Friday, January 27, 2012

No, Not Again – Congress to Have to Vote on Extending the Payroll Tax Reduction for the Rest of 2012

Maybe They Can Pass a Tax Cut That Lasts Longer Than Two Months This Time – Or Maybe Not

At the end of 2011 the Congress could not agree on how to continue the 2011 payroll tax reduction and so they voted to extend it for two months so they could have time to figure it out.  In a development that is surprising to most members of Congress, the two months is actually coming up, and so the House and Senate must address the issue.  If they don’t the tax cut expires and payroll taxes go back to 2010 levels.

Since the temporary measure for the temporary tax cut passed there has been no change in the positions.  Everyone agrees they want to continue the tax cut, but how to do so still leaves everyone apart.

Democratic and Republican negotiators plunged back into the debate at their first public meeting Tuesday, offering diverging ideas over how to pay for the extensions—estimated to cost about $160 billion in total—as lawmakers embraced familiar proposals that failed to garner widespread bipartisan support last year.

Here’s what the Democrats propose

Democrats again pushed for paying for the extensions with a surtax on annual incomes over $1 million—an idea that met stiff opposition last year from many Republicans.

"Fairness calls on us to ask those who have done the very best in the last years and decades to contribute a little more toward fiscal responsibility," said Rep. Sander Levin (D., Mich.), the top Democrat on the House Ways and Means Committee, echoing comments made earlier Tuesday by Senate Majority Leader Harry Reid (D., Nev.). "A fair way to do that is through a surtax on income over a million dollars."

And here is the Republican response.

Republicans immediately countered that this would punish those capable of creating more jobs.

And guess what, everyone now has some information on a millionaire and the taxes he pays.  We now know that Mitt Romney made $20+ million in 2010 and paid about 15% in taxes, including payroll taxes (If you argue that employees pay both the employee and employer share of payroll taxes it means Romney pays a lower tax rate than every worker who makes less than $100,000 a year).  But even more, we know how many jobs multi-millionaire Mitt Romney created last year

Zero, None, Nada,

So how many jobs will not be created if Mr. Romney’s taxes rise slightly to pay for a payroll tax cut for workers whose tax rate is higher than Mr. Romney’s?

Zero, None, Nada,

See, that wasn’t such a hard question, was it?

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