Over at the TaxProf Blog (a fine source for all things about taxes), we find this:
Under the terms negotiated by Congress, the law also includes a new “recapture” provision, which applies only to those employees who receive more than $18,350 in wages during the two-month period (the Social Security wage base for 2012 is $110,100, and $18,350 represents two months of the full-year amount). This provision imposes an additional income tax on these higher-income employees in an amount equal to 2% of the amount of wages they receive during the two-month period in excess of $18,350 (and not greater than $110,100).
This additional recapture tax is an add-on to income tax liability that the employee would otherwise pay for 2012 and is not subject to reduction by credits or deductions. The recapture tax would be payable in 2013 when the employee files his or her income tax return for the 2012 tax year. With the possibility of a full-year extension of the payroll tax cut being discussed for 2012, the IRS will closely monitor the situation in case future legislation changes the recapture provision.
The IRS will issue additional guidance as needed to implement the provisions of this new two-month extension, including revised employment tax forms and instructions and information for employees who may be subject to the new “recapture” provision. For most employers, the quarterly employment tax return for the quarter ending March 31, 2012, is due April 30, 2012.
A Marxist government never gives to one group without taking it from someone else – they have to, their economic worldview is a zero sum game. The tax shortfall of Obama’s vaunted “$40 pizza night” payroll tax “holiday” is going to be paid back by workers who earn more than a certain threshold in a special “recapture tax”.
Redistribution writ large. That’s all this is. A sham, a shell game, a ruse.
Things like this make me ashamed to have called myself a Republican. The Establishment Republicans led by Perma-Tan Man, John Boehner, saw this as a crass election season ploy by Obama (they had to, it is painfully obvious that it is only symbolic) and instead of fighting it, became fearful that they wouldn’t get to claim credit for “doing something” as much as Obama was. A least there were many of the freshman and least senior House Republicans still standing against it – Florida’s Allen West among them.
Maybe Representative West should run for Speaker.
The Democrats are even worse. The hue and cry, the predictions of economic disaster and the worries about pizza night are all captured on Twitter at #40dollars and even CNN had a site up (now taken down) where you could record what a $40 tax cut means to you. In one video I watched yesterday, the guy stated his support for Obama and the payroll holiday for the entire video and ended with this paraphrased quote:
“…people should be able to keep more of their own money.”
At their root every single video was pro-lower taxes even though the majority saw it as the government “giving” them something. I just wanted to scream at the computer screen, “It is YOUR money in the first place, dumbass! It is a payroll tax! That means that it is coming from your paycheck!” This is the same logic that creates a celebration in people when they file their income taxes and get a “refund” from the government. It is just lost on them that they are only getting their own money back that they overpaid and effectively loaned the government interest free for a year. Try underpaying for a year and see if the IRS lets you off penalty and interest free…
In my estimation this dust-up over the payroll tax “holiday” was a huge missed opportunity for something that “progressives” love – a teachable moment.
When you have the President, Harry Reid, Nancy Pelosi, the Congressional “progressives” and major left-wing groups all in full Armageddon mode because a $40 a week tax hike was going to virtually kill every man, woman and child in America, one question should have been asked:
If $40 means so much to the survivability and viability of the American people and the economy, why don’t we try true tax cuts of $100…or $200…or $400 and not a gimmicky “holiday”?
This one question would have simultaneously:
- Exposed the Democrats redistributive plan,
- Exposed the fact that they never intended for the government to cut taxes,
- Forced an end to the Democrat’s kabuki dance about tax cuts – exposing that they don’t really support tax cuts, just shifting the tax burden from one economic class that favors them to another that doesn’t,
- Forced all of them to explain that if $40 is good for the economy, why $400 isn’t better,
- Demonstrated that the Republicans were right to oppose this “holiday” and the charlatans behind it.
Another lost opportunity in a myriad of lost opportunities to break free of the “progressive” riptide that is carrying us all out to sea.
h/t to Instapundit.