The payroll tax expiration fight thread.

[Hubbs]

Who really inspires leadership confidence out the the group? Can't really think of one to unite the country....

I'm not talking about uniting the country. I'm talking about winning. I could see Romney, Newt, and Paul(!) winning.

Romney I can see winning for all the reasons that people are saying right now that he's the "most electable." He's a safe candidate who might not inspire tremendous passion, but the GOP will be trying to make the election a referendum on Obama, and I think a Romney candidacy would allow that narrative to work. It would be close, but there's a good chance that Romney could squeeze out a win.

Newt I can see because I think Americans are more desperate for economic competence in the White House than they have been at any time since the Depression (I know, I'm really going out on a limb), and Newt's tremendous amount of baggage can all be outweighed by his ability to level both intellectual barrels at Obama and tear him apart on the economy. I've been saying this to people I know since Newt was in single digits. Many of them kept saying, "Come on, Newt? [insert random piece of baggage here]." But it can all go out the window if he plays it right. I think his drop in the polls has been exacerbated by the attacks regarding abortion, which he hasn't responded to as strongly as he needs to. Bachmann, with occasional help from the others, has been making it sound like Newt was going around throwing parties every time someone got an abortion. The truth is that all he was doing was trying to stop an attempt by one of the national-level GOP organizations to defund any Republican candidates who were pro-choice, which made a lot of sense politically, even on the very issue of abortion (it's quite unlikely that the Democrats running in those districts would be more pro-life than Republicans who could very well have supported many limits on abortion, just not an outright ban). While there's a small group of extremely hardcore pro-lifers who will refuse to accept even that explanation, I think a much larger group has currently been made to think that Newt was essentially pro-choice for a time. He's going to have to work to undo that, but I think he still can.

With Paul, I'll say the same thing I said in another thread. He's an incredibly "boom-or-bust" type of candidate. I could absolutely see him getting totally demolished in the general. But I could also see him pulling in a whole lot of voters who would side with Obama if the GOP nominated anyone else. Slightly left-leaning moderates who care about ending the War on Drugs, for example. Strongly anti-war types. People who want the government to not be involved in the issue of marriage. Occupy Wall Streeters—Paul is immensely popular with them. Imagine if the OWS crowd was faced with a choice between the guy who has Timothy Geithner running the Treasury, the guy who re-appointed the Fed chairman that's repeatedly bailed out the major banks, the guy who's maintained the revolving door between Wall Street and Washington, the guy who said that his administration was the only thing standing between the banks and pitchforks, the guy who's taken in millions in campaign donations from the big banks... and Ron Paul, who wants to eliminate the Fed, do away with bailouts, and stop the monetary inflation that can so easily cause the asset bubbles that allow financial executives to rake in the big bucks before dumping the inevitable losses onto someone else.

Like I said, I can see Paul getting destroyed. He'd fail the Nixon-Kennedy test to a degree that's absolutely unheard of in modern American politics. But I could also see him leaving political historians to study this election for the next century after winning big.

[twist]

Linked in the MSNBC blurb quoted by Buford

http://www.politico.com/news/stories/1211/70728.html

"McConnell's silence speaks volumes."

I honestly believe that if there was a vote in the House on the extension it would pass with most of the Dems and enough Republicans to put it over the top. So is this really Boehner caving to the Tea Party? I can see that the House Republicans would want to be done with this issue, and some want to take a principled stand, but their timing is terrible. Is (House) party unity worth the PR loss?

It's Boehner using the Tea Party as the bad cop in a "good cop bad cop" routine.

Oh, I really wanted to live up to my agreement but the Tea Party wont listen, you have to come back and go through a conference committee to compromise even more on your already compromised bill.

Childish if you ask me but it's the game he's playing.

It’s not going to work, the Senate has had enough of this Tea Party railroading junk.

[Fergasun]

thiebear,

Fair enough. You blame the Senate, I blame the House.

I have an easier time understanding why 89% of the Senate passed the bill than understanding why 89% of the House is not going to pass the Senate bill.

