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PostHeaderIcon Competing Payroll Tax Bills Blocked By Senate

Congress is back to locking in on a payroll tax cut of course both sides of the aisle are arguing both the extent of the cut and how to pay for it.  Two different bills were looked that came from the House and neither were able to get the votes from the Senate to turn it into law.  Let’s take a look at the specifics of each plan.
Democrats

Cut payroll taxes for employees from 6.2% to 3.1% and the same cut would apply to employers who had wages under a set amount.  This would be paid for by a 3.25% surtax on people making more then $1 million.

Republicans

They basically wanted to extend the current law for another year, meaning the employee tax would be 4.2% for another year.  They wanted to pay for this by freezing the pay of federal workers for three years and eventually cutting the government workforce by 10% through attrition.

Of course now we’re looking at the Senate to come up with a compromise.  From what I’ve heard, some of the ideas that came out out of the Super Committee might be used to pay for some kind of tax cut.  Of course there’s plenty of sides to appease.  You also have to deal with the issue that time is running out and when it comes to payroll, making a retroactive adjustment could be an administrative nightmare.  Of course a lot of that would fall on the shoulders of the ADPs and the Ceridians of the world.