If what i hear is correct we will have to pay taxes on it at the end of the year, because it is income, something to do with tax deferment, not tax cut.
could be wrong that is what i hear.
Hmm. I need to look into this a bit more. Paying taxes on it at the end of the year by treating it as income is a very different situation than what was mentioned earlier (namely, that you'd owe it back directly AS taxes, not taxes on it).
If you you end up owing taxes on it at the end as income, then you do end up with a net gain, but not $8/week. In that case you'd only be really keeping a percentage of the $8 based on annual yearly income, and then you'd owe part of it back. If the $8 is a straight reduction in the standard withholding and it's not counted separately from your other income, then essentially it would be owed back in the exact same amount at the end of the year (assuming that the withholding was exactly correct prior to the $8/week reduction, but that's an assumption that is virtually never true).
It's kinda like how you are supposed to pay Federal taxes on last year's State Income Tax Refund (if you received one) if you itemized during the prior year. Yep, you pay taxes on the excess taxes that were returned to you :S.
Tax law will drive a person insane. Sadly I have to work with this type of stuff nearly every day (though for property taxes, not income - I administrate the property appraisal systems at a county-level and write/maintain the software the has to move it from the appraisal system into the tax system).