Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search
 

dkf

(37,305 posts)
Mon Oct 1, 2012, 04:32 PM Oct 2012

Payroll Tax Cut Is Unlikely to Survive Into Next Year

http://www.nytimes.com/2012/10/01/business/economy/payroll-tax-cut-unlikely-to-survive-into-next-year.html

WASHINGTON — Regardless of who wins the presidential election in November or what compromises Congress strikes in the lame-duck session to keep the economy from automatic tax increases and spending cuts, 160 million American wage earners will probably see their tax bills jump after Jan. 1.

That is when the temporary payroll tax holiday ends. Its expiration means less income in families’ pocketbooks — the tax increase would be about $95 billion in 2013 alone — at a time when the economy is little better than it was when the White House reached a deal on the tax break last year.

Independent analysts say that the expiration of the tax cut could shave as much as a percentage point off economic output in 2013, and cost the economy as many as one million jobs. That is because the typical American family had $1,000 in additional income from the lower tax.

But there is still little desire to make an extension part of the negotiations that are under way to avert the huge tax increases and across-the-board spending cuts, known as the fiscal cliff, that will start in January without a deal. For example, without any action, the Bush-era tax cuts will expire and the military and other domestic spending programs will be reduced.
18 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
Payroll Tax Cut Is Unlikely to Survive Into Next Year (Original Post) dkf Oct 2012 OP
Expiration going to be a huge drag on the economy taught_me_patience Oct 2012 #1
Obama will be able to let that and the Bush tax cuts expire after the election. JoePhilly Oct 2012 #2
It shouldn't have been cut in the first place. N/t Blue_In_AK Oct 2012 #3
If it hadn't, Obama would probably be on his way to a landslide loss... Drunken Irishman Oct 2012 #6
Whatever. We live on nothing now in comparison to richie rich, what's a little bit less than nothing lonestarnot Oct 2012 #4
I think it's pretty clear the country is going to go into a recession next year... Drunken Irishman Oct 2012 #5
The CBO is projecting 2 quarters of negative growth if all the parts of the fiscal dkf Oct 2012 #8
All I care about is that we get through the election... Drunken Irishman Oct 2012 #18
cutting it endangers Social Security--we don't want our SS fund to continue to shrink librechik Oct 2012 #7
Got a question about Bush tax cuts. justgamma Oct 2012 #9
Those aren't Bush's tax cuts any more...those expired. dkf Oct 2012 #10
So we're talking about the cuts on the rich? Thanks. justgamma Oct 2012 #11
Obama extended all the cuts originally under Bush. dkf Oct 2012 #12
If he gets a Dem House and Senate he can restore them in 2013 julian09 Oct 2012 #13
No one is fighting to extend the payroll tax holiday though. dkf Oct 2012 #14
No, not just tax cuts on the rich SickOfTheOnePct Oct 2012 #17
maybe with record corporate profits... they could just raise our salaries? Johonny Oct 2012 #15
Record unemployment = no upward wage pressure. dkf Oct 2012 #16

JoePhilly

(27,787 posts)
2. Obama will be able to let that and the Bush tax cuts expire after the election.
Mon Oct 1, 2012, 04:37 PM
Oct 2012

And that's true regardless of the outcome of the election.

 

Drunken Irishman

(34,857 posts)
6. If it hadn't, Obama would probably be on his way to a landslide loss...
Mon Oct 1, 2012, 04:51 PM
Oct 2012

The anemic economic growth would've been even worse without a payroll tax cut that boosted consumer confidence earlier in the year. Obama has been able to stay ahead of Mitt Romney mostly because the economic conditions have not dramatically worsened this year (and in some instances, improved). Had they stalled out last year or earlier this year, we're probably stuck in a recession and Obama is on his way to a Carteresque loss.

 

lonestarnot

(77,097 posts)
4. Whatever. We live on nothing now in comparison to richie rich, what's a little bit less than nothing
Mon Oct 1, 2012, 04:48 PM
Oct 2012
 

Drunken Irishman

(34,857 posts)
5. I think it's pretty clear the country is going to go into a recession next year...
Mon Oct 1, 2012, 04:50 PM
Oct 2012

No matter who wins. It's going to be tough, but probably only temporary as we adjust to the new burden of tax increases.

 

dkf

(37,305 posts)
8. The CBO is projecting 2 quarters of negative growth if all the parts of the fiscal
Mon Oct 1, 2012, 04:59 PM
Oct 2012

Cliff occur.

That might be worth it.

 

Drunken Irishman

(34,857 posts)
18. All I care about is that we get through the election...
Mon Oct 1, 2012, 06:39 PM
Oct 2012

We'll bounce back and as you say, the initial damage will be worth it. The narrative will be ugly, but just as long as things bounce back before the 2014 midterms...

justgamma

(3,657 posts)
9. Got a question about Bush tax cuts.
Mon Oct 1, 2012, 04:59 PM
Oct 2012

I got a check for $600 from Bush plus $.50 a week. When President Obama passed his tax cuts I got $13 + a week.

When we say Bush tax cuts will expire is it only his and not Obama's? Talking only about Bush tax cuts make it seem to me that those are the only ones we got. How do we frame Obama's tax cuts?

 

dkf

(37,305 posts)
12. Obama extended all the cuts originally under Bush.
Mon Oct 1, 2012, 05:11 PM
Oct 2012

Now he wants to extend only the ones under $250,000. But they are all scheduled for expiration.

 

julian09

(1,435 posts)
13. If he gets a Dem House and Senate he can restore them in 2013
Mon Oct 1, 2012, 05:21 PM
Oct 2012

and Senate leader Reed does away with filibuster rule, no problem. We have to do our part and give him those majorities.
Down ticket wins are essential to his and our success.

SickOfTheOnePct

(7,290 posts)
17. No, not just tax cuts on the rich
Mon Oct 1, 2012, 06:27 PM
Oct 2012

If all of the tax cuts are allowed to expire, everyone that pays federal income tax will pay more. For example, a married couple filing jointly with $50,000 in taxable income (not AGI, taxable), would pay $6650 in federal income tax under current law, and $8299 if the tax cuts expire, or roughly $32/week more.

Not saying they shouldn't all expire, but it will affect everyone, not just the rich.

Latest Discussions»General Discussion»Payroll Tax Cut Is Unlike...