Tag Archives: Tax holiday

Payroll Tax Debate: The Truth Comes Out in the U.S. Senate

On Thursday, Dec.1st the battle to extend the payroll tax holiday and unemployment insurance benefits reached new heights in the Senate, as not only did Republicans battle Democrats, but both parties saw raging fights within their own ranks over how to pay for the extensions, along with whether the tax holiday should even be extended at all. In the end, once again, nothing was accomplished

The Senate Republican bill won only 20 votes, less than half the GOP conference. The Democratic bill also went down in flames, 51-49, failing to muster the 60 votes needed for passage. The debates included back and forth rhetoric on whether the tax holiday actually has ever created jobs or improved the economy, the fact that the Democrat’s bill was weakening Seniors Social Security programs by lessening revenues. Here is a common sense question that will never be asked in the elitist halls of Congress during these debates: Why not give the holiday tax break to all of America’s workers by cutting federal payroll taxes, instead of SSI payroll taxes? (fica) That way you give the workers more money in their pocket, while at the same time keep funds coming into an already under-funded SSI program.

The Truth: Senate Republican leaders introduced a bill that would keep the payroll tax rate at its current level for another year. The cost is roughly $120 billion. Senate Republicans would offset most of the cost by freezing the pay of federal employees through 2015 and gradually reducing the federal work force by 10 percent. In addition, Senate Republican leaders would go after “millionaires and billionaires,” not by raising their taxes but by making them ineligible for unemployment compensation and food stamps and increasing their Medicare premiums. ← These facts are basically being ignored in the media today.

Fact: The Congressional Budget Office said the Republican bill would reduce federal deficits by $111 billion, mainly because of the pay freeze and the reduction in the federal work force.

Senate Democratic leaders want a deeper temporary reduction in Social Security payroll taxes. They would provide payroll tax relief to employers as well as employees. And they would offset the cost with a 3.25 percent surtax on modified adjusted gross income in excess of $1 million.  Once again, instead of working with Republicans to get our out- of – control spending under control, Liberal Democrats in the Senate want to grow government by taxing Americans more. Spend, spend spend is all these tyrants want to do, with no regards to fiscal sanity in any way shape or form. Here are a few quotes from the Senate payroll tax debate yesterday, that may surprise some of our readers:

After House Speaker Boehner alluded to the benefits of the tax holiday as, “I don’t think there’s any question that the payroll tax relief, in fact, helps the economy. You’re allowing more Americans, frankly, every working American, to keep more of their money in their pocket,” the Speaker added. “Frankly, that’s a good thing.”

To which, Senator Orin Hatch then responded, “If they could show me a lot of increases in jobs or something, that’s a different matter,” Sen. Orrin Hatch of Utah, the ranking Republican on the Finance Committee, said Wednesday. “But I don’t think they’ve been able to show that.”

Then we have a strong statement from Senate Democrat Joe Manchin: “Letting Americans believe that we don’t have to pay for Social Security is wrong. It is dead wrong,” Manchin said. “And I will not vote for it. Period. Under any condition.” Finally, common sense rears it’s long-forgotten head up in the Senate!

And finally, Senator Mark Krik (R – Ill) threw in another dose of reality: “I don’t think seniors should be based on a ‘trust us’ policy, that we’ll pay you back,” Kirk added. “And I would actually say even the political vote is to vote against this so that you’re for Social Security.”

Today, the House is supposed to come out with their own version of the tax holiday and unemployment benefits extension bill. The vicious cycle of the irresponsible debt-spending versus a fiscally responsible government-political-battle rages on with exactly no Presidential leadership anywhere to be found. Barack Obama is too busy waging class warfare in campaign fund-raising speeches on the taxpayers dime for the 70th time in 2011,… to actually concern himself with doing his job as President of the United States.

2012 just can’t get here fast enough!