Daily Tax Update - December 14, 2011: Reid Vows To Block Payroll Tax Bill

REID VOWS TO BLOCK HOUSE PAYROLL TAX BILL:  After yesterday’s passage by the House of the payroll tax cut extension bill, Senate Majority Leader Harry Reid said, "Anything you pass with strictly Republican support fails over here.  In the Senate, we can’t pass anything unless we get Republican votes.  It’s a fact of life."  Regarding the extenders, Reid said, "They’re extremely important," without specifying which he would seek to extend.  Reid added, "They’re job creating."

  • House Speaker John Boehner commented on yesterday’s House vote and said, "We’ve passed a large bill that contains many of the priorities of our caucus and the White House.  We’ve worked to find common ground. Now Senate Democrats must act."
  • One Republican Senator called the bill "terrible public policy" and suggested it was passed in part to keep the Republicans from seeming obstructionist.  Sen. Bob Corker (R-TN) was asked if the payroll tax cut extension was passed to help the economy, or because they’ve been put "into this corner of now obstructing a tax cut" and "just to be in the way of the president."  Corker replied, "I think it’s probably a little of both if you want to know the truth. You know the payroll tax holiday is terrible public policy and we’ll see the effect that it has on Social Security over time."  Corker added, "But look, it’s going to happen.  It’s not good public policy but it probably will happen because of all of the other positive things that have been attached to it."  Corker said, "All of us know that the best thing we can do for this economy is to show the country and the world candidly that we have the ability to really deal with tax reform, entitlement reform, and something that deals with our deficits for the long haul.  This payroll tax holiday – I mean these temporary measures do nothing and it’s us dealing with those big issues that’s really going to spur investment."
  • Today, House Speaker John Boehner said that he wants to resolve the dispute over the appropriations bills and a payroll tax cut extension "as soon as possible."  Boehner added, "I don’t think anybody knows how this is going to play out over the course of this week, next week."  Boehner said that it is now up to the Senate to act. The Speaker said, "They can take our bill and pass it, they can amend it, they can pass their own bill. But it’s time for the Senate to do their job."

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

STEPTOE & JOHNSON LLP - TAX PRACTICE
Steptoe & Johnson LLP has one of the largest and most diverse law firm tax practices in the country. The practice covers the entire spectrum of federal taxation, including representation of businesses before the Congress, Treasury and the national office of the IRS; transactional planning for domestic and multinational corporations; complex audit and controversy work for corporations and other business interests contesting IRS adjustments; litigation before the Tax Court, Court of Federal Claims, district courts, courts of appeals and the Supreme Court. The firm's tax practice also encompasses all aspects of employee benefits (ERISA), executive compensation, tax-exempt organizations and charitable giving. Steptoe has an extensive state and local tax practice, representing an array of business clients on complex sales and use tax, corporate income tax and property tax matters, both advising those clients and handling audits, administrative appeals, and litigation for them. Read more information on Steptoe's tax practice.