Tax Holiday

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 insufficient lead time...

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...

ADEMONSTRABLY BAD idea in pursuit of a possibly worthy goal is still a bad idea. In this instance, the demonstrably bad idea is giving corporations a federal tax break — make that another tax break — on "repatriated profits," money they earn overseas and bring home. The goal is an infrastructure bank to help build roads and other projects. Such an entity could help rationalize the hodgepodge of politically dictated projects and leverage private capital. But arithmetic's basic laws must prevail: You can't pay for an...

Americans faced a broad increase in taxes Tuesday for the first time in at least two decades, ending a prolonged period of declining taxation that has become a defining characteristic of the U.S. economy. Despite the tentative agreement reached late Monday to avoid much of the fiscal cliff, many Americans will see a higher tax bill because of the expiration of the payroll tax cut , which was enacted in 2011 as a temporary measure to boost economic growth. The tax holiday was preceded by a...

A simple calculation drove Nancy Bakatsias and her three children to the school supplies section of Target in Sterling yesterday morning: When it's hard to sell houses, better save on school supplies. With Lukas, 2, riding shotgun, Madison, 5, sitting in the cart and Paige, 7, walking alongside, the Loudoun County real estate agent took advantage of Virginia's third annual sales tax holiday to buy composition books, crayons and markers for the coming year. "The economy is really hard right now," said Bakatsias, 40....

With Congress voting last week to extend the payroll tax holiday, 160 million workers will be spared an immediate tax hike. But the move leaves them facing an even bigger hit in January, when the holiday ends and the payroll tax joins a long list of levies already set to sharply and abruptly go up. On Dec. 31, the George W. Bush-era tax cuts are scheduled to expire, raising rates on investment income, estates and gifts, and earnings at all levels....

As Washington politicians grapple with how to lower the federal deficit, a coalition of powerful corporations has a seemingly tantalizing offer: Give us a big tax break, and we'll give you $50 billion or more in fresh revenue. More than two dozen major companies and business groups — including the U.S. Chamber of Commerce and technology giants Apple, Google and Microsoft — have joined together under the banner of the "Win America Campaign" to push for a one-time tax...

House Republican leaders said Monday that they will support extending the federal payroll tax holiday through the end of the year without demanding spending cuts to pay for it, a concession aimed at averting another po­litically damaging showdown in Washington. The House leadership could offer a pared-down measure to extend the tax cuts later this week. But the top three GOP leaders backed off previous demands that the tax break's extension be accompanied by spending reductions to...

Americans faced a broad increase in taxes Tuesday for the first time in at least two decades, ending a prolonged period of declining taxation that has become a defining characteristic of the U.S. economy. Despite the tentative agreement reached late Monday to avoid much of the fiscal cliff, many Americans will see a higher tax bill because of the expiration of the payroll tax cut , which was enacted in 2011 as a temporary measure to boost economic growth. The tax holiday was...

Lawmakers will return to Washington on Tuesday to begin an election-year work session with low expectations for any significant legislative action, while also receiving low approval ratings for themselves. A new Washington Post-ABC News poll shows a new high — 84 percent of Americans — disapproving of the job Congress is doing, with almost two-thirds saying they "disapprove strongly. " Just 13 percent of Americans approve of how things are going after the 112th...

President Obama sharply curtailed his ambitions for legislation to avert the year-end "fiscal cliff" on Friday, urging Congress to adopt a stopgap measure to keep benefits flowing to unemployed workers and prevent taxes from rising on income under $250,000 a year. The plan should also "lay the groundwork" for action next year to spur economic growth and rein in the national debt, Obama said at a White House news conference. But with taxes set to rise for virtually every American in just 10 days,...

President Obama and House Speaker John A. Boehner moved close to agreement Monday on a plan to avert the year-end " fiscal cliff ," but they had yet to clear several critical hurdles, including winning the support of wary House Republicans. Obama and Boehner (R-Ohio) huddled at the White House for 45 minutes Monday morning for their third conversation in the past five days. Later, Boehner met for an hour at the Capitol with his leadership team in advance of a...

This is what the other side of the "fiscal cliff" looks like. If President Obama and Congress fail to reach a deal to avoid hundreds of billions of dollars of tax hikes and federal spending cuts, many Americans will feel the pain with less money in their paychecks in the first week of the New Year. On Friday, Jan. 4, middle-class Americans who get paid that day would see take-home pay decline by an average of about $25, according to calculations based on data from the nonpartisan Tax...

An entirely new political narrative is taking shape before our eyes, yet many in Washington are still stuck in the old one. President Obama's victory blew up the framework created by the 2010 elections, which forced him to play defense. Now, he finally has room to move. That's the only way to understand the ongoing budget talks. This has several implications. First, why was anyone surprised that Obama's initial offer to the Republicans was a compendium of what he'd actually prefer?

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...

AT THE RISK of spoiling it, we'd like to take note of a quietly growing bipartisan consensus in support of doing something that might actually help the long-term financial condition of the United States government — or, to be more precise, a growing consensus against doing something that might harm U.S. finances. We speak of the broad opposition among Republicans and Democrats to another one-year extension of the Social Security payroll tax holiday , which workers have enjoyed for the past two years.

Nine days after President Obama's $447 billion jobs package was blocked in the U.S. Senate, one of the plan's key components — which would provide $35 billion to states and local governments to hire teachers and first responders — suffered the same fate late Thursday. The vote represented the legislative part of a strategy by Democrats to convince voters that they are pushing popular job-creation bills that are being thwarted by Republican opposition. All 47 Republicans voted against allowing the bill to...

Not long before the Senate voted to block his $447 billion jobs package on Tuesday, President Obama described the impending roll call as a "moment of truth. " He meant for Republicans, whom he blames for quashing his attempts to improve the economy and who voted as a bloc against the plan . But he could also have been talking about those moderate Democrats who face reelection fights next year, and who will be deciding in the coming months how closely to ally themselves to a president who...

Nearly 90 percent of Americans would face higher taxes next year if Congress lets the nation hurtle over the " fiscal cliff ," the year-end precipice of tax hikes and spending cuts that threatens to throw the nation back into recession. A study published Monday by the nonpartisan Tax Policy Center finds that taxes would go up by a collective $536 billion next year, or about $3,500 per household, reducing after-tax income by more than 6 percent — an "unprecedented tax increase.

On Sale Back-to-school shopping season Jump-start back-to-school shopping. Aug. 3-5 marks Virginia's sales tax holiday . During these three days, purchases of school supplies selling for $20 or less per item, and clothing and footwear selling for $100 or less each will be exempt from the state's 5 percent sales tax. For a list of what qualifies, go to www.tax.virginia.gov . Today is your last chance to snag a sofa or...