Senate Democrats on November 28 unveiled another facet of President Obama’s jobs legislation that would extend and expand the current 2 percent payroll tax cut that is scheduled to expire on December 31. The new measure would be worth $1,500 for the average American taxpayer in 2012, according to lawmakers.
The bill, the Middle Class Tax Cut Bill, would increase the current break to 3.1 percent for one year and cut in half the employer-side Social Security payroll taxes from 6.2 percent to 3.1 percent on the first $5 million of payroll. Firms that add workers would receive a 100-percent payroll tax holiday on their increase in wages.
Some economists have gone on the record saying the economy will likely plunge into a full recession if Congress fails to extend the tax cut. The legislation is likely to face stiff Republican opposition, however, as the $ 248-billion cost of the plan is offset by a 3.25-percent surcharge on income over $1 million.
“Any attempt to pass another temporary stimulus funded by a permanent tax hike on the very people we’re counting on to create the private-sector jobs we need is purely political and not intended to do a thing to help the economy, since we all know it’s likely to fail with bipartisan opposition,” said Senate Minority Leader Mitch McConnell, R-Ky., from the floor of the Senate.
Senate Majority Leader Harry Reid, D-Nev., responded that cutting taxes for middle-class families and business should be an area where Republicans and Democrats can find common ground. “This Republican opposition smacks of partisanship. Because this tax cut has President Obama’s fingerprints, Republicans won’t support it, even though they know it is good policy for American families and businesses,” said Reid.
The bill, sponsored by Sen. Robert P. Casey, Jr., D-Pa., is expected to come up for a vote in the Senate chamber later in the week.
By Jeff Carlson, CCH News Staff