White House Proposes Payroll-Tax Holiday - For worker earning $40,000, the tax savings would be $800

[jefferson_dem]

White House Proposes Payroll-Tax Holiday
By JONATHAN WEISMAN And JOHN D. MCKINNON

WASHINGTON—Aides to President Barack Obama are proposing a one-year reduction in the payroll tax as part of negotiations with Congress on a broader package to stave off income-tax increases due to take effect next year.

Under the White House plan, the Social Security tax paid by workers would drop temporarily by 2 percentage points, to 4.2% from 6.2%, a person familiar with the proposal said. For a worker earning $40,000, the tax savings would be $800.

The proposal has not won the approval of congressional Democrats or Republicans. Its emergence in the broader tax negotiations is a sign that the White House is trying to break the logjam on those talks before the end of the year, when tax cuts signed into law by former President George W. Bush are due to expire.

White House officials proposed the cut as a way to stimulate the economy, said the person familiar with the talks. The proposal would take the place of an earlier White House push to extend Mr. Obama's signature Making Work Pay tax cut, which reduced income taxes for middle-income individuals by $400 a year.

Republicans had adamantly opposed extending Making Work Pay, and House Democrats were cool to it, as well. But Mr. Obama and Democrats are likely to accept a Republican demand that the Bush-era tax cuts be extended even for wealthy taxpayers, and the White House is looking for more in return for agreeing to extend the cuts for higher earners.

http://online.wsj.com/article/SB10001424052748704156304576003441518282986.html?mod=wsj_share_twitter

[stopbush]

1. Savings would be $800, not $8000

[Phx_Dem]

2. I'll take $800! n/t

[The Velveteen Ocelot]

3. Still, better than a poke in the eye with a sharp stick...

[jefferson_dem]

4. Oopsie. Thanks.

Fixed now.

[BeyondGeography]

6. $15.38 a week

I think Rush Limbaugh will be (privately) more thankful. He saves $2.7 million.

[Name removed]

5. Deleted message

Message removed by moderator. Click here to review the message board rules.

[ProSense]

7. How is this an attack on Social Security? Robert Reich and others pushed this

many times.

[Beetwasher]

8. Amazing, A Payroll Tax Holiday Was LAUDED By Liberals, That Is UNTIL Obama Proposes It!

Holy cow, the hate is palpable.

[sirthomas66]

11. Have you reasoned this cut out?

[Beetwasher]

12. Reasoned What Out? A Payroll Tax Was Floated By Liberals As A Great Idea

That is until NOW that Obama is proposing it.

[sirthomas66]

17. Reduced FIT taxes--not SS taxes!!!!!!!! One is an entitlement, one is not.

[Beetwasher]

18. WTF Are You Talking About? Did I Say SS?

I said payroll taxes, which is what the story says.

[sirthomas66]

20. The plan is for a one year reduction of SS taxes from 6.2 to 4.2 per

cent. Where did you think the money was coming from?

[Beetwasher]

21. And Liberals Floated A Payroll Tax Holiday And NOW A Poster Was Slamming Obama For It!

Seriously, do you even know what the fuck post you're responding to? Where did I say anything other than that?

[sirthomas66]

22. The payroll tax holiday was for FIT--not SS. Why would Democrats

want to begin a defunding of SS in the same year that a deficit commission was picked to partly revamp it. That is simply tactic shift.

[Beetwasher]

23. Bullshit, It Was Actually A Total Holiday On All Payroll Taxes

[RaleighNCDUer]

28. Federal Income Tax is NOT "payroll tax". Different critter.

When they say payroll tax, they are talking FICA.

[hollowdweller]

27. I didn't think it was a good idea then either.

Slippery Slope.

[sirthomas66]

10. Answer me this, then: if Social Security tax witholdings are to be

cut, by whatever amount, where will the funds come from to replenish the social security accounts for the amount of the reduction. Or will Fred, who is now 40, simply have less money in his social security account? This is a backdoor trap. Decrease the funding now, then extend that increase thereby lowering future social security payments. Have you heard anything mentioned as to where the replenishment of the reduced funding will come from. I hope there are a few Democrat accountants looking at this thing. And the timing? The Catfood Commission is now basically defunct, with a slightly unexpected vote. So, suddenly, there is another way to reduce future SS entitlements. Hmmmm

[ProSense]

15. "whatever amount, where will the funds come from to replenish the social security accounts "

They will come from raising the threshold on high income earners.

It works.

[sirthomas66]

19. Yes, PS, but that is so far an idea, and would have to come from

a Republican Congress. Won't happen... But they may like this proposed reduction. It sets the stage and suggests more than one way to skin a cat. Will they reduce SS payments because of this reduction to people who are retiring next year? What is the future value at 20, 30 years of the reduced amount?

[RaleighNCDUer]

9. So, they are claiming SS is in crisis, and what we do is un-fund it?

What the FUCK?

[sirthomas66]

16. Exactamundo. It not only serves as the entry point to do more

defunding, if the defunding is made permanent it reduces payments to future retirees by the amount of the defunding's future value. I thought something like this would be done as part of the next budget or through legislation. This is a trap for Democrats. Watch carefully what the Republican response to this will be. Also, if it passes and you get a year-end social security statement, compare your new payments to your last statement.

[high density]

13. Yes let us put SS in a worse position

Plus let's also kick the issue down the road for two years so we can 'debate' taxes again during an election year.

[Milo_Bloom]

14. Great idea.. so long as it involves the ELIMINATION of the bush tax cuts.

[w4rma]

24. Do not care. It's only temporary. (nt)

[flpoljunkie]

25. For a family earning $50,000 the savings would be $1,000 for those paying maximum, savings of $2,136

Among the provisions in the package sure to get intense scrutiny is the temporary payroll tax cut. Under current law, workers in 2011 would pay 6.2 percent in Social Security payroll tax on income up to $106,800, or a maximum of $6,621.60. For a family earning $50,000, the two percentage point cut would mean a savings of $1,000.

For workers paying the maximum, the two percentage point cut would mean a savings of $2,136.

http://www.nytimes.com/2010/12/07/us/politics/07cong.html?hp

[hollowdweller]

26. Mission Accomplished: First step to permanently defunding SS

Way to go Obama. We all have retirement thru our work anyway right??