(CS Monitor) Payroll tax cut: proposals galore but consensus eludes

Posted by Kendall Harmon

The Obama White House, in its own version of the New Year’s Eve countdown in Times Square, has added a banner to its website – a clock ticking down the seconds to when taxes on the middle class will rise “if Congress doesn’t act.”

That tax hit is the 2 percent payroll tax cut now set to expire at midnight, Dec. 31. If Congress fails to at least extend that tax cut, the Social Security tax rate for employees jumps back to 6.2 percent, up from 4.2 percent. If that happens, the average American taxpayer stands to lose about $1,000 in 2012.

Leaders on both sides of the political aisle in Congress offer assurances that by year’s end the tax break will be extended. As lawmakers head into an election year, the stakes are simply too high to kick that can down the road. But GOP leaders, especially, are running up against strong opposition from the rank-and-file on anything that looks like caving on pledges to reduce deficits, dramatically cut spending, and reject all tax increases (which are an issue in this case because Democrats propose to pay for extending the payroll tax by a tax hike on millionaires.

Read it all.

Filed under: * Economics, PoliticsEconomyLabor/Labor Unions/Labor MarketTaxesThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--The U.S. GovernmentBudgetThe National DeficitPolitics in GeneralHouse of RepresentativesOffice of the PresidentSenate

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Posted December 8, 2011 at 5:15 am [Printer Friendly] [Print w/ comments]
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