GOP backs payroll tax extension but rejects surtax on millionaires
November 29th, 2011
07:21 PM ET
11 years ago

GOP backs payroll tax extension but rejects surtax on millionaires

(CNN) - Senate Republicans for the first time Tuesday indicated they would back an extension of the payroll tax cut, which some in the party argued had failed to provide enough economic bang for the buck as the Obama administration and congressional Democrats had promised.

Republican Leader Mitch McConnell said the GOP would offer a bill this week to extend the payroll tax cut for one year and offset its costs in a way that is more agreeable to Republicans than a surtax on incomes over $1 million, which Democrats had proposed.

"At the end of the day, there's a lot of sentiment in our conference, clearly a majority sentiment for continuing the pay roll tax relief that we enacted a year ago, in these tough times," McConnell said, "but we believe in these tough times we ought to pay for it."

McConnell predicted a bill is likely to pass before the end of the year.

The Democrats' bill would extend and expand last year's tax break. Payroll taxes, cut to 4.2 % from 6.2% last year, would be lowered to 3.1%. That would provide middle class families with up to $1,500 more in their paychecks next year, Democrats said. Democrats would also partially extend the break to employers, hoping that might spur hiring. The price tag of the bill is about $265 billion, according to aides.

Democrats want to pay for it with a 3.25% surtax on annual income over $1 million, and they sense they have the political advantage on the issue.

Senate Democratic Leader Harry Reid of Nevada pointed to polls that show a majority of Republican voters think wealthy Americans should pay more in taxes.

"The only place in America that people don't want a fair system is Republicans here in the Senate," Reid said. "Republicans outside this Capitol think the rich should bear some of the burdens we have in our country today."

Republicans kept details of their bill close to the vest saying only they would unveil it later this week. However, they did say they likely would target it just to individuals because extending it to employers would be too pricey. In addition, the cost offsets would be designed to "not adversely impact job creation," according to McConnell.

When pressed on the issue of alternative cost offsets, Sen. John Thune, R-South Dakota, a Republican leader, said one possibility could be some of the spending cuts identified in the recent "super committee" deficit talks. However, Thune cautioned that there could be other alternatives.

Thune also said it's possible Democrats won't support the GOP offsets, so further negotiations between the parties would be required to find a compromise.

Rank-and-file Republicans had their own ideas. Conservatives like Sen. Tom Coburn of Oklahoma and Jim DeMint of South Carolina said the costs should be balanced with spending cuts. Centrist Susan Collins of Maine said she supported the "millionaires surtax" but she wanted to exempt small businesses. And moderate Scott Brown of Massachusetts said he doesn't want any offsets because he believes the economic growth created by the tax breaks ultimately will make up for the lost revenue.

Filed under: Congress • Democrats • Republicans • Taxes
soundoff (21 Responses)
  1. Noodle Nose Johnson

    Why is Mitch McConnell a Senator? Why do the people of Kentucky support him?

    4,314,113 people in Kentucky. Kentucky avg household income is $37,566. There are 62,394 millionaires in Kentucky or just over 1% of the population. He's quite literally sacrificing the needs of the 99% to protect the 1%.

    Why is that OK?

    November 29, 2011 07:39 pm at 7:39 pm |
  2. vic , nashville ,tn

    They have to support payroll tax cut extension ; they don’t have the choice now

    November 29, 2011 07:45 pm at 7:45 pm |
  3. KatR

    The GOP makes me sick. What makes me sicker is the realization that McConnell will continue to be a thorn in Obama's side for a 2nd Obama term. McConnell is a rich racist from Kentucky leading a pack of wolves determined to get that black man out of the WH. Even if ALL Americans agree with a surtax on millionaires McConnell would fight it. Obama/Biden 2012!

    November 29, 2011 07:47 pm at 7:47 pm |
  4. Real Patriot

    Here we go again....The Republicans want a tax break without paying for it–thus soaring the national deficit-do they think we've ALL been sleepwalking for the past ten years?

    How Arrogant.

    November 29, 2011 07:49 pm at 7:49 pm |
  5. bawana

    good maybe they can finally see what these repugs are doing,,,,bunch of jerks,,,,,it will prove to be their downfall,,i am glad too,,,not a moment too soon

    November 29, 2011 07:56 pm at 7:56 pm |
  6. GetReal

    Surprise, surprise! Sunday, Grover Norquist stated on national TV that he would not be opposed to a payroll tax cut, as long as it wasn't offset by raising taxes elsewhere. Two days later, McConnell makes the same statement and is ready to put pen to paper. The puppet dances to its master's every move.

    November 29, 2011 08:04 pm at 8:04 pm |
  7. normajean @ verizon ,com

    In this economy, how can any fair minded human being be in favor of raising taxes on those struggling to keep their families fed and yet be against reversing George Bushs grossly unfair tax break to the VERY wealthy??????????

    November 29, 2011 08:05 pm at 8:05 pm |
  8. logic in LA

    That's the GOP- cut taxes again and then complain about the deficit.
    The GOP caused the deficit and they will keep us deep in it as long as they are allowed to control Congress.
    We need money- not lower taxes- see any new jobs from all these multimillionaires because of their tax cuts.Nope!

    November 29, 2011 08:07 pm at 8:07 pm |
  9. Four and The Door

    "The only place in America that people don't want a fair system is Republicans here in the Senate," Reid said. "Republicans outside this Capitol think the rich should bear some of the burdens we have in our country today."
    Sorry Senator Reid, but you do a lousy job of representing the ideas of Republicans across the country. Let me simplify it for you and you can take it from there: No Tax Increases. Period. The wealthy and high earners pay plenty of taxes. They pay much more than everyone else and that is fair. The problem is in Washington, not with the American Taxpayer. We fix the problems by making government less expensive, not by feeding it more taxes. This is not difficult. The rest of us have had to tighten our belts. It is way past time for the government to join in.

