Posts Tagged ‘payroll tax cut’

Why the Senate’s Tax Bill is No Way Out of the Fiscal Impasse

With fiscal cliff talks seemingly stalled (at least today) , there has been growing talk that House Republicans would call President Obama’s bluff and simply pass the Middle-class Tax Cut Act approved by the Senate last summer. But for all the chatter, nobody has paid much attention to what is, and is not, in that bill. […]

Will the Payroll Tax Cut Fall Silently Off the Cliff?

If a tax cut is scheduled to expire, but the focus of the debate is elsewhere, will people notice? Will the average family be surprised when their taxes rise by $1,000 or more next year, even if most of the rest of the 2001-2003 tax cuts are extended for all but the wealthiest Americans? That’s […]

Just How Big is the Payroll Tax Cut?

The 2-percentage-point payroll tax cut extended by Congress in December and again last week will save workers a total of $114 billion this year, according to the Joint Committee on Taxation. Spread over nearly 160 million workers, that’s an average tax cut of $714. Yet the typical news report says “the average worker earning $50,000 […]

Congress Figures Out How to Finance a Payroll Tax Cut: Borrow the Money

It looks like Congress is about to assume its default position: In the face of an intractable partisan dispute over how to pay for a government initiative, don’t. If Democrats won’t cut spending, and Republicans refuse to raise anybody’s taxes, there is always the solution they both can agree upon—just borrow the money and increase […]

Congress Is Back, and So Are Its Battles Over Tax and Budget Policy

The least popular Congress in memory is back.  I, personally, am thrilled. After a year in which lawmakers did almost nothing besides (barely) keeping the government running, this session promises hardly more.  Tax policy will be at the center of much of the partisan squabbling, but it is hard to imagine Congress achieving more than a temporary […]

Note to the Rich: Don’t Spend All of Your Payroll Tax Cut Yet

After much anguish, Congress finally extended this year’s payroll tax cut for two more months. The final bill passed in nearly empty chambers a couple of days before Christmas. But this version differed in an important way from the measure passed by the Senate just a few days earlier. The final bill removed a cap […]

A Two-Month Payroll Tax Cut is Dumb, So Is How Congress Got There

House Republicans are right about one thing at least: Extending this year’s payroll tax cut for two months is ridiculous. The trouble is they are largely to blame for the very policy they are criticizing. Congress got itself in this mess because a few dozen self-styled tea partiers have refused since last summer to helo build a […]

The 16-Percent Solution—Hard on the Rich

The fate of The Temporary Payroll Tax Cut Continuation Act of 2011 remains uncertain. But thanks to a carefully crafted technical change to the current payroll tax cut, the Senate version prevents a handful of very high wage earners from potentially enjoying a huge windfall from the two-month tax break. The legislation would cut the […]

How a Payroll Tax Cut Boosts the Chances for Tax Reform

When Congress finally extends the payroll tax cut that is due to expire in a few weeks, it may also be taking another step down the road to tax reform—and perhaps even to big Social Security changes as well. Why? Because without fundamental reform, it will be devilishly hard for Congress to ever get rid […]

Obama Had It Right the First Time: Bring Back the Making Work Pay Tax Credit

Last December, Congress replaced the two-year-old Making Work Pay tax credit (MWP) with this year’s payroll tax cut. That change cut taxes for higher-income workers, raised taxes for some low-wage workers, and nearly doubled the amount of lost tax revenue. And it most likely provided less bang-for-the-buck economic stimulus than the credit it replaced. Since […]