Tuesday, November 29, 2011

Extend Payroll Tax Cut for 2012?

 "The average family held onto $935 more of their hard-earned dollars this year. We need to assure those families that they can rely on that tax cut next year as well,” stated Senator Reid.  Senator Reid is talking about a 2% payroll tax holiday that started a year ago and is scheduled to expire the 31st of December.  According to Andrew Taylor, of the Associated Press, President Obama has a plan “to cut in half every worker's payroll taxes next year — paid for by a 3.25 percent tax surcharge on the very wealthy.” 

Republicans of course do not like the idea and our likely to oppose it due to the fact that the wealthy will be paying a tax surcharge.  Andrew Taylor also wrote, “Joint Tax Committee estimated about 34% of small business income would be affected by the proposed surcharge under the Obama plan.”  Is it fair that the wealthy have to pay this tax in order for the middle class to stay afloat?  I don’t necessarily think it’s fair that just because you make more money you should pay more taxes; or that the wealthy should be made responsible for the fact that we are in a bad economic state.  Would the wealthy have to pay that surcharge if the economy was doing well? Probably not. 

The problem still remains; our economy is likely to become worse off if that payroll tax cut isn’t extended next yearBarclay's analyst Michael Pond says that if we don’t get the payroll tax cut extended, “our growth forecast frankly will probably be dropped down from about 2.5 percent in Q1 down to around 1 percent. It’s that big.”  Many state that the payroll tax cut didn’t help stimulate the economy; but if the above statement by Pond is true, and the economy will suffer without it, then it had to have affected the economy in a good way.

America is looking for quick, sort run solutions to our economic problem; when even if one is found it isn’t sure to last.  America needs to relax and begin seeing long run possibilities.  The payroll tax extension has made a difference; I can personally say I felt the difference.  The fact is it does need to be extended and neither the Democrats nor the Republicans are denying it.  Found out how much you may be paying next year if the payroll tax cut isn’t extended by licking here.  

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