    November 29, 2011 08:08 pm at 8:08 pm |
  10. Henry Miller

    If the US government is given the slightest excuse to avoid reducing expenditures, that's exactly what they'll do. Congress is a bunch of spendaholics, addicted to spending our money exactly as it pleases them and they're not going to stop unless they're forced to do so.

    And that's why the divide-and-conquer approach of picking some group to vilify and then using the vilification to justify raising taxes on that group cannot be allowed to happen. Right now, it's vilify-and-tax people with high incomes. No reason is offered why people with higher incomes should be taxed more harshly than anyone else. They're just nasty, greedy, rich people who deserve to be punished.

    Governments, of course, have been playing this kind of game forever–find some minority, if they're not already disliked by the majority, smear them until they are, then tax them outrageously. Historically, the usual victims are religious minorities–Jews forever, Catholics in Protestant countries and Protestants in Catholic countries, and so on–but victimising people who just happen to have more money than most is as reprehensible as victimising any other kind of minority.

    November 29, 2011 08:13 pm at 8:13 pm |
  11. ArmyCSM

    Once again, a fight to protect their 1%. This is just so 999-ish.

    November 29, 2011 08:20 pm at 8:20 pm |
  12. DAVID

    dear republicans keep fighting for the very rich because i always thought that i would finally live long enough to see a full scale revolt in this country! i am a baby boomer who's taxes were raised in the 1970s for social sucurity to creat a suplus for baby boomers like me for when we retired. george bush jr and the republicans gave the very rich a large tax cut 10 years ago which now is about equal to the surplus that was borrowed from social sucurity to pay for it! the total suplus IOUs left in the account are now at $2.4 trillion dollars owed. just maybe the very rich have not spent all of my retirement savings in social sucurity that good old republicans and george bush jr gave them that we might get back! tetirement is important to me because i lost my familly owned tool and die business to the republicans who supported the rich job exporter and out sourcing sceems.

    November 29, 2011 08:21 pm at 8:21 pm |
  13. A disgusted former Republican

    Why are the republicans so adament about protecting the wealthy from paying their fair share of taxes? Or is it that republican legislators are mostly millionaires and they are trying to protect their own pocketbooks?

    November 29, 2011 08:30 pm at 8:30 pm |
  14. once upon a horse

    we MUST protect our Millionaires at ALL cost because they are of course our job creators.. Just look at all the jobs they have been creating.....:)

    November 29, 2011 08:32 pm at 8:32 pm |
  15. Keith in Austin

    Why not simply report that Conservatives are against increased taxes for ALL Working Americans rather than the underlying and biased slant that they are only protecting the Wealthy! Obama and his Liberal ilk will be coming after EVERYONE sooner or later Folks. All to grow a bloated Government and accelerate Entitlement spending. This is the Liberal mantra in the pursuit of votes and continued power. Wake up America!

    November 29, 2011 08:38 pm at 8:38 pm |
  16. ngc1300

    I'm all for a flat tax (rate to be determined) that exempts incomes below the poverty level + 50%, exempts all food purchases, and exempts medical supplies (not including cosmetic or lifestyle drugs and devices). All income except for the aforementioned would be taxed at this rate-not just job income or salary, but interest income, capital gains, and inheritances. Corporations should be taxed at a rate that makes us competitive in the international arena, with no exemptions except for A) monies that are invested within the US to build new, or expand existing infrastructures B) monies spent to hire and train Americans to work in the US. Couple this with cuts to entitlement programs like open-ended and usually un-overseen contracts to the defense industry. SS should be left alone; it is not an entitlement program , rather it is a pre-funded investment program (you pay into it your entire working life), that would currently be solvent if the lizards (of both parties) had not sucked it dry over the past 50 yrs. to fund their off-budget escapades. It's YOUR money, but it's their personal piggybank.

    November 29, 2011 08:41 pm at 8:41 pm |
  17. Sarah Palin, Fierce Advocate for Childhood Obesity

    Why don't people point out that anyone who makes over $106K (or about, might not be the exact amount) gets a 6.2% decrease of marginal taxes because they no longer have to pay social security on that money?

    And they are complaining about a 3% increase? They are still 3% ahead.

    To be honest, I would like to see ALL Bush tax cuts expire, but it still makes no sense that we are ignoring that the 1% does not have to pay SS.

    November 29, 2011 08:45 pm at 8:45 pm |
  18. Phil


    November 29, 2011 08:52 pm at 8:52 pm |
  19. Jeff Brown in Jersey

    The party of the rich... They will go down in flames next year!

    November 29, 2011 08:57 pm at 8:57 pm |
  20. jefflz

    The entire debt "crisis" goes away of you get rid
    of the Bush tax cuts to the very wealthy. The Republicans have
    sworn to protect the interests of the corporate elite and financial fund moguls
    at the expense of the rest of the nation. If you don't understand why outraged
    citizens are taking to the streets ....this blood oath by the GOP to never
    increase taxes on the rich is a good part of the reason. Just try to wrap your mind around the fact that the 400 wealthiest in the US have more money than half the entire population combined – 150 million. Such enormous concentration of wealth is a direct result of the increasing ability of the wealthiest 0.1% of the people to lobby for more and more cuts in taxes and the Republicans are their handmaidens.

    November 29, 2011 09:09 pm at 9:09 pm |
  21. Joe from CT, not Lieberman

    So as opposed to the Democrats who they claim only want to tax and spend, the Republicans only want to decrease taxes and increase spending.

    November 29, 2011 09:20 pm at 9:20 pm |