Esme’s Blog: The Expiring Payroll Tax Break
MINNEAPOLIS (WCCO) — In just more than three weeks, your paycheck will be two percent smaller. That is the amount you will lose if Congress fails to extend the payroll tax cut.
Congress so far has been paralyzed, unable to agree on a way to keep the cut in place. Many Republicans are opposed on principal. Allowing the year old tax cut to expire would help the deficit to the tune of $120 billion.
But it would also mean less money in people’s pockets for all of 2012. On Wall Street, as well as in key economic indicators, there are signs of a slow but significant recovery.
It’s a cliche, but on main street, the recovery has not hit home. Republicans are feeling the political pressure from constituents and have come up with a plan to extend the tax break without raising taxes on millionaires. The Republican plan calls for cuts to social services and the fast tracking of an oil pipeline project that the President opposes.
When Congress gets back to work this week they will have until Christmas to come up with a compromise on this and other critical issues, including the extension of long term unemployment benefits. With 11 months left until the 2012 elections, those on main streets across the country will be watching closely.