Aftermath of Proposed Tax Cut Plan: What to do with Payroll Tax Cut

Part of the proposed tax cut plan outlined by the Obama White House earlier this week included a provision to cut the payroll tax two percentage points from 6.2% to 4.2% just for 2011.

The tax benefit tops out at $2,100 per year for anyone making $106,800 or more, so this tax cut serves as a small stimulus into the pockets of all Americans. The federal government would love for you to stimulate the economy with that money: spend on presents, spend on vacations, spend on dining out.

But I asked myself yesterday the same question many people are asking themselves as this proposal makes its way through the halls of Washington: What should I do with the money?

I ran across an article in the Personal Finance section of The Wall Street Journal (www.smartmoney.com for those who don't know) that answered that exact question.

The article offered several financially-beneficial, worthwhile ideas such as: juice up retirement savings (we at The Slott Report love that idea!), create a "health-care kitty" (read the article below for a full explanation), and upgrade appliances.

CLICK HERE to read the article in full and post a comment in the section below to offer your suggestions on how to spend the payroll tax cut.