Oops: Two-month payroll-tax holiday would be a logistical nightmare, say experts

posted at 4:11 pm on December 19, 2011 by Allahpundit

Righties on Twitter are crowing that this means Reid’s bill is DOA, but I’m not so sure. Don’t forget, The One has been known to stand behind programs that even his own cabinet says are surefire disasters in the making. If he and Reid let little things like unworkable math or Kafkaesque bureaucratic nightmares stop them from passing legislation, we wouldn’t have ObamaCare, now would we?

Pete Isberg, president of the [nonprofit National Payroll Reporting Consortium] today wrote to the key leaders of the relevant committees of the House and Senate, telling them that “insufficient lead time” to implement the complicated change mandated by the legislation means the two-month payroll tax holiday “could create substantial problems, confusion and costs affecting a significant percentage of U.S. employers and employees.”…

The two-month payroll tax holiday, which the president has said should be extended throughout 2012, will mean that wages would face a Social Security tax of 4.2 percent during January and February, but it would increase to 6.2 percent in March.

Isberg wrote that “many payroll systems are not likely to be able to make such a substantial programming change before January or even February. The systems affected tend to be highly complex, normally requiring at least ninety days for a change of this magnitude for software testing alone; not to mention analysis, design, coding and implementation.”

That’s not the only group that says two months is too short. The National Association of Wholesale-Distributors wrote to Congress today to second the conclusions of the NPRC, so in case there was any lingering doubt about how tonight’s House vote will go, this should eliminate it. The only mystery now is how partisan the roll will be. Will House Democrats stick with Reid by endorsing a policy that would cause chaos to payrolls across the country or will they bail too, backing Reid into a corner? And what happens now to Senate Republicans like Scott Brown who have been grumbling that Boehner’s reversal on the two-month extension is “irresponsible and wrong”? Do they cave under the weight of the NPRC verdict or press on for another dumb, lazy stopgap measure? Only one thing is certain: If not for one last round of congressional histrionics and floor drama, there’d be nothing to blog about this week at all.

Here’s Dick Lugar encouraging Boehner and the House to cave because it’s “best for the country” or whatever. Exit question: Congress isn’t actually going to deadlock over a tax cut for the middle-class, is it? Geez. Click the image to watch.


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

seems like every day theres a new version of these headlines with Obama… sigh

Drunk Report on December 19, 2011 at 4:14 PM

The lot of them would f**k up a one man parade. Seriously.

ICanSeeNovFromMyHouse on December 19, 2011 at 4:14 PM

Bread and Circuses.

WitchDoctor on December 19, 2011 at 4:14 PM

Just make it a friggen permanent tax cut!

NotCoach on December 19, 2011 at 4:14 PM

really curious what happens to Lugar… does the GOP nominee support him and then get rid of him by appointing him to a position in his Admin? thats the only out i can think of to prevent another Murkowski situation…

Drunk Report on December 19, 2011 at 4:15 PM

My God, I can’t wait to vote against Lugar AND Obama. But, back to the topic….EVERYTHING that Obama has done is a logistical nightmare. More regulations, more taxes, two thousand page bills….what’s not to like?

search4truth on December 19, 2011 at 4:16 PM

I am SO glad that our leadership has NO clue about how things actually work in the REAL world!

Lew in Colorado on December 19, 2011 at 4:17 PM

It would be fun watching this epic failure of a president if he weren’t my president.

Daemonocracy on December 19, 2011 at 4:18 PM

It isn’t a “Tax cut for the middle class”, it is electioneer pandering of the most despicable sort. You should know better AP.

Mord on December 19, 2011 at 4:19 PM

The 2-month deal is a logistical nightmare, but the current Occupyer is a National Nightmare.

ABO 2012

Key West Reader on December 19, 2011 at 4:21 PM

This is what happens when you elect a community organizer for president.

angryed on December 19, 2011 at 4:21 PM

This from the smartest president evah!

Are they sure that a few of the 57 states couldn’t find a way to make it work?

singlemalt 18 on December 19, 2011 at 4:21 PM

Oh wait, you mean a mad-dashed rush at the 11th-hour to try to come up with a work-around for a kludge for patch for a bandaid on a broken and depressed economy isn’t going to work??? Who’d of thunk that….

