Posted on 06/30/2011 1:43:08 AM PDT by Libloather
Ignoring liberal Dems, Obama endorses longer payroll tax holiday through 2012
By Mike Lillis - 06/29/11 03:56 PM ET
President Obama on Wednesday reiterated his push to extend an existing payroll tax holiday through 2012 – a move denounced by liberal Democrats who fear the reduction in revenues will undermine Social Security.
“I think that it makes perfect sense for us to take a look at, can we extend the payroll tax, for example, an additional year,” Obama said during a lengthy press conference at the White House.
The president said that strategy “puts money in people’s pockets at a time when they’re still struggling to dig themselves out of this recession.”
The remarks ignore the warnings from many liberal Democrats, who have argued for months that cutting the payroll tax will drain Social Security coffers and threaten seniors' benefits.
Republicans backed the tax break when it was included in a December deal, but House Budget Committee Chairman Paul Ryan (R-Wis.) more recently has criticized it as a “sugar high” for the economy.
On Friday, Democratic Reps. Lloyd Doggett (Texas), Ted Deutch (Fla.) and Mark Critz (Pa.) sent a letter to all House Democrats saying the proposed extension “should trouble all who care about preserving” the funding stream for Social Security.
“Social Security’s popularity comes from the direct contributions of American workers, who pay into the system now and benefit when they retire or become disabled,” the lawmakers wrote. “Unless and until faith in Social Security has been restored to the American people through long-range solvency, short-sighted cuts to the program’s revenue stream must not be part of any debt ceiling or budget deal.”
The letter is also being distributed to select House Republicans, Deutch spokeswoman Ashley Mushnick said Wednesday. The Democrats are also readying a similar letter to send to Obama.
In December, the White House and Senate Republicans carved out a deal to cut workers' payroll taxes from 6.2 percent to 4.2 percent through 2011 – part of a larger package to extend the George W. Bush-era tax rates for all taxpayers.
But the provision angered many liberal Democrats, who warned it set a dangerous precedent because taxes are easier to cut than they are to restore. The concern at the time was that anti-tax conservatives would lead the charge to extend the tax break beyond this year. Instead, Obama has adopted that position.
Sen. Charles Schumer (D-N.Y.) is also urging a one-year extension to the payroll tax holiday.
While the cut is just 2 percentage points – from 6.2 percent to 4.2 percent – it represents a real payroll tax reduction of 32 percent. For instance, a worker currently earning $100,000 should have paid $6,200 in payroll taxes for 2010 wages, but will pay only $4,200 for earnings this year.
The current tax holiday does not apply to employers, who continue to pay the 6.2 percent rate.
The Congressional Budget Office estimates the cut will reduce federal revenues by $112 billion over the next two years. Because the tax package is not offset by changes elsewhere in the budget, the government will have to borrow to fill that hole in the Social Security trust fund.
The president on Wednesday also endorsed “other tax breaks for business investment” he said would stimulate the economy and create “more jobs right now.” The White House has already floated the idea of extending the payroll tax holiday to employers, though it’s unclear whether Obama was referring to that strategy Wednesday.
That's kept me healthy, wealthy and wise.
Businesses and consumers are in the driver’s seat for the 2012 election. If businesses don’t hire and consumers keep their wallets closed, there is no way BO gets re-elected. Leftist states don’t have money to buy votes with give-away programs if the economy is still tanking and the federal government is broke.
Yeah...bring it on baby......cut and cut again....followed by more cuts.
reiterated his push to extend an existing payroll tax holiday through 2012"I have to win reelection -- after that comes 2013!" [crowd: Sieg Heil! Sieg Heil!]
Obama and all his socialist cheerleaders in the main stream media (NBC, CMS, ABC, CNN, NY Times, Washington Post, etc) begin all discussions about the economy with one premise in mind:
THAT THE MONEY YOU EARN FROM YOUR HARD WORK BELONGS, NOT TO YOU, BUT TO THE GOVERNMENT!
They believe that the government is being very generous in allowing you to keep some of your hard earn money.
IS THIS WHAT YOU BELIEVE ABOUT HOW THE FREE MARKET SYSTEM IS SUPPOSED TO WORK?
No more taxes…Not one single penny more to the government which is sucking money that you earn out of the economy where it could be used to create jobs.
Let’s add one more name to the unemployment rolls – OBAMA’s
14 million Americans are out of work and the country is drowning in debt; everything the dems do undermines SS.
After all SS is a program that (like Medicare) has working people pay in advance for benefits in the future. And while the formula has fell out of balance (with people collecting more than their payments could ever cover) it is still not a something-for-nothing welfare benifit program that Marxists favor. Those are the programs like Medicaid, ADC, SSI, welfare assistance, etc were recepients have contributed nothing and are wholly dependent on government largess and leftist politicians like Obama and his Democrats.
Is he talking about the lousy 2% social security tax that they give employees a break on? It certainly isn’t helping “small” business as we still have to “match” that at the 6.2%!! If they wanted to help small business, they would have lowered the employers’ match too! I’ve never heard anyone talk about this!
THIS IS HORSE$HIT
There is no tax ‘holiday’
They only REDUCED THE RATE OF WITHOLDING
You still owe the same amount of tax, they just take less out of your paycheck each week to apply towards it.
Big funny when income tax time comes around and you OWE instead of your usual refund
I have a dumba$$ brother who actually said to me “I don’t pay taxes- I get a REFUND every year” - he is actually too stupid to know he pays a lot, and gets only a portion of it back.
Some real screaming is not that far down the road, When the 10- 12 yr olds find out that they are working to fund SS and maybe free health care for burned out liberals untill they die.
However, Social Security will go bust that much faster. Prompting me to remember "Never let a good Crisis go to Waste" - The Emanuel Doctrine.
Obama is creating a Social Security crisis that he intends to blame on the Republicans.
Beware!
This reduces the FICA (Social Security) tax that workers pay.
It does not affect the income tax workers pay through withholding or any refund they would get.
Rather than maintain the deduction, the 2% should be collected but invested in one of many index funds selected by the worker.
The injection of real capital into America would provide a real economic stimulus. An investment of 2% compounded could very well save Social security all by its self.
You just gotta love public education! /sarc
You nailed it.
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