Digital News Report – Democrats and Republicans in Congress agreed to an extension of the payroll tax holiday – at least temporarily.
The legislation, which would extend the payroll tax cuts for just two months, has been met with bewilderment. The National Payroll Reporting Consortiums says the bill will “create substantial problems, confusion and costs affecting a significant percentage of U.S. employers and employees.”
If the payroll tax cut is not extended throughout the rest of 2012, many employers will need to adjust their system for reporting, accounting and collecting the tax. Most companies are used to working on a year-by-year basis, not on a month-to-month system.
“Establishing the proposed Social Security Taxable Wage limit of $18,350, to which a reduced 4.2% rate would apply through February 29, 2012, would require substantial reprogramming of computer systems,” the NPRC said in their statement.
During the debate, Republicans and Democrats saw their roles reversed. Many Republicans didn’t support the extension while Democrats did. Tied to the bill was an extension of unemployment benefits.
Republicans are now saying the temporary agreement will give both sides the opportunity to work out the kinks for an extension that will last all year. House Speaker John Boehner (R-OH) has now publicly called on President Obama to urge members of Congress to agree to a year’s worth of cuts.
“The House passed legislation last week to extend the current payroll tax holiday for a full year, extend and reform unemployment insurance (UI) for a full year, ensure American seniors still have access to their doctors for two years, and advance other measures we believe will boost private-sector job creation,” Boehner said Saturday.
By: Tim Edwards