Democrats, Republicans clash over proposed payroll tax cut
Under President Barack Obama's payroll tax cut plan, every worker in the country will have their Social Security payroll tax halved in 2012 from 6.2 percent to 3.1 percent.
The Associated Press reports that funding for the cut will come from a permanent 3.25 percent surcharge on United States citizens whose income exceeds $1 million. Democrats are set to hold a test vote on the plan soon.
The proposal is unpopular with Senate Republicans who continue to question the effectiveness of current legislation due to expire on December 31 that enacted a 2 percent tax holiday one year ago.
"The payroll tax holiday has not stimulated job creation," said Arizona Republican Jon Kyl in a recent interview with Fox News Sunday.
However, Illinois Democrat Dick Durbin said the idea of raising taxes at a time when many working families are "struggling from paycheck to paycheck … defies logic," according to the media outlet.
In the wake of the deficit Super Committee's failure, economists have warned that failing to extend the payroll tax cut could have a devastating effect on the economy in 2012, cutting its already weak growth "almost in half," The Los Angeles Times reports.
The Associated Press reports that funding for the cut will come from a permanent 3.25 percent surcharge on United States citizens whose income exceeds $1 million. Democrats are set to hold a test vote on the plan soon.
The proposal is unpopular with Senate Republicans who continue to question the effectiveness of current legislation due to expire on December 31 that enacted a 2 percent tax holiday one year ago.
"The payroll tax holiday has not stimulated job creation," said Arizona Republican Jon Kyl in a recent interview with Fox News Sunday.
However, Illinois Democrat Dick Durbin said the idea of raising taxes at a time when many working families are "struggling from paycheck to paycheck … defies logic," according to the media outlet.
In the wake of the deficit Super Committee's failure, economists have warned that failing to extend the payroll tax cut could have a devastating effect on the economy in 2012, cutting its already weak growth "almost in half," The Los Angeles Times reports.
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