in fact, this may be the high point for the entire year. this may be as good as it gets because all kinds of tax increases are beginning to bite. we have the social security tax increase january the 1st. tax the rich, january the 1st. state taxes went up notably in california. then we ve got the sequester cuts. all of this is taking money out of the economy and it will reduce the growth rate for the rest of the year. economists are basically saying our spring hopes have been dashed yet again. third year in a row. not good numbers today. martha: what s the market reaction likely to be to this? and you know, is it a sign because no doubt the administration will feel pretty good about this number and they will have an argument that it is a part of a real recovery. that we just have to be patient. that some of the numbers are improving. the housing numbers are improving. that s my guess that is what they would likely say in response. two points. you asked how the market
your just like property taxes, you re clear about what they re paying for. with the payroll tax, we know what it s paying for, but i feel there s an obscurity around it. i have to say coming from a working class household, i didn t know that high incomes capped out. i didn t know there was a point at which you stopped paying payroll taxes. you know, the first time i ever earned enough, it was in a november, i was 32. i was like, my check is too big. it should be smaller this month. you re a rare bird. i had no idea that it felt to me like this seemed like the easiest tax base solution. everybody pay all year. consistent with that, the social security administration says if we raise the social security tax to 7.65%, we ll close the gap. so we know that the social security trust fund will top out in 2033 and this will close the fund. there s support for that. the backlash is always, well, we ve got to reform it now.
guess what? we re seeing that slowdown right now eric. right. let me just jump in here the middle class americans with the social security tax that went up. that means less money for people to go out and eat out. i m talking about the average wayne-earner help has $10,000 more in taxes this year there goes the gardeners, the maid, and now when less in my own situation in my own company, we lost a person this year attrition. we re not replacing that person because i don t know what have to deal with, with obamacare. i have to make sure i protect my other employees because they get private insurance so we know what it is, and if it was sequestration, sequestration was mr. obama s idea. so one way or another why doesn t the president take credit for what is happening and give us some leadership to turn it around? craig you hit on it earlier in the answer.
that we have. we just got personal data and consumer spending data today. in february, better than expected. the first couple months, the flow of economic data relating to the consumer has been better. home sales up. auto sales up. you see the green arrows there. all going in the right direction. now, throws being fueled by the fact that more people, we have two million more people working today than there were this time last year. housing prices are up which makes people feel more wealthy. the stock market at record highs. and those people are outweighing the fact that we re all losing $50 or so every couple weeks to our paychecks. to this higher social security tax. and in addition, higher capital gains, higher income taxes on the very wealthy. and the owncare tax, we were told the rich would stop investing. if you look at what s happening on wall street, they seem to be investing plenty. dan gross.
house, this president, the democrats in congress, what then is the number? what is the number you want? they won t answer. bill: they want everything. restaurants in the u.s.a. people dining out less. is this a pure don t have any money play? what is this? cut in disposable income. brought to you by another tax. that is the tax holiday, the payroll tax holiday that ended with the fiscal cliff is brought back and that is, according to the restaurant industries the reason that they have seen a sizeable fall. bill: like 7.5% rise. what was it it the payroll tax reinstituted to what? took 2% off of gross income. bill: 2%, i m sorry. it s 2% and you say that s inhibiting people from eating out. that s what the restaurant association is saying. and they are right. they are looking at same store sales and they re off by 3 to 5%. bill: all right. so it correspondence with the social security tax. exactly.