Is It the End of the Line for Payroll Tax Holiday?

Dec 11, 2011 11:38am

Families and individuals who rely on the $1,000 yearly temporary payroll tax holiday from the government can expect Republicans and at least one Democrat to pull support for the measure at the end of 2012.

“I believe that we should extend the payroll tax holiday another year, avoid a tax increase on working people for another year,” Senate Minority Leader Mitch McConnell, R-Ky., said on “Fox News Sunday.”  “I also agree with Reid, my counterpart, that we ought not doing it again next year.”

President Barack Obama has made extending the payroll tax holiday a priority, and it is also partisan talking point in his campaign to retain the White House in 2012.

“This is not about me. They shouldn’t extend the payroll tax cut for me. They shouldn’t extend unemployment insurance for me. This is for 160 million people who in 23 days are going to see their taxes go up if Congress doesn’t act,” Obama said, standing in front of a countdown timer driving home the impending deadline to extend the payroll tax holiday.

A group of Republicans and some economists have argued that extending the payroll tax holiday would waste money and do nothing to stimulate job creation, but Democrats and the Republican leadership have agreed that a temporary extension is necessary to protect working class Americans.

If the payroll tax holiday is extended for one year, the provision would expire after the 2012 elections, which take place in November.

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