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Want a holiday tax cut?

Friday, December 16, 2011 - 02:09

A payroll tax holiday sounds pretty good, but how to pay for it? And what's the impact? A quick explainer on what Democrats and Republicans are fighting about.

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Payroll tax holiday. Sounds pretty good doesn't it. Not so fast. Payroll tax holiday or rather how to pay for 1 is the central issue in the latest standoff between Democrats and Republicans. On that threatens to shut down the US government. What's a payroll tax holiday what everybody who works pays payroll taxes also called Social Security tax. These are not your income tax what do you flip burgers are managed banks your boss probably withhold six point 2% of yourself. 206000. Dollars a year and exit to the government on Social Security. Last year president Barack Obama proposed cutting this withholding tax of four point 2% letting a 160 million American workers keep. A little bit more of their hard earned money. This was supposed to be temporary measure a holiday. Boost the economic recovery was supposed to expire at the end of twenty to -- now both political parties want to extend. So what's the dispute. The problem is how to -- Social Security is expensive and giving all Americans -- payroll tax holiday. It would leave 120 billion dollar hole in the budget. Democrats suggest offsetting the cost of extending holiday but putting in new tax on individuals earning more than a million dollars a year. The Republicans want a freeze federal employee's salary cut government jobs so what happened. House Republicans passed their plan Democrats in the senate they passed around. But a compromise between the two may not come by Friday when the government runs out of money here's the twist. The payroll tax holiday is extremely popular. Last year it meant an average of thousand dollars for every US house. A -- for low and middle income families. But it would help the economy to -- Obama announced the holiday a year ago and many economists were ecstatic they called it a stealth stimulus. What happened. Economic growth slowed to a crawl anyway and now the government faces a shut down again. Program is popular will that be enough to force congress to compromise and give Americans another payroll tax holiday to remember the cops. -- --

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Want a holiday tax cut?

Friday, December 16, 2011 - 02:09