Reduction in Social Security Payroll Taxes Due to Expire

 

 

Though the presidential campaigns of both candidates have spent a lot of time focusing on the economy, neither candidate has addressed a pressing issue that is set to impact 163 million workers in 2013: an automatic tax increase. CNS News writes, "A temporary reduction in Social Security payroll taxes is due to expire at the end of the year and hardly anyone in 

Washington is pushing to extend it."

 

In 2010, the U.S. Congress cut the Social Security payroll tax from 6.2 percent to 4.2 percent for 2011 as part of a compromise between the president and congressional Republicans. At the end of 2011, Republicans argued that the revenue loss from the tax cut was not offset by spending cuts as it was supposed to be, but an extension was narrowly passed.

 

According to the Tax Policy Center, the payroll tax cut reduced taxes for working families by approximately $934 per year, but has also cost the federal government around $120 billion a year.

However, when that tax cut expires this year, no one in the White House is going to push for another extension.

Reduction in Social Security Payroll Taxes Due to Expire