….any generic 6yr-old, that’s who…..

Can we just get on with the economic collapse already?? I’m eager to see how the post-apocalyptic shelter i built in the basement is going to perform…

powerpickle on December 19, 2011 at 4:23 PM

OMG!!! Do I ever hate this fu****g loser we have in the WH.

NapaConservative on December 19, 2011 at 4:24 PM

I hate being reminded that our dear leader has never run a business or had to make a payroll.

He’s like a really bad architect that designs things that can’t be built.

SnowSun on December 19, 2011 at 4:24 PM

This isn’t a tax cut. It’s yet another transfer of wealth from producer to moochers. The lower classes will contribute only 4.2% instead of 6.2%. But their benefits won’t be lowered. Guess who make up the difference? That’s right, Uncle Sam.

This is a welfare scheme and nothing more.

angryed on December 19, 2011 at 4:25 PM

Relax, people. Moochelle is enjoying her time in Hawaii. That’s all that matters, right?

Key West Reader on December 19, 2011 at 4:28 PM

We need systemic change not more gimmicks and short term partial fixes. This tax code has been fixed so many times it is all duct tape.

Grunt on December 19, 2011 at 4:29 PM

Obama’s handlers’ chief concern is next election, next election, next election, next election, next election. They don’t give a good god damn what’s best for this nation and many are in fact working to destroy it as comprised.

rayra on December 19, 2011 at 4:29 PM

Just make it a friggen permanent tax cut!
NotCoach on December 19, 2011 at 4:14 PM

How does Social Security get funded? This is a really poor way to provide a “tax cut”. We never should have gone along with this in the first place. What we need is a complete reform of the system, not a bunch of vote-buying gimmicks which only make our deficit/debt situation worse.

Buy Danish on December 19, 2011 at 4:30 PM

Yeah, accounting/payroll nightmare and Obama is a SCOAMF.
Not judgin’, just sayin’.

Peppa Pig on December 19, 2011 at 4:31 PM

“I hate being reminded that our dear leader has never run a business or had to make a payroll.”

Unfortunately, the same is true for many of the Senators (both Republican and Democrat) who cobble together these monstrosities.

Suppose the House were to agree to what was passed out of the Senate:

Over the next couple of weeks, companies will have to alter their payroll systems to implement a plan that may completely change in two months, then have to pay to alter the systems again.

In a way, this is a tax on every company that does payroll, but will the media mention that?

Companies should not be subjected to the whims of “two month” plans by the government.

Reno_Dave on December 19, 2011 at 4:31 PM

Memo to Senate & House

Go home!

Memo to Republicans

The people getting the largest benefit from the payroll tax reduction and unemployment are not going to vote for you.

Go home!

Have a Merry Christmas!

dhugh on December 19, 2011 at 4:33 PM

When does Obama start demonstrating his Harvard “genius”?

I REALLY want to see his transcripts the lying POS.

Roy Rogers on December 19, 2011 at 4:33 PM

I’m hoping this is an attempt by the Republican leadership to save some money by keeping Obama in Washington, versus his $4 million (plus) trip to Hawaii. Maybe he can work on presenting a balanced budget for the next fiscal year – leading to a recovery of epic proportions as the US and the world realize that a budget really can be balanced. Or present a proposal that cuts every SS recipient’s check by an amount proportionate to the tax cut offered. It appears to me to be about a 20 percent cut in taxes – mirror that to every recipient of the SS funds and then watch the howling begin.

Bernfp on December 19, 2011 at 4:36 PM

Buy Danish on December 19, 2011 at 4:30 PM

In principle we shouldn’t have gone along with it, but attaching the pipeline to it was genius I must say. This purely political move by the White House blew up in his face. Now it is down to 2 months, as if that would do anything for the economy.

Republicans should just be telling it like it is, Obama is trying to loot SS for short term political gain.

Daemonocracy on December 19, 2011 at 4:36 PM

Scott Brown who have been grumbling that Boehner’s reversal on the two-month extension is “irresponsible and wrong”

Scott Brown is typically irresponsible and wrong.

Generally speaking, re-tooling your payroll system every time The Won has some genius electorally-related idea is a very bad proposition for companies. It introduces unnecessary cost and risk.

