GOP may OK tax increase that Obama hopes to block

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By CHARLES BABINGTON 
Associated Press
WASHINGTON (AP) -- News flash: Congressional Republicans want to raise your taxes. Impossible, right? GOP lawmakers are so virulently anti-tax, surely they will fight to prevent a payroll tax increase on virtually every wage-earner starting Jan. 1, right?

Apparently not.

Many of the same Republicans who fought hammer-and-tong to keep the George W. Bush-era income tax cuts from expiring on schedule are now saying a different "temporary" tax cut should end as planned. By their own definition, that amounts to a tax increase.

The tax break extension they oppose is sought by President Barack Obama. Unlike proposed changes in the income tax, this policy helps the 46 percent of all Americans who owe no federal income taxes but who pay a "payroll tax" on practically every dime they earn.

There are other differences as well, and Republicans say their stand is consistent with their goal of long-term tax policies that will spur employment and lend greater certainty to the economy.

"It's always a net positive to let taxpayers keep more of what they earn," says Rep. Jeb Hensarling, "but not all tax relief is created equal for the purposes of helping to get the economy moving again." The Texas lawmaker is on the House GOP leadership team.

The debate is likely to boil up in coming weeks as a special bipartisan committee seeks big deficit reductions and weighs which tax cuts are sacrosanct.

At issue is a tax that the vast majority of workers pay, but many don't recognize because they don't read, or don't understand their pay stubs. Workers normally pay 6.2 percent of their wages toward a tax designated for Social Security. Their employer pays an equal amount, for a total of 12.4 percent per worker.

As part of a bipartisan spending deal last December, Congress approved Obama's request to reduce the workers' share to 4.2 percent for one year; employers' rate did not change. Obama wants Congress to extend the reduction for an additional year. If not, the rate will return to 6.2 percent on Jan. 1.

Obama cited the payroll tax in his weekend radio and Internet address Saturday, when he urged Congress to work together on measures that help the economy and create jobs. "There are things we can do right now that will mean more customers for businesses and more jobs across the country. We can cut payroll taxes again, so families have an extra $1,000 to spend," he said.

Social Security payroll taxes apply only to the first $106,800 of a worker's wages. Therefore, $2,136 is the biggest benefit anyone can gain from the one-year reduction.

The great majority of Americans make less than $106,800 a year. Millions of workers pay more in payroll taxes than in federal income taxes.

The 12-month tax reduction will cost the government about $120 billion this year, and a similar amount next year if it's renewed.

That worries Rep. David Camp, R-Mich., chairman of the tax-writing Ways and Means Committee, and a member of the House-Senate supercommittee tasked with finding new deficit cuts. Tax reductions, "no matter how well-intended," will push the deficit higher, making the panel's task that much harder, Camp's office said.

But Republican lawmakers haven't always worried about tax cuts increasing the deficit. They led the fight to extend the life of a much bigger tax break: the major 2001 income tax reduction enacted under Bush. It was scheduled to expire at the start of this year. Obama campaigned on a pledge to end the tax break only for the richest Americans, but solid GOP opposition forced him to back down.

Many Republicans are adamant about not raising taxes but largely silent on what it would mean to let the payroll tax break expire.

Republicans cite key differences between the two "temporary" taxes, starting with the fact that the Bush measure had a 10-year life from the start. To stimulate job growth, these lawmakers say, it's better to reduce income tax rates for people and for companies than to extend the payroll tax break.

"We don't need short-term gestures. We need long-term fundamental changes in our tax structure and our regulatory structure that people who create jobs can rely on," said Sen. Lamar Alexander, R-Tenn., when asked about the payroll tax matter.

House Majority Leader Eric Cantor, R-Va., "has never believed that this type of temporary tax relief is the best way to grow the economy," said spokesman Brad Dayspring.

The nonpartisan Congressional Budget Office says payroll tax reductions give the economy a short-term boost. But it says the benefit is bigger if employers get the tax break instead of, or along with, workers.

Some top Republicans have taken a wait-and-see approach, expecting the payroll tax issue to be a bargaining chip in the upcoming debt reduction talks.

Neither House Speaker John Boehner, R-Ohio, nor Senate Minority Leader Mitch McConnell, R-Ky., has taken a firm stand on whether to extend the one-year tax cut.

Most GOP presidential candidates also are treading lightly.

Former Massachusetts Gov. Mitt Romney did not flatly rule out an extra year for the payroll tax cut, but he "would prefer to see the payroll tax cut on the employer side" to spur job growth, his campaign said.

Former House speaker Newt Gingrich said Republicans will fall under increasing pressure to extend the payroll tax cut. If they refuse, he said in a recent speech, "we're going to end up in a position where we're going to raise taxes on the lowest-income Americans the day they go to work."

Many Democrats also are ambivalent about Obama's proposed tax cut extension. They are more focused on protecting social programs from deep spending cuts. Some worry that a multiyear reduction in the tax designated for Social Security could undermine that program's health and stature.

