Skip to comments.GOP May Block Payroll Tax Cut Extension That Obama Claims Could Save Up To 1 Million Jobs
Posted on 08/22/2011 6:45:17 AM PDT by blam
GOP May Block Payroll Tax Cut Extension That Obama Claims Could Save Up To 1 Million Jobs
Aug. 22, 2011, 9:32 AM
The Associated Press reports that congressional Republicans are considering allowing the payroll tax cut to expire at the end of the year a move President Barack Obama says could cost up to 1 million jobs.
The tax, which funds Social Security, now stands at 4.2 percent for employees for 2011 down from 6.2 percent and GOP lawmakers, worried by rising deficits and the nation's booming debt, are gearing up to block extending the reduced rate through next year. The employer contribution remains at 6.2 percent.
"It's always a net positive to let taxpayers keep more of what they earn," said Rep. Jeb Hensarling (R-TX), "but not all tax relief is created equal for the purposes of helping to get the economy moving again."
But their worry about debt and deficits did not prevent the lawmakers from demanding the continue the Bush tax cuts on wealthy Americans if they were to be extended for those with lesser incomes.
The payroll tax cut most benefits employees making less than $106,800 a year including those whose incomes are so low they pay no income tax, but still have their payroll tax withheld from their paychecks.
Earlier this month Obama said Congress failing to extend the tax break and unemployment benefits "could mean 1 million fewer jobs and half a percent less growth."
Neither Speaker of the House John Boehner (R-OH) or Senate Minority Leader Mitch McConnell (R-KY) has taken a public position on the issue.
Obama says, the extension of the payroll tax cut would bring the average American family an additional $1,000 each year
(Excerpt) Read more at businessinsider.com ...
A million jobs here, a million jobs there, and pretty soon we’d be talking about full employment. /s
When Obama pulls a number like “1 million jobs” our of his rear end the Republicans should counter with an imaginary 2 million jobs from one of their initiatives.
Times about 30!!!
Actually, the “payroll” taxes are essentially a flat tax. It may be a good thing to have more than 50% of America paying some kind of (effectively an) Income Tax. Skin in the game and all. It’d be good to eliminate the “hidden” part “paid” by employers and make it an explicit deduction to help folks understand the total theft rate of the US Government.
"Gosh, Beav, ya big goof. The AP is nothing more than a propaganda arm of The DemocRAT Party and will do or say anything that makes Republicans look bad so-as to improve President Obama's chances of getting re-elected. Ain't they teachin' you nuthin' at school?"
Obama’s numbers may be totally bogus, but as a political issue for 2012 this is playing into the Democrats claim that the GOP only wants tax breaks for the wealthy and don’t care about anyone else. Leave the tax cut in place until the economy turns around.
The GOP (Ghost Of a Party)need to noisily block something.
All these cruds went to the same, Stalin School of Economics.
As I have posted many times this is the stupidest tax cut that creates no jobs and just leaves SS funded by issuing more US debt. But what is Republicans argument for opposing this handout going to be since they support the myth that SS is fully funded by a trust fund?
Yes the FICA tax cut is a handout because those getting it are still entitled to SS upon retirement,and many getting it pay NO Federal income taxes at all , and so far no-one in congress has challenged this. .
Sorry, I have to agree with 0bamao on principle with this one.
We are TAXED ENOUGH ALREADY!!!
The correct conservative response is NOT to raise taxes, but to CUT SPENDING!
Of course, 0bamao has no intention of cutting spending, but I agree with him that we should not raise taxes.
Let the pressure to cut funding build. They will eventually have to do it.
It is like the money Clinton kept finding all over the different budgets.
Yeah, because we have like forever to get the deficit under control before the US treasury has to default, all paper assets become worthless, martial law is declared and the ensuing civil war starts.
The GOP should counter by doing away with the extension and make it permanent. So the democrats can’t use it as an issue again. That’ll shut them up and the people get to have more money in their pocket permanently.
It isn’t going to help the already unemployed one bit.
I should know.
“I agree with him that we should not raise taxes.”
It’s only restoring the employee pension contribution that should never have been reduced!
Tax the shit out of the poor, they are the ones consuming the taxes!
The GOP is on solid political ground by blocking this scam.
“...many getting it pay NO Federal income taxes at all...”
Except for FICA of course. But that’s NOT an income tax. It’s a payroll tax. And the difference to someone paying it is...?
The simple way to say this is that if the employees get the tax cut and the employers don’t, there’s no incentive for employers to create more jobs. Yes, the employees have more revenue to spend in the marketplace which might cause more economic churn, but it isn’t one that incentivises the employers to do anything.
Truth is that employers aren’t hiring for 1) fear of another recession and 2) fear of all the ObamaCare red tape that is coming. That’s why unemployment has been largely stagnant because government (largely Dems) refuses to remove those fears.
That argument plays into Democrat Talking Point #2, as laid out in the article itself: "But their worry about debt and deficits did not prevent the lawmakers from demanding the continue the Bush tax cuts on wealthy Americans if they were to be extended for those with lesser incomes."
A case can be made that the payroll tax should never have been reduced to begin with, not for the reasons given. But now that has been, refusing to continue the cuts will play only to the Democrats benefit.
The only thing I can guess is that we are using it as a negotiating chip for later battles.