But then the Won and his team have never worked in the private sector, never met a payroll, and have no idea wth they are doing most of the time.

CorporatePiggy on December 19, 2011 at 4:37 PM

On October 18, 2007, Durbin, along with Republican co-sponsors Charles Hagel and Richard Lugar, introduced the DREAM Act as S.2205.

jaime on December 19, 2011 at 4:40 PM

RINO to the RESCUE!!!

winston on December 19, 2011 at 4:40 PM

How does Social Security get funded? This is a really poor way to provide a “tax cut”. We never should have gone along with this in the first place. What we need is a complete reform of the system, not a bunch of vote-buying gimmicks which only make our deficit/debt situation worse.

Buy Danish on December 19, 2011 at 4:30 PM

How do we fund SS now? I got news for you, and it may shock you, but all federal taxes go into the same pool of money. Lowering income tax rates or Social Security rates amounts to the same damn thing. There are no separate accounts in Washington.

NotCoach on December 19, 2011 at 4:41 PM

The Dream Act was re-introduced in both chambers of Congress on Thursday, March 26, 2009, during the 111th Congress. Introducing the bill were Senators Dick Durbin (D-IL), Richard Lugar (R-IN), Harry Reid (D-NV), Mel Martinez (R-FL), Patrick Leahy (D-VT), Joseph Lieberman (I-CT), Ted Kennedy (D-MA), and Russ Feingold (D-WI)

jaime on December 19, 2011 at 4:43 PM

It isn’t a “Tax cut for the middle class”, it is electioneer pandering of the most despicable sort. You should know better AP.

Mord on December 19, 2011 at 4:19 PM

And it’s a cynical ploy spun even by the media as “poor little taxpayers, less money at Christmas” when it means that less is being deducted for the SS trust fund.

As such, it makes the “less of a raise” == “budget cut” math look like child’s play.

I. Hate. Them. All. Of. Them.

The War Planner on December 19, 2011 at 4:43 PM

Will House Democrats stick with Reid by endorsing a policy that would cause chaos to payrolls across the country

The modus operandi of the democrat party.

jukin3 on December 19, 2011 at 4:44 PM

Isberg wrote that “many payroll systems are not likely to be able to make such a substantial programming change before January or even February. The systems affected tend to be highly complex, normally requiring at least ninety days for a change of this magnitude for software testing alone; not to mention analysis, design, coding and implementation.”

What’s the problem? Sounds like it’s going to create or save thousands of jobs. President Obama… don’t waste this opportunity. Get Pelosi on this pronto.

Walter L. Newton on December 19, 2011 at 4:44 PM

Impracticalibility has never stopped the Senate from it’s meddling with the economy before.
It’s sort of de rigueur, isn’t it?

Another Drew on December 19, 2011 at 4:45 PM

This would be touted as a 32% tax cut, giving the appearance of being the largest single tax cut in history, when it would barely register as a blip in anyone’s paycheck.

As the only “tax” which is deducted from every paycheck, regardless of income bracket, and with a ceiling of contribution, this “cut” impacts only the dependent class. It’s a vote pander, nothing more. And while the individual “contribution” would be cut, the slate of payments to recipients wouldn’t change, meaning that the ever-growing deficit in SSA inflow to outflow would be paid for by real taxpayers.

RRR4VR on December 19, 2011 at 4:46 PM

NO! YOU ARE LYING!
It can’t be a logistical nightmare!
Every member of this administration IS THE EXPERT!
Every appointee and cabinet member and advisor has triple PHD’s and taught at an Ivy League University! YOU ARE freebasing SMACK!
What are you talking about? Just do it…NOW! We can’t wait!

KOOLAID2 on December 19, 2011 at 4:46 PM

You know what obama’s deal is here. Why don’t we shout it out more?

41% don’t pay federal income taxes. Now Obama wants them not to pay Payroll taxes either. He wants the ‘rich’ to pay them.

Obama’s so dishonest he won’t even hint at what he’s trying to do here.

MaggiePoo on December 19, 2011 at 4:55 PM

Democrats are always too clever by half. They reduced it to 2 months as part of a Schumer plan to harp on the class warfare theme early next year.

