Lowey Calls for Bipartisan Effort to Extend Payroll Tax Cut

Rep. Nita Lowey (second from left) was joined by (left to right) Joseph Mayhew of Communications Workers of America, Rachel Estroff of the advocacy group Westchester for Change and Pat Puleo of New York State United Teachers in calling for an extension of the payroll tax holiday.

With Democratic and Republican lawmakers butting heads over the extension of the payroll tax cut, Rep. Nita Lowey called on Congress to extend the tax reduction before going home for the holidays.

“It is unfathomable, it is hard to believe, that some in the Congress would prefer to play politics and let the payroll tax holiday expire and unemployment insurance expire while so many families are struggling,” Lowey (D-Scarsdale) said Monday afternoon at a press conference at her district office in White Plains. “Now is the time for Congress to work together and support an extension of the payroll tax holiday, which traditionally, as long as I’ve been serving, has been bipartisan.

The employee contribution to the payroll tax, currently at 4.2 percent, will jump to 6.2 percent at the end of the year if no deal is reached. While President Obama has pushed for an extension of the tax holiday, meaning keeping the tax at the lower rate, Republicans in both houses of Congress have balked and either opposed the extension or sought concessions from Obama in exchange for extending the cut.

The issue has divided both Democrats and Republicans, with disagreements over the merit of the tax cut as well as how to pay for it. Payroll tax revenues go towards Social Security payments, and Democrats as well as some Republicans favor paying for the holiday with a surtax on incomes over $1 million.

Supporters of the extension, though, have failed to achieve the 60 votes necessary to break a filibuster in the Senate. Opponents of the extension have questioned whether the lower rate has helped spur job creation. Republicans have tried to use the extension to draw concessions from Obama on other issues, including the controversial Keystone XL oil pipeline, and Lowey blasted such efforts as political games.

“I think the Keystone XL project is one that needs real debate. There are people for it, there are people against it,” she said. “We can talk about it, but this isn’t the vehicle to discuss the project and it is wrong to attach this.”

Extending the tax holiday has become a top priority for Obama, who has placed a countdown clock on the White House website counting the days until the tax holiday expires. If the tax were to expire, Lowey said, the average family in her 18th Congressional District would pay nearly $1,700 in additional taxes in 2012.

Lowey was joined Monday by Pat Puleo of New York State United Teachers, Rachel Estroff of the advocacy group Westchester for Change and Joseph Mayhew of Communications Workers of America, who each echoed Lowey’s call for an extension of the tax cut.

“Workers in both the private and public sector will have their paychecks increased with this tax cut, giving them more disposable income,” Mayhew said. “Unlike tax cuts for the wealthy that pad savings and investment accounts while doing little to stimulate the economy, the increases in low and middle-income paychecks from the payroll tax cut are spent immediately and therefore support good job growth.”

Lowey also called for an extension of unemployment insurance and said she planned to introduce legislation that would increase the Alternative Minimum Tax exemption. Since tax laws allow deductions for certain expenses, the AMT was created to make sure everyone pays at least a certain amount.

“Unfortunately, the AMT exemption was not adjusted for inflation and year after year, more middle class families are subject to an unfair tax that requires them to pay more than their fair share,” Lowey said.

A spokesperson for Rep. Nan Hayworth (R-Mount Kisco) said Hayworth is “working toward an extension of the payroll tax reduction and unemployment insurance in a manner that protects the integrity of the Social Security trust fund and minimizes the burden on future generations of taxpayers.”

 

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