I disagree re: charge that the Senate hasn't passed a budget in however many days... this is something I'm sick of hearing GOP partisans repeat. In reality, Congress has frozen that small portion of non-mandatory, defense spending to FY10 levels.

Although I'm just looking and can't find comparison of the FY11 to FY12 defense budgets.... so maybe they haven't really frozen it as much as I think they have.

[@DCGoldPants]

I find it hard to blame the side of congress that passed something at almost 90% approval while the other won't vote on it.

For lack of anybody else, Boehner is the default leader of the GOP in Washington right now. I don't think his folks in the Senate understand what he's doing. He might not either. Get something done for the good of everybody, but piss over the fringe? Maybe its a saving your own job over doing your own job type of thing.

[Burgold]

Not by me...

Best we can likely hope for is R's to control at least part of Congress as gridlock is better then those ***holes agreeing to put us further in debt (then the gridlock does). And we all know the only time EITHER party seems to even pander to being fiscally conservative is when there is a different party in the Exec branch then the House or Senate.

Actually, the Dems pretty definitively proved that they can manage gridlock while holding a super-majority. With that in mind, does Republican representation serve any role at all?

---------- Post added December-22nd-2011 at 08:05 AM ----------

Linked in the MSNBC blurb quoted by Buford

http://www.politico.com/news/stories/1211/70728.html

"McConnell's silence speaks volumes."

I honestly believe that if there was a vote in the House on the extension it would pass with most of the Dems and enough Republicans to put it over the top. So is this really Boehner caving to the Tea Party? I can see that the House Republicans would want to be done with this issue, and some want to take a principled stand, but their timing is terrible. Is (House) party unity worth the PR loss?

You are correct. The reason we know you are correct is that Boehner won't put it to a vote. If he thought he had the votes to defeat it that's what he'd do and state emphatically that the House rejects it because the two months is insufficient or whatever...

[ABQCOWBOY]

I think this entire thing is stupid.

I don't see the issues with the Pipeline. It would create jobs, allow for much needed reserves and if it does not come to the U.S., it will be sold to some other country and that will still be used so how does that really help any environmental concerns?

As far as the term of the agreement, that doesn't make much sense either. President Obama was the one who proposed a year long term for this to begin with. I don't really understand why the Democrats would oppose it. Two months is just not long enough. You won't even be able to implement it in two months. This is just a big waste of time if we are doing this for two months.

I am in favor of just letting them expire. They have not proven to improve the economy. They are simply robbing Social Security coffers and haven't we all agreed that if we just leave Social Security alone, it's fine? It's when we start screwing around with it that it creates an issue with both sides. There is no real benefit to doing it, so far as I can see.

This is all political.

[88Comrade2000]

I say they vote for a tax increase instead. No payroll tax cut, time for payroll tax increase. I also belief you should double tax by taxing the benefits people get, once they pass what they paid into it.

The Republican House needs to be thrown out, just like the Democratic Senate. So, in 2013 we will have wacky Nancy back as speaker and corrupt Mitch Mcconnel as Senate Majority leader. We flip control.

[@DCGoldPants]

Congress: The standoff continues

The Washington Post: “House Republicans faced mounting pressure Wednesday from critics inside and outside Congress who worry that their standoff with President Obama over whether to extend a payroll tax cut could do lasting damage to the GOP.”

“Former House speaker Newt Gingrich, who is seeking the party’s presidential nomination, warned that the showdown could end badly for Republicans, citing his own experience in losing the political battle to President Bill Clinton during the 1996 government shutdown. ‘Incumbent presidents have enormous advantages. And I think what Republicans ought to do is what’s right for America. They ought to do it calmly and pleasantly and happily,’ Gingrich said.”

“Sen. John McCain says Congress' failure to reach agreement on legislation extending a payroll tax cut for working Americans ‘hurts the Republican Party,’” he said on CBS’s Early Show, per AP. “The GOP's 2008 presidential nominee says his party made a mistake in voting down the Senate-passed version of a bill that would have kept the current payroll tax relief intact for at least two more months.”

