Mitt Romney and President Obama both have a nasty secret and neither one of them want you to find it out before the election, but truth be told, the secret is already out. Now they both just ignore the subject, but no matter who wins the election, taxes are going to go up for middle income families and individuals.
When President Obama took office he proposed, and the House and Senate passed, a bill including the Payroll Tax Cut. This tax cut lowered the amount of money people paid into the Social Security Trust Fund by 2% per year. This saved the average employee making less than $100,000 per year about $1,000 per year and those making more than $200,000 about $2,000 per year.
Now the tax cut is set to expire, and it is one of those few things both Republicans and Democrats can agree on…the tax cut needs to go.
Both Democrats and Republicans, and the powerful senior’s lobby backed by the AARP, feel the tax cut did not have the stimulating effect that the country was looking for and at the same time is providing less money to the Social Security Trust Fund. The bill, originally made Congress responsible for covering the more than $215 billion dollars it would cost the Trust Fund in lost revenue, but because Congress never cut spending or the deficit the spending was paid for by using debt financing. Or better said, we put it on the country credit card.
Senator Orrin Hatch of Utah, the top Republican on the Senate Finance Committee, said:
“The payroll tax holiday was intended to be temporary and there is strong bipartisan support to let that tax provision expire. The continued extension of a temporary payroll tax holiday has serious long-term implications for Social Security and, frankly, it’s not even clear that it has helped to boost our ailing economy.”
House Minority Leader Nancy Pelosi also wants to see the tax cut expire.