Posted by Katie Vlietstra - Senate and House conference committee members reached a deal on Thursday morning to approve a 10-month extension of the payroll tax deduction, extend unemployment benefits, and halt a significant cut in payments for physicians that treat Medicare patients. The payroll tax deduction extension equates to an additional $40 per pay period for nearly 170 million American workers. NASE advocates for the extension stressing the importance of the extension as it would allow for the self-employed to invest in additional supplies, phone lines and online advertising that continue to struggle in this difficult economy.
According to the Joint Committee on Taxation (JCT), approximately 170 million workers and self-employed individuals stand to benefit from the payroll tax reduction in 2012, with a typical middle-class worker earning $50,000 receiving approximately $833 more in take-home pay this year as a result of this provision than he or she would if this benefit were permitted to expire on February 29, 2012. JCT estimates that this extension of the 2-percentage point payroll tax reduction through December 31, 2012 would provide taxpayers $93.219 billion in tax relief over the 2012-2022 period.
NASE applauds the bi-partisan efforts by Senate and House leaders to reach an agreement well in advance of the February 29, 2012 deadline. The extension of the payroll tax deduction is good public policy and provides immediate relief to the American taxpayer. Our hope is that congressional leaders will build off of this hard work and quickly pivot to other pressing policy issues.
Final passage of the conference report by the Senate and the House is expect Friday or even in a rare Saturday session with the President signature to follow.