To Surtax With Love

posted at 11:05 am on November 29, 2011 by Jazz Shaw

Senator Chuck Schumer (D-NY) is once again leading the charge of bold new ideas on how to solve the nation’s fiscal woes. Previously we had been worried that Chuck would stick to his guns and propose a whole raft of new taxes, particularly on the most wealthy. Fear not! Schumer has a new plan, and it’s not a tax.

It’s a surtax. (See what he did there?)

U.S. Senate Democrats are planning to force a vote as early as this week on pairing a 3.25 percent surtax on income over $1 million with an extension and expansion of an expiring payroll tax cut.

The first vote on the $265 billion proposal will test Democrats’ resolve to implement the largest part of President Barack Obama’s jobs plan and Republicans’ willingness to block that effort…

“The Republicans are giving themselves whiplash on the issue of taxes,” Charles Schumer of New York, the Senate’s third-ranking Democrat, told reporters on a conference call. “The public is starting to figure out that Republicans have one position on taxes when it comes to the wealthy and another when it comes to everybody else.”

If Congress doesn’t act, a 2 percentage point cut in the payroll tax for workers will expire Dec. 31. The Democrats’ proposal would cut the 6.2 percent Social Security portion of the payroll tax in half for workers, cut the employer portion in half for companies on their first $5 million in wages and eliminate the employer tax on certain wage growth.

Republicans, including Mitch McConnell, are already firing back, labeling this move as another episode of class warfare which pits the middle class against the wealthy. But the Democrats are countering, essentially noting that Republicans are the ones who want any federal expenditures to be paid for, and insisting that this is precisely what they are doing. In order to continue the payroll tax holiday for the working class while not continuing to drain money from the Social Security system, they propose to pluck the difference from the pockets of those earning more than $1M.

As I noted yesterday, this presents a serious messaging challenge for the GOP. They have the votes to block this from every seeing the light of day on the Senate floor. (And both sides are apparently admitting that’s what is likely to happen.) But Schumer and his colleagues probably never had any expectation of actually getting this through. They’re continuing to make calls straight from the White House playbook and will use any such vote as ammunition to take their case to the public, claiming that the GOP wants to jack up taxes on the middle class while protecting the interests of the 1%.

It’s a fairly classic, populist theme. The problem is, once again… they call it “populist” for a reason.

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The SS cut will be expanded. For 2011 the cut was a reduction from 6.2% to 4.2% for the employee contribution. The extension they’re talking about reduced both the employer and employee to 3.1%. I’m self employed. So this will mean about $6600 less I will pay in SS taxes next year. I’m up for a little class warfare over this :)

angryed on November 29, 2011 at 11:14 AM

Gee, from the picture I thought this was going to be a story about how Chuck-you wants to register and then tax guns…….. right up until they decide to confiscate them.

Whoops, maybe just gave them a bad idea..

Chip on November 29, 2011 at 11:20 AM

OT: Meanwhile, Sherrod Brown, Dem senator from Ohio, was concerned last week about the NFL’s policy of blocking TV coverage in cities where the home team doesn’t sell out the game.

Also, when in northern Virginia last week, I read in WaPo that eight Dem senators were having a fit that Obama was providing an exception to religious employers to the Obamacare requirement that birth-control be available without co-pays or deductibles.

Democrats: laser-focused on the economy.

BuckeyeSam on November 29, 2011 at 11:22 AM

Anybody who does not have a reading comprehension deficit understands that you get out of social security what you put in – at least acccording to their tables and disregarding all the freeloaders in SSI, along with their crooked lawyers. To wit: Everyone will recieve a lower amount credited to them or their “account” and thusly receive a smaller social security check due only to this payroll reduction.

The payroll reduction is a moot and self rectifying point, unless social security really is a ponzi scheme. Then it hurts more than helps.

Old Country Boy on November 29, 2011 at 11:24 AM

Whatever the cutoff pointfor the surcharge, you can rest assured it’s twenty five cents more than whatever Chuckie makes.

Mr. Grump on November 29, 2011 at 11:30 AM

I dub thee Sir Tax, Robin Hood of Progressivia!

cartooner on November 29, 2011 at 11:32 AM

I dub thee Sir Tax, the Robin Hood robbin’ hood of Progressivia!

cartooner on November 29, 2011 at 11:32 AM

Fixed it.

cartooner on November 29, 2011 at 11:34 AM

Anybody who does not have a reading comprehension deficit understands that you get out of social security what you put in – at least acccording to their tables and disregarding all the freeloaders in SSI, along with their crooked lawyers. To wit: Everyone will recieve a lower amount credited to them or their “account” and thusly receive a smaller social security check due only to this payroll reduction.

The payroll reduction is a moot and self rectifying point, unless social security really is a ponzi scheme. Then it hurts more than helps.

Old Country Boy on November 29, 2011 at 11:24 AM

But I will be eligible for SS in 35 years. I’d rather have more money today since I know I will get NOTHING in 35 years. Hell, I’ll take a 100% SS tax cut right now in exchange I forfeit 100% of my SS benefits in the future.

angryed on November 29, 2011 at 11:35 AM

And true to form, the watchdog media fails to point out the irony of what democrats are attempting to do to their own entitlement holy grail.

gaius on November 29, 2011 at 11:35 AM

OT: Meanwhile, Sherrod Brown, Dem senator from Ohio, was concerned last week about the NFL’s policy of blocking TV coverage in cities where the home team doesn’t sell out the game.

That’s hardly a Dem thing, unfortunately.

That turncoat Snarlin’ Arlen made a dog-and-pony-show of the NFL a few years back in a failed attempt to bolster his chances at re-election, trying to make a federal case out of “Spygate” in order to stoke Philly fans’ claims that they got cheated out of a Super Bowl win against the Patriots.

