Obama Proposes One-Year Extension of Payroll Tax Credit (tax cut launched by President Bush 8-o )

CQPolitics on Yahoo ^ | 2/1/10 | CQPolitics

[NormsRevenge]

After years of debate about whether to extend the tax cuts launched by President Bush, the Obama administration now wants to extend a tax cut of its own.

Among the major tax provisions in the administration's fiscal 2011 budget is a one-year extension of the "Making Work Pay" tax credit, which was a critical part of President Obama's campaign platform and the 2009 stimulus law.

The payroll tax credit is set to lapse at the end of 2010; extending it for a year would cost $61.2 billion.

Obama has touted the tax cut's breadth, emphasizing at last week's State of the Union that it helped 95 percent of working families. Many may not have noticed, however: The $400 per worker, up to certain income caps, is being delivered through reduced paycheck withholding, not as a lump sum, in an attempt to encourage people to spend it instead of saving it.

Obama also is proposing to make permanent almost all of the tax cuts passed in 2001 and 2003 by Bush, except for those that benefit individuals who make more than $200,000 and married couples who make more than $250,000.

[b4its2late]

Smoke and mirrors.

[businessprofessor]

It is worse than smoke and mirrors. For low income workers, Social Security provides benefits that exceed value of employee/employer contributions plus a reasonable return. This credit is another form of welfare for low wage earners. The low wage earner is told that someone else will pay for his retirement.

[b4its2late]

True. So true.

[swmobuffalo]

But what they don’t tell you is that you’ll pay taxes and a penalty if you don’t meet the withholding standards. All this “tax cut” did was cost me money.

[cajuncow]

Schedule M as in messiah.