[twa]

Why should they bother passing a unworkable band aid?

http://www.nationalreview.com/corner/286222/experts-say-senate-payroll-tax-plan-unworkable-andrew-stiles

No rush on making a decision, just like on Keystone

[Thiebear]

Note1: ^^^^^^^^^^^^^^^^ from the above post ^^^^^^^^^^^

I had listed this earlier and got the "Bush Lobbyiest involved alert!" (I agreed but the 12th paragraph had the real news).

this is in addition to:

UPDATE: Another group, the National Association of Wholesale-Distributors, writes Congressional leaders to “concur with the conclusion of the NPRC.”

Note2:

How hard is it to do an entire fiscal year?

---------- Post added December-22nd-2011 at 11:07 AM ----------

thiebear,

Fair enough. You blame the Senate, I blame the House.

I have an easier time understanding why 89% of the Senate passed the bill than understanding why 89% of the House is not going to pass the Senate bill.

I disagree re: charge that the Senate hasn't passed a budget in however many days... this is something I'm sick of hearing GOP partisans repeat. In reality, Congress has frozen that small portion of non-mandatory, defense spending to FY10 levels.

Although I'm just looking and can't find comparison of the FY11 to FY12 defense budgets.... so maybe they haven't really frozen it as much as I think they have.

If the House passes a bill for 12months and sends it to the Senate. (Why does everyone fail to mention that the HOUSE passed a bill earlier in the week the Senate tabled).

Then the Senate ignores that bill and passes a 2month bill 4 days later, then leaves town on a 33day vacation.

Why is it on the House to pass the bandaid with things in it that will harm the economy (see 18,500 bracket).

At worst the House and Senatee leadership form the normal committee and work it out? (with the Payroll vendors help on understanding the IMPACTS!!!!!!)

[SnyderShrugged]

I've been intentionally staying away from this Kabuki theater that our Redsox vs Yankees partisan system has wrought.

Yesterday, it actually came up at work and will impact my company. I guess that ADP (our Payroll processing vendor) issued a warning that they likely will have trouble coding a shortterm payroll tax extension like has been proposed. It will cause all sorts of havoc if they go a short term solution route.

[Larry]

I've been intentionally staying away from this Kabuki theater that our Redsox vs Yankees partisan system has wrought.

Yesterday, it actually came up at work and will impact my company. I guess that ADP (our Payroll processing vendor) issued a warning that they likely will have trouble coding a shortterm payroll tax extension like has been proposed. It will cause all sorts of havoc if they go a short term solution route.

Or your payroll company is either performing a little politicking, or is fishing for a rate increase.

[Fergasun]

I call BS re: whining by the payroll tax companies. Since the original payroll tax cut was temporary, wouldn't they know that at some point it could expire? Was it so hard to initially setup?

Take the baseline proposition that the payroll tax cut extension expires in January, like current law dictates. How is it hard to give them 2 more months to comply? That does not make sense.

They are approaching the problem assuming a baseline scenario of a 12-month extension.

Furthermore, do they really expect the extension will only be 2-months; and both parties are working out the political optics of how best to pay for this. In 2-months, the parties will figure out a way to pay for the remaining 10-months. Since they both claim they want a 12-month extension.

thiebear,

You cannot get a 12-month extension until you first get a 2-month extension. The House GOP essentially voted on a meaningless 0-month extension, because they attached a number of poison pills to their 12-month extension. It's easy for them to tout the point that they voted on a 12-month extension, without noting all the other policy riders they attached. Hence, Nancy Pelosi's quote that the Democrats are not about to be Charlie Brown to the GOP Lucy.

