How a reduction in the payroll would affect your salary

President Donald Trump has been considering reducing payroll taxes for part of this week. "I had been thinking about social security for a long time," he told reporters. He then returned on Wednesday to inform the same reporters: "I do not think of a tax break now," he said. "We do not need it. We have a strong economy. "

But look, this guy changes his mind more than a tough eater trying to decide what to eat for lunch, so let's see what he could have tried to do with your payroll taxes. I am sure we will have to revisit this issue soon enough.

A reduction in payroll taxes reduces the amount of tax collected at one of two locations: social security or health insurance. When you receive your paycheque, 6.2% have been deducted from the social security tax. Your employer also pays 6.2%. Any income you earn over $ 132,900 is not subject to the Social Security Tax.

For the Medicare tax, employees and employers each pay 1.45%, with a surtax of 0.9% for individual salaries over $ 200,000. If you are self-employed, you pay the combined 12.4% social security and 2.9% Medicare taxes.

When the Obama administration reduced payroll taxes in 2011 and 2012 to stimulate the economy after the recession, the share of the social security contribution paid to employees was reduced to 4.2% and the share employers remained unchanged.

How much will you save with a reduction in payroll taxes

If President Trump were asking for a payroll cut this year, most full-time employees would save about $ 908, according to Kelly Phillips Erb of Forbes. According to her, the highest-paid people could save up to $ 2,658 through such a reduction in payroll.

However, even if you get a little more security in your paycheck, a reduction in payroll taxes could cost the government up to $ 300 billion while the deficit is already accentuating and should widen further.

Congress is expected to approve any payroll tax changes, and CNBC's Eamon Javers said Congress's chances of supporting a reduction in the payroll are "south of zero".