and in the future.”

Railroad Retirement payroll taxes will remain at 2010 levels in 2011, reports the Railroad Retirement Board.

For Tier I, carriers and employees each will pay 6.20 percent on a maximum of $106,800 of wages.

For Medicare, carriers and employees each will pay 1.45 percent on all wages.

For Tier II, carriers will pay 12.10 percent and employees 3.9 percent on a maximum of $79,200 of wages.