I don't understand House GOP logic, other than they want to avoid being blamed if the payroll taxes don't get extended. It seems clear what happens if the GOP passes the 2-month extension. In other 2-months we go through the same-thing. The Democrats try to pay for it via taxes on the rich. The GOP counter-proposal will no doubt involve taxing the middle class. I think the Democrats should be able to turn this into their advantage in 2012, except they are a bunch of dummy's and I never hear them forcefully arguing that the GOP alternatives hurt folks in the middle class more. They are both a bunch of lazy ****s that think American voter is ignorant... sadly most people don't really pay attention.

---------- Post added December-22nd-2011 at 09:01 AM ----------

Following this and posting on this thread is too exhausting. There was even a National Review article suggesting the House GOP simply extend the Senate Bill for the remaining 10-months. Anyone who takes this article seriously would have to scratch their heads at it... the GOP Senators would never accept a 10-month extension without any "pay for" (or they may cave if they get the Keystone Pipeline, but we won't know for another 2-months). So this writer proposes the House GOP send over yet another bill that is unacceptable to the Senate GOP... yeah that's a political winner.

The whole thing over the pipeline is funny as well; as most of the pipeline jobs are the type of "make-work" temporary programs that the GOP opposed in the stimulus... and they seem to be grossly overstating how much this pipeline would contribute to our energy independence.

Repeat after me House GOP. The first step to getting a 12-month extension, is to accept a 2-month extension. If you don't accept the Senate GOP 2-month extension, you are throwing away the 12-month extension.

I applaud you all (House GOP members) for having the audacity to suggest that a 12-month extension that would not pass the House was acceptable in the Senate, with a bunch of poison policy riders, and then pretending that you honestly attempted to pass a 12-month extension. But it's not like you haven't done that this whole Congressional session. "Honestly, we passed a budget! (full of policy riders and cuts that were unacceptable to the Senate!)".

I've advocated the House do its best to make the case to the American people the type of rationale policy a GOP President would implement in 2012 during the session of the House. What I've seen from the House GOP is that they are simply going forward with the "reddest of red" proposals, in order to appease their partisans.

[SnyderShrugged]

Or your payroll company is either performing a little politicking, or is fishing for a rate increase.

sorry, I doubt a firm the size of ADP would pull that with a company the size of ours. I saw the data, seems pretty legit due to the coding concerns to accommodate details and still unknown rules.

Ferg, Yes they anticipated its expiration, but they couldnt very well anticipate a sort term run where the feds havent delivered the rules yet to be completed for a 01/01 payroll can they? We are talking literally thousands upon thousands of individual payroll runs with variation between them in details. I wouldnt be so quick to hollar BS, seems pretty logical to me (and you wont find many less critical of large vendors than I)

[twa]

Ferg...is the 2 month extension a clean bill itself?....NO

what is the rush if you feel a long term bill will be passed shortly?

[rockfan7224]

I don't think I've ever seen DC such a mess. Obama chastises the Republicans when he thinks they're kicking the can down the road on issues, and then turns around and accuses them of holding Americans hostage when they want to provide a 1 year solution, and he's the one kicking the can down the road. (And then later declines the house speakers invitation to solve the mess). It's a lose lose situation with Obama.

It's disgusting how every move he's made in the last year, has been with the 2012 election in the back of his mind. Politics at its worst.

(Oh and this is the payroll tax that would have a difference of $40 a paycheck, roughly $960 a year-strangley about $34,000 short for a fundraiser with the "middle class warrior")

[Larry]

sorry, I doubt a firm the size of ADP would pull that with a company the size of ours. I saw the data, seems pretty legit due to the coding concerns to accommodate details and still unknown rules.

Yeah, it's awesome the amount of coding it takes to change a one-line mathematical formula.

(OK, maybe they have a separate line of code, for each kind of pay period. One for companies that pay weekly. Another line for bi-weekly companies. One for bi-monthly payrolls.)

Or there's other ways that Congress could solve the problem. They could pass a "just withhold taxes ar 4.2%, for now, and if it turns out, later, that we have one tax rate for part of the year, and another rate for part of the year, then we'll straighten the differences out when people file their 1040."

(Especially since, if they pass a partial-year extension, they'll have to do that, (straighten it out on the 1040), anyway.)

