On Monday the leadership of the House GOP said it planned to support a payroll tax cut extension through the end of this year. It would support the payroll tax cut without adding unrelated policies or making offsetting cuts. It is a surprising turn of events. Congress could pass a bipartisan proposal related to 2012 taxes well before deadline and without a huge debate about who pays what when. A compromise related to cuts in 2012 taxes is surprising.
This doesn’t mean that Republicans and Democrats are thrilled with each other when it comes to payroll tax cuts. Speaker of the House John Boehner, majority leader Eric Cantor and Kevin McCarthy, whip, read a statement together. The statement said that because an agreement hadn’t been reached, they decided to put into place a backup plan that extends payroll tax cuts through 2012. This will affect 2012 taxes. With the backup plan in place, negotiations on offsets and unemployment insurance will continue. The statements said that a measure for House consideration could be scheduled.
Despite Republican leadership support, the payroll tax cuts is not set in stone. Republicans might not have the support of conservatives in their party, Blue Dog Democrats could pull their support, and Democrats might not want the payroll tax cuts separated from unemployment insurance. Even though this is still not a done deal and may not affect 2012 taxes, it is remarkable that an unconditional tax holiday was passed by the House GOP. It has been a while since anyone in the government has used the word unconditional and meant it.
- TurboTax Free Edition Takes The Hassle Out Of Filing Your Taxes (2012taxes.org)
- Best iPhone Apps to Help You with Your Taxes (2012taxes.org)