Will We Have A Payroll Tax Cut Extension Or Unemployment Extension For Christmas?
The holidays are supposed to be a time for peace and joy. So can Congress have a rare moment of bipartisanship and pass a few bills to lessen the burden on struggling Americans and bring a little comfort to their lives?
Not if the newest payroll tax cut extension fight is any indication.
So how do Democrats want to pay for it? With a 3.25 percent surtax on millionaires reporting their small business income on individual tax returns, rather than via corporate tax returns. This would effect 2 percent of those business owners who file as individuals, or about 340,000 people. In exchange, 113,000,000 workers would benefit from the tax cut extension.
Republicans say they aren’t opposed to extending the tax cut, but that to ask millionaires to pay anything more in taxes to fund the extension results in “a job-killing tax hike on small businesses.” Senate Minority Leader Mitch McConnell says that there will in fact be an extension, but that Republicans will be offering a different way to fund it. “We’ll offer an alternative to the one that’s being proposed in the Senate, which, as I indicated, would have a permanent tax increase on a very, very large number of small businesses in order to pay for temporary tax relief.” Their proposal? An extension of a freeze on federal employee salaries, a policy that is already in effect to pay for other programs and tax cuts Republicans refuse to raise revenues to cover.
Assuming the payroll tax cut extension passes, a bigger battle may still loom — extending unemployment benefits for those who are still out of work. Those in both Congress and the financial industry think the prospects for that extension are bleak. Republicans aren’t saying explicitly that they will fight an extension, but it would cost almost $50 billion, and that would take an extremely long federal salary freeze to offset that cost.
Last year, Republicans held unemployment benefits hostage in order to get a two year extension on the Bush era tax cuts for the rich. Will they ask for a permanent extension this year instead? Or will they simply let 1.8 million Americans stop receiving benefits throughout the month of January, all to “protect” millionaires’ assets?
Soon we will see if the GOP is going to play Santa or Grinch this season.
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