Lonetown on December 19, 2011 at 4:58 PM

How do we fund SS now? I got news for you, and it may shock you, but all federal taxes go into the same pool of money.

Thank you Lyndon Johnson and the Democrats.

:\

MaggiePoo on December 19, 2011 at 4:58 PM

“insufficient lead time” to implement the complicated change mandated by the legislation means the two-month payroll tax holiday “could create substantial problems, confusion and costs affecting a significant percentage of U.S. employers and employees.”…

I thought all they were doing is continue the status quo

Isberg wrote that “many payroll systems are not likely to be able to make such a substantial programming change before January or even February. The systems affected tend to be highly complex, normally requiring at least ninety days for a change of this magnitude for software testing alone; not to mention analysis, design, coding and implementation.”

So will they have time to make those changes in two weeks if the tax cut is not extended?

Why the emphasis on ‘non profit’? So what? Cant be non profit and partisan?

Isserley on December 19, 2011 at 5:00 PM

On this one whom do you believe; The MSM experts or the WH experts its a real pickle.

RickB on December 19, 2011 at 5:03 PM

If he and Reid let little things like unworkable math or Kafkaesque bureaucratic nightmares stop them from passing legislation, we wouldn’t have ObamaCare, now would we?

Isn’t that a requirement of their legislation?

As for Lugar. When is that imbecile going to resign FOR THE GOOD OF THE COUNTRY?

GarandFan on December 19, 2011 at 5:04 PM

The bigest joke of this silly Keynsian wet dream called the ‘payroll tax holiday’ is how it’s being funded. The $35B it costs to give everyone in the US a 60 tax holiday is being covered by a small tax added to the cost of obtaining a mortgage from Fannie, Freddie or FHA. When you read the language of the bill, it states that this will have the effect of encouraging borrowers to use private lending sources for mortgages other than the three GFE’s mentioned.

There are no other sources for mortgage funding folks. Other than paying pionts and vig to Nunzio down at the bar , Fannie, Freddie and FHA at it my freinds.

Who comes up with this stuff? It’s not just dumb, it’s bizarre.

DrW on December 19, 2011 at 5:05 PM

A. Is it to be 4.2% of the first $100,000 of wages?
B. Is it to be 6.2% of the first $100,000 of wages?

To those who have achieved nothing more than a Poli Sci degree, and think you can just snap your fingers and things just happen, here’s a clue.

Assuming the above can be programmed into a payroll system, what leftist morons have now built into the SS system is that the richer you are, the lower your rate. It’s those who hit the max in 2 months WILL pay 4.2%. Those who don’t will pay more the lower the income (more of it that would be subject to the 6.2% rate March-December.

MNHawk on December 19, 2011 at 5:07 PM

I’m glad I don’t have to maintain payroll software anymore.

JimK on December 19, 2011 at 5:15 PM

Just be glad they do not try a progressive tax change. Over the next 12 months the rate changes up 1/12% every month. So in May it would be 5/12 increase and in June it will be 1/2 of the full cut. Over the next 12 months the tax is returned to the full amount that the cut reduced it by. One-twelfth per month.

tjexcite on December 19, 2011 at 5:22 PM

When does Obama start demonstrating his Harvard “genius”?

I REALLY want to see his transcripts the lying POS.

Roy Rogers on December 19, 2011 at 4:33 PM

As Baracks employers, why can’t we see his transcripts?

Trust me, if his grades were good, they would have rubbed them in out faces for the last three years.

esnap on December 19, 2011 at 5:22 PM

…telling them that “insufficient lead time” to implement the complicated change mandated by the legislation means the two-month payroll tax holiday “could create substantial problems, confusion and costs affecting a significant percentage of U.S. employers and employees.”…

“Not my problem! Now, where are my golf clubs? I got me some well deserved vacaycay comin up. MMMMMM MMMMMMM MMMMMM” – Barack Insane Obama

sicoit on December 19, 2011 at 5:25 PM

Buy Danish on December 19, 2011 at 4:30 PM

SS is funded by you, me and everyone else who has a job. WE pay into it and I WANT MY DAMM MONEY BACK!

sicoit on December 19, 2011 at 5:29 PM

The Cloward-Piven-Obama-Reid-Pelosi Plan moves to Phase II. We tried to bankrupt the Treasury but they just kept printing more money and borrowing more from China — ruthless bastards. So now we’re going to bankrupt the Social Security system first to create widespread panic among the oldies, and then move back to Treasury.