For decades the payroll tax generated more revenue than the Social Security paid out in benefits. The excess was used to fund other government operations. Last year, however, Social Security benefits began outstripping revenue from its designated sources, forcing the program to start tapping its "trust fund" of government obligations.
Blatant[font=Verdana, Times, serif] hypocrisy. We could have brought in more than half the $120 billion lost in revenues if we had allowed the Bush Era Tax Cuts to expire for high income earners.[/font]

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Disgusting. I still don't see how people with incomes less than $100,000 can call themselves Republicans. They only care and look out for the wealthy and corporations. Sadly, when thing really get bad by 2016 and China has us a over a barrel; The Republicans will blame it all on President Obama and America will eat it up.
 
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Just another example of Republican hypocrisy at its finest.
They stay contradictiong themselves. At first it was we don't believe that rasing taxes in any way is the way to grow the economy.
But now its, well, that's not the same kind of tax cut. Bull@@$^
 
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Originally Posted by jay zoe2

Disgusting. I still don't see how people with incomes less than $100,000 can call themselves Republicans. They only care and look out for the wealthy and corporations. Sadly, when thing really get bad by 2016 and China has us a over a barrel; The Republicans will blame it all on President Obama and America will eat it up.
good question to ask Southerners
 
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I 100% disagree with the payroll tax cut to begin with... And think the cap should be raised well passed $106K...


So I would have never made the cut therefore there would be nothing to expire...

But anyway the hypocrisy of Republicans is just sick... They want the bottom 98% to fight amongst themselves while the 2% just laugh at our stupidity for letting it happen...

Democrats need to grow a pair and stop this nonsense bipartisan crap and start fighting....


George H.W. had it right in 1980 when he was running against Reagan... Supply Side Economics is "Voodoo Economics"
 
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Originally Posted by Based Mod

Originally Posted by jay zoe2

Disgusting. I still don't see how people with incomes less than $100,000 can call themselves Republicans. They only care and look out for the wealthy and corporations. Sadly, when thing really get bad by 2016 and China has us a over a barrel; The Republicans will blame it all on President Obama and America will eat it up.
good question to ask Southerners
i've also noticed in my community the cool thing to be is anti obama/anti democrat
 
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Originally Posted by jay zoe2

Disgusting. I still don't see how people with incomes less than $100,000 can call themselves Republicans. They only care and look out for the wealthy and corporations. Sadly, when thing really get bad by 2016 and China has us a over a barrel; The Republicans will blame it all on President Obama and America will eat it up.
The same could be said for people receiving social benefits & subsidized housing via the previous housing boom since they have been the ones screwed the most in the process.  Just look up the increased wealth gap since the Great Society was implemented by President Johnson.  The same happened with subprime mortgage funding to low income earners that was required by congress.

But... I guess politics is primarily based on feelings.  If congress really wanted to "raise" taxes on high income earners, they would increase the $80K limit for social security taxation.
 
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Originally Posted by biff lawson

Originally Posted by Based Mod

Originally Posted by jay zoe2

Disgusting. I still don't see how people with incomes less than $100,000 can call themselves Republicans. They only care and look out for the wealthy and corporations. Sadly, when thing really get bad by 2016 and China has us a over a barrel; The Republicans will blame it all on President Obama and America will eat it up.
good question to ask Southerners
i've also noticed in my community the cool thing to be is anti obama/anti democrat
cosign on everything said
 
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How about bringing the troops home and stop spending money? Raising or lowering taxes don't mean a thing if you printing more money and devaluing the currency.


Just another distraction.
 
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man..i hope ron paul has a better shot to get da nomination this time....i wanna see him and obama duke it out.
 

kdawg

Staff member
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Wow, that's just ridiculous. They couldn't be any more blatant in trying to screw average working people while helping their rich buddies.

Expected though.
 
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Originally Posted by jay zoe2

Disgusting. I still don't see how people with incomes less than $100,000 can call themselves Republicans. 
  
I agree.  I have been saying this for the longest time I call them C-Class Republicans, it's the same as when somebody purchases a regular C-Class Mercedes just to have a Mercedes and think they belong with the elite or upper class.  Not knowing that the people with the better and more expensive Mercedes just laugh at the individuals that have the C-Class Mercedes.
 
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How is this hypocrisy though?  The 2% decrease in employee's FICA tax is part of the spending deal while the GW tax cuts had sunset provisions which were set to expire in 2010 after several extensions.  Just read that last part of the article, Social Security benefits > Payroll tax revenue in 2010 causing the Govt to dip into government trust funds.  How long can this govt continue to tax individuals at the 4.2% FICA rate? 
All I gotta say is where are all the tax cuts Obama campaigned and promised?  These right here.


Here's a summary of what this 2-face Obama has given me since taken office

2009/2010 - Working tax credit - $400


2011 - 2% reduction in FICA taxes.  


Obama needs to go... I can already see a massive increase in income taxes his second term. 
 
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this policy helps the 46 percent of all Americans who owe no federal income taxes but who pay a "payroll tax" on practically every dime they earn.


Key wording right there. 