What most of the working-class doesn’t understand is that the working-class will pay no matter what taxes are divvied out. If the rich pay more, then the working-class makes less. If the rich pay less, then the working-class makes more. It’s as simple as that.
“Actually, the payroll taxes are essentially a flat tax.”
If it was a flat tax, somebody making $300K would pay 3 times as much as someone making $100K. But it’s not, is it?
I have to disagree, People that pay NO Federal income taxes and reduced FICA (SS) taxes and are still entitled to SS benefits ARE NOT OVERTAXED when the current benefits are being paid by issuing new US debt to make up for it.
Please see : #11
This is just another popular handout that increases the chance that those 50% that do pay taxes will have to pay more in the future.
“I don’t understand why we are blocking this. It helps play in to the notion that the GOP only cares about the rich.”
Maybe the GOP only cares about the rich.
The payroll tax has been cut for a while and I don't see those Grey Panthers inflamed much. But when people's paychecks go down by 2% on January 1st and the Democrats can say "We tried, but the Republicans blocked it" then I think we'll see a whole other group of inflamed individuals.
There is no way the GOP can block this extension and then argue to extend the current rates on the top two brackets. The GOP should push for spending cuts as an offset but need to be out front that they don’t want any tax rates going up from there current levels.
Exactly. The tax break is on the wrong side, but we couldn’t have greedy employers getting a tax break now could we.
talk about handing talking points to the commies AND throwing away what little leverage they had...
its to a point where neither side does anything right... even an idiot tends to get something right occassionally, just by statistical coincedence, unless of course its all going according to 'plan'...
ropes and pitchforks ??? anybody ??? or are we gonna just hafta wait in our holes to be slowly smothered under the pillow of fedzilla ???
FICA tax is what allows Americans to demand their SS benefits under the argument that ;"I paid in". But now many that pay no income tax are not even being forced to pay that FICA/SS Federal tax, yet being told that they are still entitled to SS by both parties.
Those people you reference are the first to claim 'they paid in' and that taxes should be raised on the rich to make sure they 'get it back'.
Let it go and cut the federal income tax.
No, In the end they will be the same as the GWB and Obama party, the ‘have your cake and eat it too’ party.
Yes, now YOU are entitled to SS benefits without paying the FICA taxes. Yes Virginia their is a free lunch. And lets demand even more since it is obviously free.
And what about the growing deficit (which current SS benefits adds to) making up for the FICA tax cuts ? Since the the freeloaders are being told they ‘paid in’ anyway, you know what they they will say when asked where to get the money for that....Guess,
I agree! But just try to convince people that they themselves are paying that hidden part. The masses truly believe their employer is paying half their payroll tax and also paying for their unemployment insurance.
You the employee are paying ALL the costs of your employment plus a little more as profit for the company, otherwise you would not have a job.
I think if people truly understood how much government takes from them we would have replaced the government several times by now.
It is stupid to cut it and then borrow the money from China to put it back in the general fund. Only a moron would see that as a sound policy.
This is simply more Class Warfare by the Marxist Regime...
At a minimum Republicans need to make some demands in return for extending these, keep in mind the REAL TAX CUTS expire in late 2012 after the election. Those are real tax increases.
I would leave the reduced rate of 4.2% but would remove the wage limit. In fact, may even go so far as to reduce both the employer AND employee percentages while removing the wage limit.
the WH is trying to prevent another barganing effort by republicans. “too important to cut a deal” BS.
The republican can force Obama’s hand even more.
And raising tax rates, which may or may not actually increase revenue, is the only answer you see towards getting the deficit (and debt) under control and preventing a default?
This is not really a tax cut~!!!!!!!!!!
This is ONLY a reduced rate of witholding- your tax burden remains the same- you only get a smaller refund at the end of the year
I agree. Let’s not fumble the political football for a single first down and lose the game. Hang in there for another year and keep the outcome in focus.
I always try to owe as much as I can without incurring a penalty....Getting a refund means that you gave the government an interest-free loan.
In a real world SS benefits would have been cut to match the FICA tax cuts, But there is no way Republicans are going to go near that, even Jim DeMint is claiming SS is funded by a trust fund.
Even the ‘brave’ Ryan Medicare plan delayed any cuts to medicare for 10 years so they could tell all voters over 55, ‘Dont worry about the deficit, we have your medicaid bills covered and those younger than you even by a single day can pay the full price of your med bills while being out of luck themeslves, so support us”
BTW, it didnt work. that 10 year gimmick didnt work. How could it?
Agreed. This is a terrible idea under we cut benes and spending to offset the increase in deficit.
With millions and millions being added to SS by the month, cutting off its funding source is insanity right now, especially considering the lower job pool.
If Obama is trying to damage SS and crash the system, then this makes sense.
Just in case non employers don't know....our part was not lowered when they cut the employee's part. Another example of Obama's bias against business.
Of course not. Don’t be silly. We have about two to six years to get our deficits to zero. The debt is about 70% of GDP now and we are adding 10% a year. When it goes up to 90%, default is an outside possibility. When it gets up to 120%, default is a certainty. The compromise that Republicans get their tax cuts and Democrats get their spending increases can’t/won’t continue for very long.
That is really funny.
Are you serious? You think Republicans should run a deficit of 10% of GDP because if they don’t, it might play into Democratic talking points? Again, are you serious?
Well in the coming civil war, you won’t last long.
“We shouldn’t fire back at the freeloaders because that would feed their sense of anger.”