Payroll Tax Holiday Garners Republican Support

The proposal is included in the $100 billion compromise package that Republicans are offering instead of supporting a Democratic-backed proposal that gives cash rebates to low-income workers who did not benefit from earlier income tax rebates, and a Republican-backed measure that would repeal of the corporate alternative minimum tax.
 
The proposed month-long break from income taxes would mean immediate cash for both workers and employers, who pay an equal share of the 12.4% payroll tax. The break on payroll taxes would be effective in January at the earliest.
Since the payroll tax is used to finance Social Security, general revenues would have be used to make up the $43 billion shortfall it would create in the retirement system.

According to the report, Senate Majority Leader Tom Daschle (D – South Dakota) said Democrats were willing to look at the payroll tax and other ideas for economic stimulus and urged Republicans to begin talks.

However, he insisted that discussions include a Democratic proposal for $15 billion in spending to beef up security at the nations transport, mail and nuclear facilities. 

– Camilla Klein                           editors@plansponsor.com

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