Those affected already don't even pay Federal income tax.  Any of you saying that people that make up to $100,000 are in this group are tripping on something hard.  Those affected by this are poor Americans who actually work.  And is it wrong to ask them to pay an extra 2% into FICA, SUTA and FUTA, which are programs that they will use? 

Way too many people are buying into the class warefare propaganda.

The government needs to prove to us that they can cut spending (social programs and military) and at that point let us talk about increasing taxes to fix the mistakes of the past and present.  Until then it will be politics and games as usual.
 
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Damn republicans have no shame. Whatever happeed to that pledge they signed, I thought they were against raising taxes. Oh wait unless Obama is for it....smh
 
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Originally Posted by jay zoe2

Disgusting. I still don't see how people with incomes less than $100,000 can call themselves Republicans. They only care and look out for the wealthy and corporations. Sadly, when thing really get bad by 2016 and China has us a over a barrel; The Republicans will blame it all on President Obama and America will eat it up.
kinda like how democrats and obama are still blaming bush for what is happening. 
 
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Originally Posted by Essential1



But anyway the hypocrisy of Republicans is just sick... They want the bottom 98% to fight amongst themselves while the 2% just laugh at our stupidity for letting it happen...

Democrats need to grow a pair and stop this nonsense bipartisan crap and start fighting....
so true on both levels.

why compromise with people who's main goal is to make you a 1 term president.    if obama gets reelected he better grow some balls in his 2nd term and stop playing nice guy with the gop since he'll have nothing to lose since he can't get reelected again anyways
 
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Originally Posted by BostonThreeParty

Originally Posted by jay zoe2

Disgusting. I still don't see how people with incomes less than $100,000 can call themselves Republicans. They only care and look out for the wealthy and corporations. Sadly, when thing really get bad by 2016 and China has us a over a barrel; The Republicans will blame it all on President Obama and America will eat it up.
kinda like how democrats and obama are still blaming bush for what is happening. 
I mean...correct me if I'm wrong but aren't the Bush tax cuts a sizeable fraction of the deficit problem?

Both parties are responsible for this current economic debacle though. No doubt.
Just registered to vote last week and proudly checked that Independent box
.
 
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Originally Posted by Nyota de la star

Originally Posted by BostonThreeParty

Originally Posted by jay zoe2

Disgusting. I still don't see how people with incomes less than $100,000 can call themselves Republicans. They only care and look out for the wealthy and corporations. Sadly, when thing really get bad by 2016 and China has us a over a barrel; The Republicans will blame it all on President Obama and America will eat it up.
kinda like how democrats and obama are still blaming bush for what is happening. 
I mean...correct me if I'm wrong but aren't the Bush tax cuts a sizeable fraction of the deficit problem?

Both parties are responsible for this current economic debacle though. No doubt.
Just registered to vote last week and proudly checked that Independent box
.
You're right that both parties are responsible.  The Republicans cut taxes, which caused revenues to skyrocket into the treasury.  However, like most politicians they couldn't help themselves and spent every bit of the increase and then some to justify "homeland security" and "Medicare Part D".  Both of which has been complete financial disasters.  However, the Democrats have had their own set of fiasco's with Stimulus 2 and the auto bailouts.
 
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Nothing good can ever come when discussing money. Every problem in this entire world can all be boiled down to money and that's why it will always be the "root of all evil".
 
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Originally Posted by jc619er

Nothing good can ever come when discussing money. Every problem in this entire world can all be boiled down to money and that's why it will always be the "root of all evil".
The LOVE of money is the root of all KINDS of evil.  Money in and of itself is not evil.  It's when you infuse humans into the equation.  Money only amplifies our innermost desires and emotions.
 
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Originally Posted by crcballer55

Originally Posted by jc619er

Nothing good can ever come when discussing money. Every problem in this entire world can all be boiled down to money and that's why it will always be the "root of all evil".
The LOVE of money is the root of all KINDS of evil.  Money in and of itself is not evil.  It's when you infuse humans into the equation.  Money only amplifies our innermost desires and emotions.

Correcto mundo, well said
 
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Originally Posted by crcballer55

Originally Posted by Nyota de la star

Originally Posted by BostonThreeParty


kinda like how democrats and obama are still blaming bush for what is happening. 
I mean...correct me if I'm wrong but aren't the Bush tax cuts a sizeable fraction of the deficit problem?

Both parties are responsible for this current economic debacle though. No doubt.
Just registered to vote last week and proudly checked that Independent box
.
You're right that both parties are responsible.  The Republicans cut taxes, which caused revenues to skyrocket into the treasury.  However, like most politicians they couldn't help themselves and spent every bit of the increase and then some to justify "homeland security" and "Medicare Part D".  Both of which has been complete financial disasters.  However, the Democrats have had their own set of fiasco's with Stimulus 2 and the auto bailouts.

I hate when people say that...the government gave the Automotive Industry LOANS, meaning they pay that money back (which they are on pace to be complete with in the next year or so) .....the banks were BAILED OUT, meaning you'll NEVER EVER EVER EVER see that money again
 
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