Posts Tagged ‘payroll tax’
“Americans are exhausted, out of work and many have simply lost hope in the political system. They have been struggling now with nearly five consecutive years of record job stagnation, increased foreclosure rates and an economy that continues to struggle.
All of these reasons are why I cannot in good faith vote for this payroll tax cut deal. It is not that I don’t believe Americans should have relief in their paychecks or be afforded a safety net of unemployment insurance, it is because, unlike some on Capitol Hill, I am looking beyond this election cycle.
I am looking at the ramifications of adding billions of American taxpayer’s dollars to a trillion dollar deficit with no answers as to how or when we will pay for this bill.
I am looking beyond immediate gratification and instead looking at an American political system willing to cave to political pressure to give Americans a temporary Band-Aid that in the long run only makes things worse for their future.
The facts are simple. This supposed payroll tax decrease is really a backdoor tax increase on homeowners and first time homebuyers. The deal is being paid for by added fees on FHA- backed loans. Homeowners with FHA- backed mortgages represent more than one-third of mortgages in the United States. Those Middle Class Americans will be footing the bill for this political gimmick.
Homebuyers with a $200,000 standard 30- year loan will have to pay an extra $10,000 over the course of their loan. It would take roughly 250 paychecks with $40 extra from the payroll tax holiday to pay for the added increase to the life of an FHA-backed mortgage loan. That represents ten years of consecutive employment.
In addition, some may argue the payroll tax deal will not affect Social Security. This could not be further from the truth. The federal government’s general operating account will be used to compensate for the lost revenue in the Social Security Trust Fund, which will increase the deficit and add to the nation’s debt.
My position on the Payroll Tax Extension has not changed. In December of 2011, I supported a responsible one- year extension that was fully paid for, and would have put money back in the pockets of American workers while protecting homeowners, Social Security, and not adding to the deficit and our ever-increasing national debt.
This current deal is not good policy – but it is political posturing.
The payroll tax cut deal is a result of politicians telling Americans what they want to hear, while seriously harming them and our nation in the long run. Americans sent a new wave of leaders to Capitol Hill in 2010 to stand up for conservative principles and turn this country around. I will continue to be a voice for those Americans.”
*Please see this CBS News Special Investigation on the “real way” the payroll tax deal is being paid for.
Capitol Hill Bureau Chief
The House voted 277 to 148 Thursday to temporarily extend the Bush tax cuts, continue unemployment benefits for 13 months and approve a series of smaller tax credits, cuts and extensions.
Because the Senate passed the identical measure on Wednesday, the legislation now goes to President Obama for his signature Friday.
The bill’s passage marks a significant victory for Obama, who struck out on his own last week to forge a compromise with Senate Republican leaders that he believed could pass before the end of the year.
But it is has also created a wedge of distrust between the president and liberals in the House, who had pinned their hopes for a progressive agenda and feel that he has stopped fighting for their dream.
House leaders felt the fury of the liberal opposition to the package Thursday as they stumbled going into votes setting the parameters of the debate and realized they did not have enough support to get past the procedural hurdles. The leadership regrouped in the afternoon to devise a process that liberal Democrats could support. After the caucus meeting, which Rep. Louise Slaughter (D-N.Y.) called “raucous,” the House resumed debating the bill until its passage just before midnight.
The bill will extend the expiring Bush tax cuts for all income levels for the next two years. Specifically, it will continue the 10 percent tax bracket and keep the brackets of 25 percent, 28 percent, 33 percent and 35 percent, instead of reverting to 28 percent, 31 percent, 36 percent and 39.6 percent. It will also continue to tax capital gains and dividends at 0 percent and 15 percent, depending on income, instead of letting the rates go back to 10 percent and 20 percent for capital gains and marginal tax rates for dividends.
The legislation also temporarily cuts the 6.2 percent payroll tax for all workers to 4.2 percent and extends unemployment benefits for 13 months for Americans out of work up to 99 weeks.
The bill continues dozens of tax breaks and credits for people from the bottom of the income spectrum to the top. It patches the Alternative Minimum Tax for two years; extends the college tuition tax credit, child tax credit and Earned Income Tax Credit for two years; allows businesses to deduct 100 percent of certain investments in the first year; and provides a buffet of tax credits to businesses and industries from filmmakers to rum producers to coal miners and railroad operators.
Particularly galling to liberal Democrats, the bill also sets the estate tax at 35 percent for estates valued at more than $5 million, well below the 45 percent rate on estates over $3.5 million that most Democrats had been pushing for.
Some Republicans who supported the measure did so with reservations.
“I don’t like this bill that’s before us, but I like even less the idea of increasing the tax burden on working Americans,” said Rep. David Drier, the top Republican on the Rules Committee, who voted for the bill.
But Drier’s Republican colleague, Rep. Mike Pence of Indiana, rose to say he would oppose it because the extensions did not go far enough.
“It’s a bad deal for taxpayers; it will do little to create jobs and I cannot support it,” Pence said. “This is a tough call. No Republican in this Congress wants to see taxes raised on any American, but uncertainty is the enemy of prosperity.”
In an unusual twist, Pence found himself on the same side of the issue as dozens of liberal Democrats, who objected to several parts of the bill.
Rep. Sheila Jackson Lee (D-Texas) said the overall package would not help working people enough, while it would help the wealthy more than they needed.
“This is not about fighting against someone who has a few more dollars than the next person,” she said. “It is to do what we’re sent here to do, which is to make sure that this capitalistic system works for everybody, including those who are not employed.”
Rep. Jerrold Nadler (D-N.Y.) warned that the president’s compromise with Republicans was about much more than tax cuts — it was part of a long-term plan to change the role of government in Americans’ lives.
“It would be the culmination of a 30-year Republican effort to starve the beast to deliberately create huge deficits in order to provide the political cover for reducing expenditures for education housing, Social Security, and Medicare.”
The price tag for the two-year tax cut bonanza has been estimated at $860 billion, a cost that several Democrats, including Rep. Peter DeFazio (D-Ore.), said was too high.
“Every other major industrial nation on Earth is talking about buckling down a little bit and austerity measures and having a sustained recovery. But no, not here!” he yelled on the House floor just before the vote. “We got out the credit card. And guess what? Our kids and grand kids are going to be paying that bill for 30 years.”