The Obama White House, in its own version of the New Year\u2019s Eve countdown in Times Square, has added a banner to its website \u201d\u201c a clock ticking down the seconds to when taxes on the middle class will rise \u201cif Congress doesn\u2019t act.\u201d\u009d<\/p>\n
That tax hit is the 2 percent payroll tax cut now set to expire at midnight, Dec. 31. If Congress fails to at least extend that tax cut, the Social Security tax rate for employees jumps back to 6.2 percent, up from 4.2 percent. If that happens, the average American taxpayer stands to lose about $1,000 in 2012.<\/p>\n
Leaders on both sides of the political aisle in Congress offer assurances that by year\u2019s end the tax break will be extended. As lawmakers head into an election year, the stakes are simply too high to kick that can down the road. But GOP leaders, especially, are running up against strong opposition from the rank-and-file on anything that looks like caving on pledges to reduce deficits, dramatically cut spending, and reject all tax increases (which are an issue in this case because Democrats propose to pay for extending the payroll tax by a tax hike on millionaires.<\/p>\n