On Monday, Senate Democrats introduced their proposal to increase the payroll tax cut to $1,500 and extend it through 2012, offsetting the cost with spending cuts supported by the GOP and a proposed surtax on annual income above $1 million.
Christopher Bergin, President and Publisher of Tax Analysts and an expert on federal tax policy, released this statement today in response to the efforts to overcome the existing impasse between Congress and the Administration on the payroll tax cut extension:
"Congress will extend the temporary payroll tax cut with another temporary payroll tax break because lawmakers will want to avoid raising taxes on middle-income Americans in the midst of tough economic times. But this temporary tax cut is just one of a growing number of temporary provisions that are due to expire at the end of this year. They include, for instance, a deduction for elementary and secondary school teacher expenses. In fact, 67 tax provisions will expire in the coming months, the congressional Joint Committee on Taxation reports, including the important "patch" to the Alternative Minimum Tax that prevents a huge tax increase on the middle class. These temporary provisions make it hard for taxpayers to plan for the long term. If policymakers want to do something significant for long-term economic growth, they would stop filling the tax code with temporary measures that leave taxpayers uncertain about where to invest their hard-earned dollars for the long term. The bottom line is that Congress and the Administration have no choice but to learn to work together to prevent the economic and political fallout from failing to extend key temporary tax provisions."
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