Sweet & Sour

When most Americans cast eyes on their first paycheck of the new year, shudders flashed down their backbones straight to their wallets. To help offset higher benefits and the new medicare program, the social security withholding nick in take-home pay went up from 3.625% to 4.2% on Jan. 1. As a result, a man earning $100 a week saw his paycheck shrink 58-c-. The $10,000-a-year man's first weekly take-home was down by $1.19.

That 4.2% slice comes out of every paycheck until the wage earner has paid the legal maximum of $277.20 ($103.20 more than last year). Thus the more a man makes, the bigger will be the amount withheld from his paycheck at the rate of 4.2% but the sooner the bite will end for the year.

Costly Shows. Jan. 1, 1966 also brought some tax sweets along with the sour--at least in theory. In the second stage of a long-term Government rollback on excise taxes, cuts from .04% to 20% went into effect on items from stock transactions to club dues. The first cutback, effective last July 1, influenced such merchandise as furs, jewelry, leather goods and photographic equipment. According to government studies, manufacturers in their pricing passed 90% of the benefits of that $1.8 billion cut along to consumers. This year's cutbacks, which will cost the Government $1.6 billion more in lost revenues, may not get back to the consumer so easily.

This applies especially to the entertainment industry. The 10% excise tax on nightclub bills and on admissions to plays, movies and sporting events has been repealed--but the customer will find little difference in the price of tickets. The Broadway theater owners are an exception--orchestra seats for Hello, Dolly! will drop from $9.90 to $9.10, for Golden Boy from $9.90 to $9.50. But most entertainment types will be like the Pittsburgh movie-theater manager who moans, "It's been a hard go for us with TV and all." What he means is that he is keeping the price the same and pocketing the 10% cut. The repeal of the 20% admission tax at race tracks will mean a drop from $4 to $3.50 at Maryland's Bowie Race Course, but there will be no change in the $2 general-admission fee at Long Island's Roosevelt Raceway.

Cheaper Wires. The customer will get a few breaks. American Telephone & Telegraph estimates that phone users will save $740 million over last year. The phone-call tax has been cut from 10% to 3%. Thus the $1.10 maximum price on long-distance calls anywhere within the U.S. after 8 p.m. will drop to $1.03. Also to be passed along are the 10% excise cuts on telegrams and the minuscule .04% to .11% saving on stock and bond transfers, which for all its smallness will still amount to $75 million for the consumer.

This file is automatically generated by a robot program, so reader's discretion is required.