Payroll Tax Holiday 2010 IRS?

The new piece of stimulus in the Obama-GOP tax deal in 2010 is the temporary one year reduction of individual Social Security payroll taxes from 6.2% to 4.2%, it is known as the payroll tax holiday.

The proposal to reduce the Social Security payroll tax for employees by 2 percentage points for one year means that those households would get as much as $82 more each week in after-tax income. By contrast, a single worker earning $10,000 would pocket less than $4 a week.

The Senate is expected to act first on the Payroll Tax Holiday deal. If all 42 Republicans back the Obama plan, Democrats are expected to be able to get at least eight moderates and Senate leaders to join them.

Do you think the Payroll Tax Holiday is a good idea? Where can I find more information about the 2010 Payroll Tax Holiday on the IRS website?

asked by Veronica in Politics | 2226 views | 12-08-2010 at 12:27 AM

All the payroll tax holiday does is undermine Social Security. It does nothing to reduce the debt or solve the economic problems of this country.

The Obama-Republican payroll tax holiday will cost $120 billion, which is worth about twice as much as the Making Work Pay tax credit will replace.

Here's why it's a trap: the deal calls for the payroll tax holiday to last for just one year. That means on January 1, 2012, payroll taxes would go back up to 6.2%.

All these cuts add up, needless to say, for a federal budget already straining to the tune of trillion-dollar-plus annual deficits. Policy analysts at MF Global put the cost of the tax package at around $1 trillion.

answered by Second | 12-08-2010 at 12:28 AM

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