Payroll tax cut for 2012 battle begins with firing of millionaires' tax volley
Tuesday, November 29, 2011
The great 2012 Election Year War continues this week with an upcoming new battle.
On the heels of the recently completed but undecided Super Committee Skirmish of 2011 we have the Payroll Tax Cut of 2012 Confrontation.
There had been some hope that the ill-fated Joint Select Committee on Deficit Reduction would be able to include a continuation of the current payroll tax holiday for workers into its plan.
Since that didn't happen, the 2 percentage point reduction in the amount of Social Security taxes that come out of workers' paychecks now is being fought separately.
Obama and most Democrats in the House and Senate want to keep the tax cut.
Advocacy groups for older Americans continue to oppose the payroll tax reduction, fearing it will further undercut the federal retirement benefits program.
And most Republicans also are against the payroll tax cut on the grounds that they don't think it's the best way to get the sluggish economy moving.
This week, the political combatants will face off on the matter once again.
And in true Capitol Hill fashion, the fight is set up so that there is no winner.
Later this week -- probably on Friday, just to kick the weekend off in style -- the Senate is expected to hold three separate votes on extending and expanding the Social Security payroll tax cut.
Along with that vote will be legislative language to offset the cut's cost in ways that Senate Democratic leaders know that Republicans will flat-out reject.
Millionaires' tax is back: The biggie is a proposal to impose a 3.25 percent surtax on incomes above $1 million in 2012.
That millionaires' tax, which has been debated before, is necessary, say Dems, to allow for lowering the payroll tax another 1.1 percent. That would take it from the currently reduced 4.2 percent to 3.1 percent; it's normally 6.2 percent.
In addition, the millionaires' money would allow for businesses to halve the Social Security tax they pay on the first $5 million of their payrolls.
Get ready to hear the usual Republican complaints about job-killing tax increases. I'm still waiting, however, to hear a fuller explanation of just how it would hurt job creation. I mean, we've had more than a decade of W's tax cuts now and we've been stuck for the last two years at 9 percent unemployment. Lower taxes certainly haven't done a thing to cut that.
Maybe that will be part of the upcoming discussion. OK, it won't.
We'll just get the standard demagoguery from all sides along with the expected defeat of the bills.
The reason for the stalemate is that winning doesn't matter at this point.
Oh, sure, both Democrats and Republicans would take a victory. But it's painfully obvious that actually getting legislation approved isn't paramount. A bit of political fencing about various bills will suffice, along with some verbal volleys shot across the other party's bow.
That's enough to carry them into the 2012 election year.
And that means the only losers, once again, are the American taxpayers.
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If the payroll tax cut is not extended, I suggest you make the tax cut for yourself by cutting your needless and wasteful spending by the amount of the tax cut. The cut is 3.1% of your wages, up to $110,100. The tax cut could be $1,000, $1,500 all the way to $3,300. Here how to do it:
1. Cut your cable subscription to “basic”. We did that a few years ago and have saved $900 per year.
2. Cut your dining out and bar room tabs by at going out less often and eating [and drinking, if needs be] at home. You will be shocked…shocked by how much you save. You could save the entire tax cut on this item alone.
3. Stop buying all the junk you buy at malls. Consumer goods sold in this country have fallen terribly in quality and are for the most part cheap plastic junk made by child slave labor in third world countries.
Who do you think owns the businesses that sell this junk to you? It is the 1% we keep hearing about. RICH PEOPLE DON’T BUY THINGS…THEY SELL THINGS…TO PEOPLE SUCH AS YOU. Your continuing to buy this junk is what keeps you in the 99%. You keep yourself poor.
Put your savings into an IRA and resolve to keep doing this, year in, year out. How you do like being broke all the time? Being broke is not only embarrassing and inconvenient; it can be fatal.
I’ve been an attorney dealing with trust and estate clients for over 30 years. I’ve seen the habits of wealthy people. I’ve seen how they’ve got and remain wealthy and I share some observations with you.
Remember: A. Rich people don’t buy things, they sell things.
B. There is no future whatever in spending money but there is a splendid one in saving and investing it.
Posted by: Ponsonby | Friday, December 02, 2011 at 07:44 AM
If I don't know anything else, I know that, if the 3.1% payroll tax cut advanced by the Obama administration is not passed, I will find a way to cut my personal spending by the amount necessary so that I create the tax cut for myself. There was never much of a future in spending money. Now the ONLY future is in saving it.
Posted by: Ptolemy | Thursday, December 01, 2011 at 03:49 PM