Republicans hate taxes. It’s embedded in their DNA. Their mantra: lower taxes whenever possible… oppose tax increases at every turn. Lower taxes…less government…blah, blah, blah. We all know the drill.
So why would Republicans move to block the renewal of the payroll tax cut which in effect raises people’s taxes?
The answer is simple…politics.
You may recall that last December Congress approved President Obama’s request to reduce the amount deducted for Social Security from each wage earner from 6.2% to 4.2%. The deduction, scheduled to last for one year, has been referred to as a “payroll tax holiday.” The goal was to put more money into people’s pockets with the intent of spurring the economy.
The President wants to extend the tax cut. Republicans disagree.
A brief tutorial!
Workers normally pay 6.2% of their wages for Social Security. Their employer matches with an additional 6.2% for a total of 12.4% per worker. The “payroll tax holiday” reduced the employee deduction from 6.2% to 4.2%. The employer contribution remained at 6.2%. Social Security taxes apply to only the first $106,800 of workers earnings. Anything earned over that amount is a freebee. Therefore the most anyone can benefit from the one year deduction is $2,136. The tax reduction will cost the government $120 billion this year and a like amount next year if renewed.
According to the Associated Press Republicans fear that extending the “payroll tax holiday” will hamper Congressional efforts to cut the deficit. Republican Representative David Camp is Chairman of the powerful Ways and Means Committee and a member of the super committee tasked with finding new deficit cuts. Speaking in opposition Camp said: “tax reductions no matter how well intended will push the deficit higher, making the panel’s task that much harder.”
This is the same Republican Party that last December held unemployment benefits hostage using the lifeline of over 2 million Americans as a bargaining chip to broker an extension of the Bush tax cuts for millionaires and billionaires. The fact that extending those Bush tax cuts increased the deficit by $4 trillion dollars didn’t seem to matter to Chairman Camp and his Republican cohorts.
This is just more evidence that Republicans will oppose everything and anything this President supports…even tax cuts.