Payroll Tax

As next month's deadline nears for the Obama administration to make a decision on the Keystone XL pipeline, interest groups on both sides have launched aggressive campaigns aimed at swaying public opinion. The American Petroleum Institute, the nation's largest oil lobby, has launched a television advertising blitz in the Midwest and in the District urging voters to tell the White House they support the plan to transport crude oil from Canada to the Gulf Coast. Environmentalists are...

In any other time and place, $642 billion would qualify as a lot of money. But in the Washington of 2013, it has been reduced to pocket change. When the Congressional Budget Office announced that it has cut its projected 2013 federal deficit to $642 billion — compared with 2012's deficit of $1.1 trillion and an earlier 2013 estimate of $845 billion — there was an almost-palpable sigh of relief. The budget problem is taking care of itself. Congress and the White House can relax.

ANOTHER DECEMBER, another expiring tax cut, an economy still struggling to recover. If the reduction in Social Security payroll taxes is extended or expanded, as President Obama wants, this will mark the fifth straight year of efforts to boost the faltering economy through stimulus, or, in the case of renewing the existing tax cut, at least the avoidance of a contractional jolt. Is that warranted? Yes, under the extraordinary economic circumstances in which the country finds itself.

The budget deals of the past two years and a recovering economy are rapidly mopping up the tide of red ink that swept over Washington after the 2007 recession. After four years of budget deficits in excess of $1 trillion, the nonpartisan Congressional Budget Office forecast Tuesday that this year's deficit will plummet to $642 billion, or 4 percent of the nation's total economic output. That's $200 billion lower than the CBO forecast in February. Analysts attributed the sunnier outlook to...

Think the congressional debate over extending the payroll tax holiday is simply a matter of how to pay for the benefit? Think again. Thursday night's Senate votes on extending the one-year holiday — a priority for the Obama administration — revealed deep differences between the parties not just over how to pay for the payroll tax break, but also on whether to continue it at all. In particular, there is a split among Republicans —...

Former White House economic adviser Larry Summers warned Thursday that the nation is at risk of sinking into a "great stagnation" — a period of high unemployment and sluggish growth — and urged policymakers to extend a temporary payroll tax cut. Given the weakness of the economy, Summers argued that it is far more important to spur economic growth right now than to restrain record budget deficits — so long as policymakers adopt a plan to...

Now that Congress has reached agreement on what must be one of the worst pieces of legislation in years — the temporary payroll tax holiday extension — let's survey the damage. To begin with, what even minimally rational government enacts payroll tax relief for just two months? As a matter of practicality alone, it makes no sense. The National Payroll Reporting Consortium, representing those who process paychecks, said of the two-month extension passed by the Senate just days before the new year: "There is...

Amid some dissent, House and Senate leaders prepared for final votes Friday for an economic package worth more than $150 billion that would extend a payroll tax holiday and unemployment benefits for the rest of the year. While Senate Republicans protested, the remaining members of a House-Senate committee tasked with forging a compromise pronounced themselves satisfied with the deal, signing the 270-page compromise Thursday afternoon in a bipartisan ceremony that stood in sharp contrast to the...

The failure of the "supercommittee" raises the chance that working Americans will see their paychecks cut in January, and many economists say that could weaken an already vulnerable U.S. economy. Last year's payroll tax cut saved the average U.S. household more than $900, according to the Tax Policy Center . But because the supercommittee could not agree on a budget plan, the tax cut, as well as unemployment benefits, could expire at the end of the year. "This is an immediate...

President Obama warned Congress on Wednesday not to tie approval of a payroll tax cut to other sensitive measures such as the Keystone Pipeline project, which his administration delayed last month. Speaking at a brief news conference after a meeting with Canadian Prime Minister Stephen Harper, Obama said he would block any attempt by Congress to attach the payroll tax cut provision to another legislative measure. "Any effort to try to tie Keystone to the payroll tax cut, I will reject," Obama said.