Combine that with the useless Orrin Hatch’s meddling in the BCS because Utah was a non-BCS team until this season and it’s a bipartisan clusterf*ck.

teke184 on November 29, 2011 at 11:36 AM

The payroll reduction is a moot and self rectifying point, unless social security really is a ponzi scheme. Then it hurts more than helps.

Old Country Boy on November 29, 2011 at 11:24 AM

Buying our votes with our own money.

unclesmrgol on November 29, 2011 at 11:38 AM

angryed on November 29, 2011 at 11:14 AM

I feel the same way. But on the other hand, that just means SS funding has to come from somewhere else. I have no doubt that “somewhere else” will eventually be the very taxpayers they’re trying to help. Either that or SS becomes insolvent very quickly.

To me it just looks like another “shuffle the money” game. All it does is make it look like taxes are being reduced in one place, while they take more money from somewhere you’re not looking.

taznar on November 29, 2011 at 11:42 AM

I feel the same way. But on the other hand, that just means SS funding has to come from somewhere else. I have no doubt that “somewhere else” will eventually be the very taxpayers they’re trying to help. Either that or SS becomes insolvent very quickly.

To me it just looks like another “shuffle the money” game. All it does is make it look like taxes are being reduced in one place, while they take more money from somewhere you’re not looking.

taznar on November 29, 2011 at 11:42 AM

You’re right. But if I can get something in my pocket today, at least I know I have that. Otherwise my taxes will go up in the future AND I pay more into SS.

With this, at least I know I get something out of it.

angryed on November 29, 2011 at 11:44 AM

unless social security really is a ponzi scheme.

It is a ponzi scheme. Payroll tax – Current benefits for past generation = free stuff for current generation!!

The reduction in future benefits must be made explicit in the law that reduces the payroll tax. Otherwise, future politicians will just waiver away the reduction – Don’t want to force the elderly to eat dog food in their $200K RV.

deadman on November 29, 2011 at 11:51 AM

I will take you surtax if the Democrats agree to some serious federal spending. How about eliminating the departments of Education, Energy and Housing, just for a starter.

SC.Charlie on November 29, 2011 at 12:04 PM

How about Republicans offer a surtax of 90% on anyone who is a registered Democrat?

evilned on November 29, 2011 at 12:13 PM

How about Republicans offer a surtax of 90% on anyone who is a registered Democrat? – evilned on November 29, 2011 at 12:13 PM

Just apply your 90% tax to people in the entertainment industry who think that being a public teacher is a lousy job. I know a lot of public school teachers who have complained over the years about their jobs, but are now grateful to have a job with a government guaranteed pension with benefits.

SC.Charlie on November 29, 2011 at 12:32 PM

Isn’t there already a 5+% surtax on people making over $1 million coming in 2013 from Obamacare? They’re never going to stop.

drewwerd on November 29, 2011 at 12:34 PM

Lovley. Either raise taxes on the job creators and screw the economy, or the middle class gets it.

Evil, thy name is democrat,

Hard Right on November 29, 2011 at 12:43 PM

Hold on – this doesn’t seem to add up, they are going to get $265 billion a year from a 3.25% surtax on income over $1 million? Repealing the “Bush tax cuts for the rich” only generates ~$70 billion a year.
I’m thinking if you looking into the bill, it spends $265 billion next year and pays for it with surtax revenues over 10 years, typical Democrat spend now, worry about paying for it later BS. How do you think we’ll pay for it when it’s up for cancellation in 2013?

Vitalis on November 29, 2011 at 12:52 PM

Which is why the GOP message should be a constant chorus of: Even if we took all of the 1%’s money we couldn’t pay for the federal government at it’s current size. The whole class warfare discussion is a distraction from the fact the our federal government is so big that it’s now not even possible to pay for it.

gwelf on November 29, 2011 at 1:00 PM

Which is why the GOP message should be a constant chorus of: Even if we took all of the 1%’s money we couldn’t pay for the federal government at it’s current size. The whole class warfare discussion is a distraction from the fact the our federal government is so big that it’s now not even possible to pay for it.

gwelf on November 29, 2011 at 1:00 PM

++

GaltBlvnAtty on November 29, 2011 at 1:15 PM

But I will be eligible for SS in 35 years. I’d rather have more money today since I know I will get NOTHING in 35 years. Hell, I’ll take a 100% SS tax cut right now in exchange I forfeit 100% of my SS benefits in the future.

angryed on November 29, 2011 at 11:35 AM

I’m down with that, especially as a 1099, it all comes out of my income.

AH_C on November 29, 2011 at 1:16 PM

Which is why the GOP message should be a constant chorus of: Even if we took all of the 1%’s money we couldn’t pay for the federal government at it’s current size. The whole class warfare discussion is a distraction from the fact the our federal government is so big that it’s now not even possible to pay for it.

gwelf

Too bad the GOM won’t report that. They’ll bury it as usual.

Hard Right on November 29, 2011 at 2:15 PM

Which party has failed to come up with a budget for more than one thousand days, and which president has been buying people’s votes with tax ‘holidays’ from year to year?

Oh, yeah. That’s right.

madmonkphotog on November 29, 2011 at 3:14 PM

Fine, then republicans can add stuff to it..like eliminate the EPA and the NLB along with:

I will take you surtax if the Democrats agree to some serious federal spending. How about eliminating the departments of Education, Energy and Housing, just for a starter.

SC.Charlie on November 29, 2011 at 12:04 PM

tinkerthinker on November 29, 2011 at 4:01 PM