Bipartisan Efforts to Extend Payroll Tax Holiday Face Opposition

In a CNN "American Morning" interview on Wednesday, December 7, 2011, Senators Susan Collins (R-ME) and Claire McCaskill (D-MO) discussed their bipartisan efforts to extend the popular payroll tax holiday. The bill aims to keep the lowered payroll tax rate of 4.2 percent and reduce employers' payroll tax rate for the first $10 million of their payroll, which would be paid for by repealing tax breaks for oil companies and a 10-year, 2 percent surtax on millionaires.

The senators' plan is to find a compromise that can pass Congress, as they acknowledge that the current partisan divide in Washington is discouraging to employers and the American public. Senator McCaskill emphasized that the bill is a jobs bill, which funds infrastructure, roads, and bridgework around the country. Senator Collins stated that the president's rhetoric is not helpful in bringing people together and that the bill aims to transcend partisan rhetoric to get things done for the American people.

Key Takeaways:

• The bipartisan bill aims to keep the lowered payroll tax rate of 4.2 percent and reduce employers' payroll tax rate for the first $10 million of their payroll, which would be paid for by repealing tax breaks for oil companies and a 10-year, 2 percent surtax on millionaires.
• The bill is designed to find a compromise that can pass Congress and avoid a tax increase for working families on January 1st.
• The senators acknowledged that temporary tax moves are never really temporary, citing the Bush tax cuts as an example.
• The bill carves out small businesses from the 2 percent surtax and is only 10 years long.
• Senator McCaskill stated that she is confident that the bill can pass if lawmakers focus on getting things done rather than worrying about winning elections.

Statistics:

• The lowered payroll tax rate of 4.2 percent and reduced employers' payroll tax rate for the first $10 million of their payroll would be paid for by repealing tax breaks for oil companies and a 10-year, 2 percent surtax on millionaires.
• The 2 percent surtax would only apply to millionaires, not small business owners who report their business income on their personal tax returns.
• The bill would fund infrastructure, roads, and bridgework around the country.
• 1 in 3 children born today would only have a chance to make it to the middle class, according to President Obama's speech in Kansas.

Sources:

• CNN "American Morning" Interview with Senators Susan Collins and Claire McCaskill, December 7, 2011, by Christine Romans.
• Federal News Service, Inc., Ste. 500, 1000 Vermont Avenue NW, Washington, DC 20005 USA.