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A Tax Cut The Republicans Oppose

August 26, 2011

From The New York Times.

It is hard to find a tax cut that Congressional Republicans dislike. Unless it is a tax cut pushed by President Obama.

In a turning of the tax policy tables, Democrats are increasingly hammering on Republicans who oppose the president’s proposal to extend for a year a payroll tax cut passed last year with bipartisan support.

That tax cut — which reduces workers’ contributions to Social Security this year to 4.2 percent of wages, from 6.2 percent — expires in December. The White House would like to extend it for another year. But Republicans in Congress are balking, arguing that such a cut adds needlessly to the nation’s budget deficit, and should be replaced with an overhaul of tax policy instead.

One way or another, there will be a vote on extending these tax cuts,” said Senator Charles E. Schumer of New York, the third-ranking Senate Democrat, “and Republicans will have to stand up to the fact if they oppose it they are for tax cuts for the rich but not for the middle class.”

Lower- and middle-income workers are the greatest beneficiaries of the tax cut. The cut resulted in $67.2 billion of lost revenue for Social Security in 2011 and a total cost of $111.7 billion spread over 10 years. The rate will return to previous levels on Jan. 1 if Congress does not extend the cut.

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