[NoVaO]

I don't think I've ever seen DC such a mess. Obama chastises the Republicans when he thinks they're kicking the can down the road on issues, and then turns around and accuses them of holding Americans hostage when they want to provide a 1 year solution, and he's the one kicking the can down the road. (And then later declines the house speakers invitation to solve the mess). It's a lose lose situation with Obama.

It's disgusting how every move he's made in the last year, has been with the 2012 election in the back of his mind. Politics at its worst.

Only one problem with your account. The GOP House isn't just getting hit by Obama. The GOP Senate is also hitting them hard. Mitch McConnell just came out and said pass the short term extension.

And don't be mistaken. This is not just a 2-month vs. a 1 year extension debate. If it was, the bill would have been passed. There are Republicans in the House who just want to get more concessions out of the President to pass this bill. Many of them aren't for this tax cut.

In addition, if Boehner would just bring this bill to the floor for an up or down vote, it would pass. There is a reason why he's not bringing the bill up for a vote.

(Oh and this is the payroll tax that would have a difference of $40 a paycheck, roughly $960 a year-strangley about $34,000 short for a fundraiser with the "middle class warrior")

Really? You're going to hit Obama on fundraisers? If there is one thing neither party can claim the high ground on, it's raising money for political campaigns.

[oisn1]

I think this entire thing is stupid.

I don't see the issues with the Pipeline. It would create jobs, allow for much needed reserves and if it does not come to the U.S., it will be sold to some other country and that will still be used so how does that really help any environmental concerns?

As far as the term of the agreement, that doesn't make much sense either. President Obama was the one who proposed a year long term for this to begin with. I don't really understand why the Democrats would oppose it. Two months is just not long enough. You won't even be able to implement it in two months. This is just a big waste of time if we are doing this for two months.

I am in favor of just letting them expire. They have not proven to improve the economy. They are simply robbing Social Security coffers and haven't we all agreed that if we just leave Social Security alone, it's fine? It's when we start screwing around with it that it creates an issue with both sides. There is no real benefit to doing it, so far as I can see.

This is all political.

Well Pipeline consideration is a concession for the 2 month extension, so that has been solved. Obama has to make a choice on it after 2 months which puts the onus on him.

Additionally, Obama proposed a year long extension, but Republicans crammed it full of "poison pill" riders. It was so bloated that they wouldn't have time to hash out their differences before the expiration. Thus they passed a small extension with a few concessions (like the Keystone pipeline) so they can come back and work on their differences. It's a big waste of time because our political parties cannot agree to compromise on how to fund these types of things.

I'm confused; so you want to let these tax cuts expire, which hit the middle class during a recession that is largely a matter of people not spending? Why was the repeal of the Bush tax cuts on the top class such a problem then? There is a benefit to this tax cut in that it puts more money in the hands of the middle class to spend more and help the economy grow. Ideally, the tax cut can then be repealed when the economy can withstand the loss a little better. So while there may be disagreement, there is a tangible benefit to the tax cut right now.

[@DCGoldPants]

Trickle Down, Baby, Trickle DOWN!

[SnyderShrugged]

Yeah, it's awesome the amount of coding it takes to change a one-line mathematical formula.

(OK, maybe they have a separate line of code, for each kind of pay period. One for companies that pay weekly. Another line for bi-weekly companies. One for bi-monthly payrolls.)

Or there's other ways that Congress could solve the problem. They could pass a "just withhold taxes ar 4.2%, for now, and if it turns out, later, that we have one tax rate for part of the year, and another rate for part of the year, then we'll straighten the differences out when people file their 1040."

(Especially since, if they pass a partial-year extension, they'll have to do that, (straighten it out on the 1040), anyway.)

