Democrats to Introduce Bill to Extend Payroll Tax Cut
WASHINGTON, D.C. (NOVEMBER 28, 2011)
BY MICHAEL COHN
Senate Majority Leader Harry Reid, D-Nev., said Monday that he plans to introduce legislation this week that would extend the payroll tax cut that is due to expire at the end of the year.
The tax cut extension would be offset with a surtax on millionaires, setting up a battle with Republican lawmakers who are opposed to any tax increases.
“This week we’ll introduce legislation that would give the economy a boost by putting money back in the pockets of middle-class workers and businesses by extending and expanding the popular payroll tax cut,” Reid said on the Senate floor Monday. “More than 120 million families took home an extra $120 billion this year thanks to payroll tax cuts Democrats championed. The average family held onto $935 more of their heard-earned dollars this year. (based on his usage off the “average” family salary being $46,750 ~ Joe Lania) We need to assure those families that they can rely on that tax cut next year as well.”
President Obama has also been campaigning for an extension and expansion of the payroll tax cut. The tax cut, which was enacted last December as part of the deal to extend the Bush tax cuts, cut the Social Security withholding tax rate for employees by 2 percentage points from 6.2 to 4.2 percent. As part of his jobs package, Obama has proposed extending and expanding the payroll tax cut by cutting it in half for employees, providing a $1,500 tax cut to the average family. (cutting the 6.2 social security tax on payroll to only 3.2% ~~ Joe Lania)
Obama has also proposed extending the tax cut to businesses, cutting in half the taxes they pay on their first $5 million in payroll, and completely eliminating payroll taxes for companies that increase their payrolls by either adding new workers or increasing the wages of their current workers, capped at the first $50 million in payroll increases. (how does this help Social Security, which we’re told is broke?? ~~ Joe Lania )
“This legislation does more than just protect the tax cuts Americans already count on,” said Reid. “It deepens and expands that tax relief as well. Next year, 120 million families will keep an average $1,500 because of this legislation. That means they’ll have more money to spend on necessities like gas and food, and will help spur economic growth in their communities. Business will also benefit from this tax cut. Ninety-eight percent of American business will see their payroll taxes cut in half on the first $5 million in wages they pay out. And firms that add workers will benefit from a full payroll tax holiday on their increase in wages.”
The payroll tax cut extension would be paid for with a 3.25 percent surtax on income over $1 million.
“A person who makes $1 million a year won’t pay an extra penny,” said Reid. “Someone who makes $1.1 million—an extra $100,000—will pay only $3,250 more.
Joe Lania: Must be an election year, for them to pull out all the stops, smoke & mirrors. We are told, and have been told this for years, that Social Security will be broke and unable to pay current benefits and NOW they are proposing cutting the social security taxes collected and ADDING more income taxes instead. Wasn’t there supposed to be some safe “lock box” for our social security? I imagine that concept was dead long ago. Only in the political world can you sell obvious shell games and people look up to you as heroes.
Joseph S. Lania, CPA
office (954) 432-2299