Senate Majority Leader Harry Reid took President Barack Obama’s proposed payroll tax cuts to the Senate floor today, calling on Republican to support the plan.
The Senate enacted a 2 percent payroll tax cut in 2010, a reform that expires December 31st. The new $248 billion plan would cut Social Security taxes in half, from 6.2% to 3.1% and would enact a 3.25% tax surcharge on Americans who earn an annual income of more than $1 million.
“Next year, 120 million families will keep an average $1,500 because of this legislation. That means they’ll have more money to spend on necessities like gas and food, and will help spur economic growth in their communities,” Reid said in a statement released Monday. “At a time when many working families are still struggling, we can’t afford not to extend and expand this important payroll tax cut. This Republican opposition smacks of partisanship. Because this tax cut has President Obama’s fingerprints, Republicans won’t support it even though they know it is good policy for American families and businesses.”
“For a family making $50,000 a year, our proposal would not only preserve an existing $935 tax break, it would put an additional $565 a year in the family coffers. If Republicans get their way, that family will actually see its taxes increase by nearly $1,000,” Reid added.
Reid’s comments came following the Thanksgiving break for Congress, and following a week where the congressional supercommittee was unable to reach an agreement to cut $1.2 trillion from the federal deficit over the next 10 years.
Many Republicans have said they are against extended the payroll tax cuts because the 2 percent cut in 2010 did not lead to job creation, which has been their top priority.
“The payroll tax holiday has not stimulated job creation. We don’t think that is a good way to do it,” Arizona Republican Sen. Jon Kyl said Sunday in a statement obtained by The Boston Globe.
The 3.25% surcharge on the wealthiest Americans would become permanent if the payroll tax cuts are extended.