Jaibones on December 19, 2011 at 5:35 PM

This is a welfare scheme and nothing more.

angryed on December 19, 2011 at 4:25 PM

End of story. Again folks, go back to August of this year. Obama threatened to cut SS checks when the numbers clearly showed we take in about $870 million/month and pay out about $825 million. The “lockbox” concept is dead but the funding mechanism is not. The dems are desperatly trying to tie everybody to the general revenue and pick winners and losers based on that.

Then watch the people fall in line.

DanMan on December 19, 2011 at 5:43 PM

They need to scrap the payroll tax holiday altogether. Social Security taxes collected are paid out immediately to those that are collecting Social Security. The whole thing was a boondoggle to begin with. They are underfunding the Social Security System!

And, as a former CPA the whole thing is a nightmare for those who have to collect and pay the taxes. Especially if it is going to expire on February 29th. I can’t imagine what the new Form 941 will look like. Form 941 is filed quarterly by employers to reconcile deposits with what should have been paid-in. The IRS will have to concoct a form to deal with two months of collecting at the reduced rate and one month of collecting at the old (correct) rate.

Everyone involved in this is an idiot.

SC.Charlie on December 19, 2011 at 5:54 PM

So many ways to screw up, so little time.

Finbar on December 19, 2011 at 5:54 PM

Having some experience with payroll systems for large companies, I can relate to the “unnecessary cost” that this type of legislation introduces to the economy. You don’t “mess” with people’s paychecks. Companies know this. So companies need to test these changes and therefore allocate resources to manage this type of payroll change. It is a tax on business.

bubbafromkc on December 19, 2011 at 6:17 PM

In principle we shouldn’t have gone along with it, but attaching the pipeline to it was genius I must say.
Daemonocracy on December 19, 2011 at 4:36 PM

Agreed.

How do we fund SS now? I got news for you, and it may shock you, but all federal taxes go into the same pool of money. Lowering income tax rates or Social Security rates amounts to the same damn thing. There are no separate accounts in Washington.
NotCoach on December 19, 2011 at 4:41 PM

It’s not the same thing. 47% were paying no federal income taxes before this gimmick – the only tax they paid (assuming they had jobs which were on the books) was their contribution to S.S., but Obama has effectively arranged it so the vast number of Americans will pay nothing (and raise bloody hell when this gimmick expires). If this isn’t fixed they will eventually collect Social Security without ever contributing a dime – which makes it a welfare program. Moreover, this does nothing to promote economic growth and will be a net loss to the Treasury (unlike tax cuts which follow the Laffer Curve and bring in more revenue).

Buy Danish on December 19, 2011 at 6:39 PM

Two-month payroll-tax holiday would be a logistical nightmare, say experts

…where “experts” means “all business operators and anyone else with a working brain”!!!

landlines on December 19, 2011 at 6:39 PM

SS is funded by you, me and everyone else who has a job. WE pay into it and I WANT MY DAMM MONEY BACK!
sicoit on December 19, 2011 at 5:29 PM

Calm down. You sound like a fracking Occupier.

Buy Danish on December 19, 2011 at 6:41 PM

Bret Baier discussing logistics fiasco now…

Buy Danish on December 19, 2011 at 6:43 PM

It might help if the “it’s been over 900 days since the Democrat controlled Senate passed a budget” would actually PASS. A. BUDGET.!

locomotivebreath1901 on December 19, 2011 at 7:09 PM

It is clear to me the President does not have a clue, about anything. Adverse detail or any real work, he is a total spectator/cheerleader and a poor one. All he really want to do is ride in the big jet. How did this guy get there? We are, clearly now, the dumbest electorate ever. Let’s not extend this void of competence in 2012…pleeeze.

StevC on December 19, 2011 at 7:20 PM

doesn’t matter, the gop will still get the blame….

*sigh*

cmsinaz on December 19, 2011 at 7:32 PM

as Dr K said tonight on special report, the gop is right on principle and policy but the dems will have the politics on their side

dang it

cmsinaz on December 19, 2011 at 7:34 PM

To me Scott Brown = Mitt Romney… And I will never vote for a Scott Brown…

Y314K on December 19, 2011 at 7:48 PM

This is what happens when you elect community agitators instead of job creators.