For the third year in a row, the nation's economic recovery seems to be petering out just as temperatures start to go up. Hiring has dropped off. Shoppers are putting away their wallets. Government spending cuts are looming. That has fueled predictions of an abrupt slowdown over the next few months. Economists are forecasting tepid growth of just over 1 percent during the second quarter of the year. The economy was expanding at roughly twice that pace over the winter. In fact, although the drivers have been different, the slowdowns have become...

The latest monthly employment data from the Labor Department has disappointed observers of the national economy. The Washington Post's Neil Irwin summarizes the report: Too few jobs were added to keep up with the growing American workforce (that number is more like 125,000). The headline read that the unemployment rate fell to 7.6 percent from 7.7 percent, but it was almost entirely for bad reasons. A whopping 496,000 people dropped out of the labor force, and 206,000 fewer people reported having a job, meaning that the...

This week, financial leaders from around the world meet, while in the United States, a slew of housing indicators are released. Monday Federal Reserve Chairman Ben S. Bernanke heads to London to give a speech on lessons learned from the financial crisis. He appears with Bank of England governor Mervyn King and the International Monetary Fund's chief economist, Olivier Blanchard. Tuesday Durable-goods orders for February come out at 8:30 a.m. Analysts expect a big swing from January, when...

The excellent March 7 front-page article " Job creators — or terminators? ," on progress in robotic development, raised the question of the long-term effects of robots on employment. More consideration should be given to Robert Shapiro's suggestion ["The new normal in job creation," op-ed, Feb. 15] to replace the employer-paid portion of the payroll tax with the use of a value added tax (VAT). In fact, I would expand it to include employer-paid health care and retirement costs as well.

The world's largest retailer has been the source of some unwelcome news about the economy of late. Internal e-mails from Wal-Mart executives were leaked earlier this month, and they present a dire picture of what is happening to American consumers, particularly the low- to middle-income consumers who spend a lot of their money at Wal-Mart. "Where are all the customers? And where's their money?" asked Cameron Geiger, a Wal-Mart senior vice president, in e-mails obtained by Bloomberg News that also described February sales to that point...

Some of the nation's largest retailers posted solid gains in January even though shoppers were hitting the malls with smaller paychecks. The results reported Thursday offer the first glimpse into how the expiration of the payroll tax cut is affecting household budgets. A worker making $50,000 a year faces a decrease of $1,000 in take-home pay over the course of the year, and economists predicted spending would fall off. But many companies found that shoppers were more resilient than expected.

Before the House objected to it [ "House GOP balks at payroll tax deal," front page, Dec, 19], the Obama administration hailed the proposed extension of the payroll tax cut for "preventing a tax increase on 160 million hardworking Americans," yet such rhetoric obscures the purpose of the extension and undermines the notion of shared responsibility that the president has chosen to make a centerpiece of his reelection campaign. Payroll taxes, when not raided by Congress, directly fund the Social Security and Medicare...

In recent days, much has been made about the politically difficult position that the House put itself in over the payroll tax holiday [ "The payroll tax standoff," editorial, Dec. 22; Charles Krauthammer and Eugene Robinson , op-ed, Dec. 23]. There has been much less discussion of the public-policy question that got us there. As a GOP freshman in the House, here is how I see it: We were pushing for a public policy (a one-year extension of the payroll tax cut) that was universally acknowledged to be more...

Like a lot of people, I got a little surprise when I received my paycheck recently. Where did the money go? All those abstract debates about fiscal cliffs and debt ceilings suddenly did not seem so abstract any more. The expiration of a payroll tax holiday served as a wake-up call. We can debate endlessly whether to increase income taxes on this group or that, but there are plenty of other fees and levies that can affect our bottom line. Our policymakers now have their hands on the levers and dials of tax policy, and it is...

It's not nice to tell people "I told you so. " But if anybody has the right to say that, it's Nina E. Olson, the national taxpayer advocate . Olson recently submitted her annual report to Congress and top on her list of things that need to be fixed is the complexity of the tax code, which she called the most serious problem facing taxpayers. Let's just look at the most recent evidence of complexity run amok. The Internal Revenue Service had to delay the tax-filing season so it could update forms and its...