Daily Tax Update - December 2, 2011: Senate Rejects Plans To Extend Payroll Tax

SENATE REJECTS PLANS TO EXTEND PAYROLL TAX CUT:  Competing proposals by Senate Democrats and Republicans to extend the payroll tax cut both failed to gain the 60 votes needed in the Senate last night to end debate and advance the respective bill.  The Democrats’ bill, which would have offset the cost of the bill with a surtax on millionaires, failed by a vote of 51 to 49.  The Republican alternative, which would reduce the federal workforce through attrition and temporarily freeze federal employees' pay, failed 20 to 78.

  • Democrats and Republicans must now come up with an offset that can win a majority.  While the majority of members support extending the payroll tax, the big obstacle is coming to an agreement on an acceptable offset.
  • House Speaker John Boehner said, "I don't think there’s any question that the payroll tax relief, in fact, helps the economy. . . . You’re allowing more Americans, frankly, every working American, to keep more of their money in their pocket.  Frankly, that’s a good thing."
  • Today, President Obama urged Congress to extend the payroll tax cut and unemployment benefits.  Obama said, "Failure to take either of these steps would be a significant blow to our economy. Now is not the time to slam the brakes on the recovery. Right now it's time to step on the gas." Obama added, "I expect that it's going to get done before Congress leaves. Otherwise, Congress may not be leaving, and we can all spend Christmas here together. . . . As president, my most pressing challenge is doing everything I can every single day to get this economy growing faster and create more jobs."

TAX BILLS INTRODUCED DECEMBER 1ST:

1. [112nd] H.R.3540 : To amend the Internal Revenue Code of 1986 to increase the tax benefits for child care assistance for military families.
Sponsor: Rep Carter, John R. [TX-31] (introduced 12/1/2011)      Cosponsors (2)
Committees: House Ways and Means
Latest Major Action: 12/1/2011 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

2. [112nd] S.1934 : A bill to amend the Internal Revenue Code of 1986 to repeal certain communications taxes, and for other purposes.
Sponsor: Sen Heller, Dean [NV] (introduced 12/1/2011)      Cosponsors (None)
Committees: Senate Finance
Latest Major Action: 12/1/2011 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.

3. [112nd] S.1937 : A bill to amend the Internal Revenue Code of 1986 to extend the nonbusiness energy property credit to include the insulation component of insulated siding.
Sponsor: Sen Brown, Sherrod [OH] (introduced 12/1/2011)      Cosponsors (1)
Committees: Senate Finance
Latest Major Action: 12/1/2011 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.

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