Current Weather
The Spy FM

Payroll Tax Holiday May Not Survive Year’s End

Filed by KOSU News in US News.
September 5, 2012

An occasional series, Fiscal Cliff Notes breaks down the looming “fiscal cliff” of expiring tax cuts and deep automatic spending cuts set to hit around the first of year.

If you work, you’ve probably been getting this tax break: Since January 2011, the government has knocked 2 percentage points off the payroll tax.

For someone making $50,000 a year, the payroll tax holiday works out to about $20 a week.

“We definitely notice it,” says Steve Warner of Winter Haven, Fla., while on vacation with his family recently in the nation’s capital.

“Most of what we use that for [is] just our day-to-day bills that we have. I mean, it’s not like we put it away in savings or anything. It’s just more money that we can actually use for gas, food and certain things like that.”

That’s exactly what Congress and the president had in mind when they created the holiday. But it ultimately didn’t have the effect many economists had hoped for, because two years in a row, in the spring, gas prices spiked and ate up a lot of that extra spending money.

“It didn’t really help support stronger growth, but it certainly helped the economy,” says Mark Zandi, chief economist at Moody’s Analytics. “Without it we’d be in a measurably worse place.”

But even as the economy appears to still be in a rut, there’s little appetite to extend the tax holiday — with its $95 billion price tag — one more time, says Zandi.

A year ago, Zandi was among those pushing for an extension. Now he says it’s time to let it expire on Dec. 31. And unless something changes, it will.

Caitlin Morgan, a mother of four boys from Eugene, Ore., says for her family, the extra money was plowed into food and other living expenses. But she seems to accept that the holiday may well be over at the end of the year.

“[The] government needs to prop itself up,” she says. “We need to get out of this debt. So you know, if we need to cut a few corners for that to happen, then that’s OK. I’m OK with that.” [Copyright 2012 National Public Radio]

Leave a Reply

1PM to 2PM Talk of the Nation

Talk of the Nation

Journalist Neal Conan leads a productive exchange of ideas and opinions on the issues that dominate the news landscape.

Listen Live Now!

2PM to 3PM PRI's The World

PRI's The World

Get a fresh perspective of people, events and trends that shape our world. Host Lisa Mullins covers a wide range of topics, including science, business, technology, sports, art and music.

View the program guide!

3PM to 6PM All Things Considered

All Things Considered

For two hours every weekday, All Things Considered hosts Robert Siegel, Michele Norris and Melissa Block present the program's trademark mix of news, interviews, commentaries, reviews, and offbeat features.

View the program guide!

Upcoming Events in your area (Submit your event today!)

Streaming audio and podcasts

Stream KOSU on your smartphone

Phone Streaming

SmartPhone listening options on this page are intended for many iPhones, Blackberries, etc. with low-cost software applications available to listen to our full-time web streams, both News on KOSU-1 and Classical on KOSU-2.

Learn more about our complete range of streaming services

We're perfecting the patient experience - Stillwater Medical Center