Republicans Oppose Middle Class Tax Cut

S

Satchel

2,500+ Posts
Texas congressman Jeb Hensarling explained his party's opposition by suggesting that "not all tax relief is created equal"

Many Republicans have said they are against extended the payroll tax cuts because the 2 percent cut in 2010 did not lead to job creation, which has been their top priority. “The payroll tax holiday has not stimulated job creation. We don’t think that is a good way to do it,” Arizona Republican Sen. Jon Kyl said Sunday in a statement obtained by The Boston Globe. The 3.25% surcharge on the wealthiest Americans would become permanent if the payroll tax cuts are extended Read more:>The Link
 
here is what I wonder about the reduced withholding. If I understand this correctly what this is is reducing how much each employed person pays into SS.
doesn't that also mean less going into the ' account" of each employed person and isn't someone's SS checks based on how much is paid in?
this also seems like a regressive policy. the poor people who don't make much get less than the people at the top of the income brackets.

surely there are sounder ways to get more money into the hands of the poor.
 
a) The payroll tax cut would affect every wage earner - not just the middle class. So, the wealthy would also get this cut.
b) SS is in the red now and is projected to be get in even worse shape in the future without the payroll tax cut...the payroll tax cut will make SS even more untenable.
c) Creating a permanent tax increase to offset the decrease in revenue from a temporary tax decrease is only a political game. If it really was about offsetting that revenue, then the tax increase of 3.25% would sunset when the payroll tax cut was due to sunset.
 
its a minimal tax, i wouldnt worry about it. i just paid $140 to register two cars that are already registered. do i get any sympathy?
 
I thought the Payroll tax was the amount withheld. At the end of the year, a person is going to either get less back or pay more to offset this 3.5% in payroll taxes. You get a little more upfront and a less on the back end.

Maybe I have this confused with something else.
 
mwa
I know why you are confused over this but what the payroll tax cut actually is is a reduction in what the employee pays into SS. Typcially an employee pays 6.2% of their gross wages to SS and the employer pays 6.2%. ( a self employed person pays the whole 12.4)

Under the payroll tax cut the employee only pays 4.2% into SS. The employer still pays the 6.2.

edit to add;
Yes payroll taxes ARE also withholding and combined with taxes for Medicare used to be called FICA.

Now they are called payroll taxes to signify I guess that they are taken out of everyone one's paycheck.

BTW This 2% does not have to be paid back.

For the working poor this doesn't amount to much but perhaps it is better than nothing.

Most people could find ways int their spending habits to net more each month than this 2% but that would require responsibility.
Notice i said MOST, not ALL. yes there are some working poor who do not waste money.
 
why is satch against paying into social security and saving? wasnt this what the great society was all about? or does satch think certain folks should get paid social security for free as well?
 
H6721:

So now that 2% is a taxable wage? So in essence where that money is not going into SS, it is going into my pocket as taxable income.

So the government is actually receiving more taxeable income than SS income, hence moving moneys from SS to the General Fund and giving me more money in my pocket.

I really wish SS was a Choice, whatever happened to that freedom, giving me a choice how to setup my retirement accounts?
 
mwa
bow.gif

I should have known you knew the answer before you asked and of course you are right.
The 2% will be added to your taxable income. In reality it probabaly won't raise anyone from one tax bracket to another or at least very few and most of those will be at the upper end.

I guess for the 35-40k earner that extra $25.00-$30.00 a month can go for food or their smart phone bill.
 
To many 99 percenters, 25-30 dollars can be very helpful. Did you catch the 60 Minutes segment on homelessness in America?
 
That 25-30 in for a month, mist likely would come in 2 paychecks, $12.50-$15 every 2 weeks.
I wonder how much the average family spends on their phine bills?

the homeless are likely NOT making 35k-40k a year so this does nothing for them.

The problems i see with this payroll tax cut is that it does NOT help the truly needy and it reduces revenue into SS.
 
Republican Tax Increases

by Alex Tabarrok on August 22, 2011 at 7:34 am in Economics | Permalink

If Republicans have their way, taxes will increase next year by $120 billion. Republicans in favor of tax increases? Sadly, yes.

Last year the payroll tax on employees was cut from 6.2% to 4.2%, a policy that President Obama supported. Economists from across the political spectrum have also expressed support for a payroll tax cut including Keynes, Mankiw, Robert Reich, Dani Rodrik, Tyler and myself. The CBO scored a payroll tax cut as among the most effective policies for increasing employment, although it would have been better to cut the employer side of the tax.

The payroll tax cut was temporary, however, and is scheduled to expire next year. So who is in favor of increasing taxes?

Many of the same Republicans who fought hammer-and-tong to keep the George W. Bush-era income tax cuts from expiring on schedule are now saying a different “temporary” tax cut should end as planned. By their own definition, that amounts to a tax increase.

The tax break extension they oppose is sought by President Barack Obama. Unlike proposed changes in the income tax, this policy helps the 46 percent of all Americans who owe no federal income taxes but who pay a “payroll tax” on practically every dime they earn.

House Republicans appear to be most in favor of increasing taxes although some Republican Senators have also said they want to raise taxes. The failure of Republicans on this issue lends credence to Paul Krugman’s arguments:

How can [Repubicans not want to cut the payroll tax], when Republicans love tax cuts? The answer is, they don’t. They love tax cuts for the rich. Tax cuts for ordinary workers, many of whom will be those hated lucky duckies whose incomes are too low to pay income tax, are if anything something Republicans dislike.

Also, the GOP is against any idea that (a) comes from Obama (b) might help the economy before the 2012 election.

To their credit Romney and Gingrich are more supportive:

Former Massachusetts Gov. Mitt Romney did not flatly rule out an extra year for the payroll tax cut, but he “would prefer to see the payroll tax cut on the employer side” to spur job growth, his campaign said.

Former House speaker Newt Gingrich said Republicans will fall under increasing pressure to extend the payroll tax cut. If they refuse, he said in a recent speech, “we’re going to end up in a position where we’re going to raise taxes on the lowest-income Americans the day they go to work.”
 
So you are telling me that my SS Contributions are After Tax?

My SS Contributions are after taxed and then I get taxed on them again when I receive them in x number of years?

I am no expert but I though SS contributions were pre-tax.
 
Satch- Would you agree that this is not a tax cut at all, but just another form of stimulus plan? Additionally, with the 3.25% surtax on million dollar earners to offset the reduction in SS withholding, isn't this another form of redistribution of income? Maybe that's why some in the GOP do not support it.

I know it's naive to say it, but wouldn't it be nice if we occasionally saw an honest proposal designed to actually help the economy instead of the political games both sides play?
 
Then my income has already been taxed and then they take the SS.

So I am getting more money in my pocket and less money is going to the government.

I find that very hard to believe? Sorry about the skepticism, but it is like them trying to tell me that there are going to be budget cuts when in actually there is going to be a decrease in the amount they actually raise the budget.

I need to do more research, I am not getting the whole story.
 
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