SouthernGent on December 19, 2011 at 8:02 PM

Don’t they research these things at all? Why in the world would they go along with two stupid months in the first place. It makes Republicans look like fools to agree. I guess there is an obvious reason why they look stupid.

Cindy Munford on December 19, 2011 at 8:08 PM

To me Scott Brown = Mitt Romney… And I will never vote for a Scott Brown…
Y314K on December 19, 2011 at 7:48 PM

You like Elizabeth Warren?

Buy Danish on December 19, 2011 at 8:35 PM

You like Elizabeth Warren?

At least she won’t try to kiss me every for years and then forget about me for 3 1/2 …

U seem to think Elizabeth’s voting record would differ from Scot’s…

Y314K on December 19, 2011 at 8:54 PM

We are so absolupositively freegin screwed – this is unbelievable.

These “honorable” folks are spending OUR money arguing over a measly 2 month “payroll tax holiday”? Europe is about to implode, we have a 15 TRILLION dollar national debt and they are arguing about something that they will have to argue about AGAIN in another 2 months???

Yeah… This is productive. Two more months of a “payroll tax holiday” is going to really kick start the economy and we’ll all be singing “Happy Times are Here Again!”

Good grief, Charlie Brown…

climbnjump on December 19, 2011 at 9:54 PM

O.T. — Has anyone else seen anything about *this*??

Obama Gives Illegal Aliens Phones for Votes | THE PATRIOT UPDATE | December 19, 2011

“Our tax-dollars at work,” huh? The *funny* (weird??) part is a rumor attached to it that’s sayin’ the phones they’re giving away have GPS-chips that make ‘em *traceable* — now what self-serving “undocumented immigrant” would ever even *touch* that action?? Enquiring minds…

“Cogito, ergo TEA Party!” ~ DeepWheat

DeepWheat on December 19, 2011 at 10:55 PM

Calm down. You sound like a fracking Occupier.

Buy Danish on December 19, 2011 at 6:41 PM

Get your hearing checked. Occupiers haven’t paid for anything and don’t deserve anything but a truncheon in the stomach.

MelonCollie on December 19, 2011 at 11:46 PM

Why is no one pointing out endlessly that the $1000 is money not going into the already bankrupt Social Insecurity system. If you actually believe that you are putting money into a SS account for you, that means that you are screwing yourself out of $1000 every year!

flytier on December 20, 2011 at 8:28 AM

Chaos and uncertainty. That’s what Obama wants for businesses. Cloward and Piven is REAL, folks.

bob77 on December 20, 2011 at 9:25 AM

Employers have to report payroll taxes quarterly on form 941. Imagine the hoops that will have to added to that form to subdivide the payrolls into monthly amounts with different tax rates.

MTinMN on December 20, 2011 at 10:22 AM

A. Is it to be 4.2% of the first $100,000 of wages?
B. Is it to be 6.2% of the first $100,000 of wages?

To those who have achieved nothing more than a Poli Sci degree, and think you can just snap your fingers and things just happen, here’s a clue.

Assuming the above can be programmed into a payroll system, what leftist morons have now built into the SS system is that the richer you are, the lower your rate. It’s those who hit the max in 2 months WILL pay 4.2%. Those who don’t will pay more the lower the income (more of it that would be subject to the 6.2% rate March-December.

MNHawk on December 19, 2011 at 5:07 PM

Holy Crap. I didn’t think of this.

cptacek on December 20, 2011 at 8:07 PM

Having some experience with payroll systems for large companies, I can relate to the “unnecessary cost” that this type of legislation introduces to the economy. You don’t “mess” with people’s paychecks. Companies know this. So companies need to test these changes and therefore allocate resources to manage this type of payroll change. It is a tax on business.

bubbafromkc on December 19, 2011 at 6:17 PM

If my boss came to me and said “You have to program for this change in law, that hasn’t even been passed yet, test it and have it ready by Jan 1″ I would laugh at him. Then cry, because I wouldn’t be getting Christmas off.

cptacek on December 20, 2011 at 8:08 PM