Is It the End of the Line for Payroll Tax?


irsFamilies 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.

{The Note/ Newscenter}


  1. The taxes will not be “going up” or increased. It will be going back to how it was. That’s like saying a sale at the store is going to end and the prices going back to regular price. I appreciated the tax break I got, but I don’t appreciate the politics and social security debt increases with it. Ultimately, we gain now and lose later.

  2. Extend the tax holiday. This is not the time to effectively raise taxes on the middle class. But they need a better long term solution.

  3. Now we see how concerned the Republicans really are about middle class values. Working is for chumps, who get taxed, not for investors, who just roll in the dividends. If Pres. Eisenhower cam back today he’d start a third party because he’d be too ashamed to admit he was a Rebublican. These days people who work need all the help they can get. Besides, that money from the tax cut usually gets spent right away -so it’s really a mini-stimulus for the economy too – even not-rich people can help create jobs!

  4. How could anyone “rely” on this “yearly temporary payroll tax holiday”. It has not even been in effect for an entire year, and there were no representations that it would go on beyond 2011. It’s just another gimmick. I like the extra money as much as the next guy, but I don’t know how anyone could come to “rely” on this extra money. Anon is right, it is not a tax increase. Again, I would argue it’s a gimmick.