Losing the payroll tax holiday could cost the average family $1,000 in new taxes, according to President Obama, but Republicans are beginning to question the holiday’s stimulative effect on the economy.
Sen. Jon Kyl, R.-Ariz., says that Republicans are hesitant about extending the payroll tax holiday, a provision that many economists say will spur hiring. It’s also a provision that will pull money away from the Social Security trust fund if Congress doesn’t find a way to pay for it.
“The payroll tax holiday has not stimulated job creation,” said Kyl while on “Fox News Sunday.” “We don’t think that’s a good way to do it.”
Congress has until the end of the year to extend the payroll tax holiday. If it fails to act businesses will likely increase the amount of money that is taken out of your paycheck to pay for Social Security taxes.
“I think that just defies logic,” said Sen. Dick Durbin, D-Ill., also on “Fox News Sunday,” in response to Kyl’s remarks.
Democrats want to pay for the payroll tax holiday by raising taxes on the top percentage of income earners, a position that doesn’t sit well with Republicans and a position that President Obama will likely exploit in the upcoming election.
Sen. Charles Schumer, D-N.Y., said today on NBC’s “Meet the Press” that the payroll tax holiday will be the first item on the agenda when the Senate comes back into session this week.