You have no idea what is involved in a huge global holding companies payroll accruals and coding. Do you really think large companies farm out payroll processing at multiple millions of dollars of expense annually if it were as easy as you seem to believe?

whatever, I see your "contrarian" game is back in full swing. I wont play it with ya

[Larry]

You have no idea what is involved in a huge global holding companies payroll accruals and coding. Do you really think large companies farm out payroll processing at multiple millions of dollars of expense annually if it were as easy as you seem to believe?

whatever, I see your "contrarian" game is back in full swing. I wont play it with ya

I've written payroll accounting software.

And you know what? The code's the same whether you have 5 employees or 5 million. (The computer just performs the same calculations, 5 million times.)

[SnyderShrugged]

I've written payroll accounting software.

And you know what? The code's the same whether you have 5 employees or 5 million. (The computer just performs the same calculations, 5 million times.)

and you've written for 70 different countries and accounting for union staff/ non-union/ 43 different pension deductions, over 30 different medical, benefit, 401k, executive, vehicle personal use fees, matching gifts, service awards, stock savings incentive plans, annual bonuses etc, for all of them too, right? Still want to claim its "the same code?)

Only you could turn a simple statement on what came up just this week at my company as an issue that may be a concern, into some form of fabricated lie accusation.

like I said, you arent worth arguing with today, I dont have the energy nor the temperment at the moment.

[Larry]

and you've written for 70 different countries

we aren't discussing 70 different countries.

Just one.

and accounting for union staff/ non-union/ 43 different pension deductions, over 30 different medical, benefit, 401k, executive, vehicle personal use fees, matching gifts, service awards, stock savings incentive plans, annual bonuses etc, for all of them too, right?

And union and non-union people pay exactly the same payroll tax.

And we aren't talking about their 401K or their medical deductions or how many sick days they've got or whether they have direct deposit or if they have a bank or a credit union or whether they drive a Ford or a Chevy.

We're talking about exactly one thing:

How much FICA tax to withhold.

Example:

Right now, the formula is:

4.2% of gross pay, until the year-to-date amount withheld is $4,485.60.

The actual formula is an annual one. 4.2% of income,on the first $106,800 of income. Thus, the maximum amount of tax is 4.2% of $106,800, or 4.485.60

Note that this formula does not care if the employee is in a union, or has a 401K, or drives a personal vehicle, or has health insurance, drives a Chevy Volt, or is named "Tebow".

Under the proposed rule of "let's pretend like the two-month extension will go away after two months", that formula becomes:

4.2% of gross pay, until the year-to-date amount withheld is $6265.59.

Two months of 4.2% tax, and 10 months of 6.2%, gives an annual tax rate of 5.86%. 5.86% of $106,800 is $6265.59.

Notice the vast, complicated, difference between the "right now" formula, and the "if the two-month extension gets passed" formula?

----------

Note: The above formula are for companies who chose to withhold the full amount of FICA tax, in the beginning of the year, until the maximum tax has been withheld. (And then withhold zero for the rest of the year.) This option is unpopular with employees (And, since it only affects highly paid employees, it's unpopular with important employees), because it means that the employee's paycheck goes down every January, and stays down until the maximum tax has been withheld (when that happens depends on how much the employee makes), and then their paycheck goes up.

The other approach to withholding is to calculate withholding so that the same amount is withheld from each paycheck. This results in paychecks that don't fluctuate as much.

In those cases, assuming a two-week pay period, the "current" and "two-month extension" formulae are:

Current: 4.2% of gross pay, up to $172.52

Changed: 4.2% of gross pay, up to $172.52

Yes, that's right. If you're spreading even deductions throughout the year, then the formula doesn't change at all.

(That's why I chose to base my example around the less-desirable, and I assume, less-used, system.)

[Thiebear]

Some of you arn't following along:

Its not just an extension for 2 months

It creates a new tax status listed in a previous post so that rich people will not get over after two months while the middle class pay for 7 months so they created an 18, 500 bracket that needs to be coded into software.

Just like the Daylight Savings time.. three weeks comes with a price for the coders.

Two of the major union representation of the different fields (Also linked earlier) stated this was a bad idea (they were both asked earlier for expertise but was put in last minute.

The GAO never had a chance to even score this, it was put together so fast.