Skip to comments.Payroll Tax Holiday: Temporary from the Beginning
Posted on 01/13/2012 12:39:02 PM PST by 92nina
In December 2010, Congress enacted a 2 percentage point payroll tax reduction, bringing the FICA rate down from 6.2 percent to 4.2 percent as a part of the legislation extending unemployment benefits and preventing tax rates from rising. All throughout the debate Democrats billed the reduction as a temporary move, slated to expire on December 31, 2011. Congress is considering whether to extend this rebate. Because it was always a temporary measure, opposition to this extension cannot fairly be called support for a tax increase. There is ample evidence that Democrats always believed the payroll tax rebate to be temporary.
In addition, the record bears a number of statements by prominent Democrats indicating their original intention for the tax to be temporary.
Well, let me say a few things. One, if Im not mistaken, the commission had a payroll tax cut in their proposal. Two, this is not a long-term -- this is not a -- by definition, a long-term plan. This is an agreement to -- basically tax policy for the next two years. Former White House Press Secretary Robert Gibbs, WH Press Briefing, December 14, 2010
This bill is going to breathe life into the private sector through a payroll tax reduction of 2 percent for 1 year. Sen. Bill Nelson (D-Fla.) speech on the Senate Floor, Wednesday, December 10, 2010
This agreement would also mean a 2 percent employee payroll tax cut for workers next year -- a tax cut that economists across the political spectrum agree is one of the most powerful things we can do to create jobs and boost economic growth. President Obama, December 6, 2010, Statement by the President on Tax Cuts and Unemployment Benefits
Some top Democrats appear less concerned that any push to extend the tax cut would be successful. Rep. Barney Frank (D-Mass.) said the Democrats' message in favor of allowing the tax holiday to expire would be simple: "That it's necessary to save Social Security." Asked if Democrats will be successful capping the tax holiday at one year, Frank responded with one word: "Yes." December 26, 2010 The Hill article by Mike Lillis entitled Republican leaders say there are no plans to extend payroll tax holiday.
Read more: http://atr.org/payroll-tax-holiday-temporary-beginning-a6685#ixzz1jN72JR4I
Last year millions of Americans like me got a tax credit called the Making Work Pay Tax Credit (Schedule M). I discovered last week that there is no more Making Work Pay Tax Credit for 2011 tax returns. The amount of the tax credit was close to the amount I save on the 2% FICA payroll tax reduction. What the government gives with one hand, the government takes away with the other. I have not seen any news stories regarding this manipulation.
Had not heard about that detail...this is what makes FR so great, getting often ignored stories. Thank you for letting me know about that detail.
As for the Making Work Pay Tax Credit, my guess would be that folks using the 1040-EZ probably wouldn’t be looking around near it.
All I know is that I’m cashing in, BIG TIME, thanks to this tax cut, so I could care less if the country goes broke.
(my imitation of a Social Security recipient)