McCaskill and Blunt argue over extending federal tax cut.

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Missouri News Horizon

JEFFERSON CITY, Mo. – Days after Missouri Sen. Claire McCaskill thrust herself in the middle of the current debate over extending the federal payroll tax cut by co-sponsoring her own bipartisan solution, her Republican counterpart came out against the plan saying the current tax rate was never meant to be permanent.

The Senate is currently debating a proposal from Democrat McCaskill and Republican Maine Sen. Susan Collins that would maintain the current 4.2 percent employee payroll tax rate through 2012. The rate was lowered from 6.2 percent at the beginning of the year and is set to return to that level if Congress does not take action by the end of year.

Although Congress is ultimately expected to pass some form of the payroll tax cut extension before the end of the year, McCaskill had harsh criticism for those who oppose her specific proposal because it comes with a 2 percent surtax on millionaires and eliminates certain tax credits for the nation’s five biggest oil companies.

These provisions are meant to help provide stable funding to social security, which the payroll tax traditionally finances.

McCaskill said she expects her proposal to pass because it forces conservatives to choose between raising taxes on the middle class or the wealthy.

“Why is it ok to raise taxes on working people and the middle class and it’s not ok to raise taxes on multimillionaires?” she said. “That’s really what (opponents to the bill) are saying.”

McCakill took sharp aim at members of Congress like her GOP counterpart, Roy Blunt, who has signed a pledge from powerful anti-tax lobbyist Grover Norquist that they would not raise taxes while in office. She accused the lawmakers who signed the pledge of only following it when it applies to the wealthy.

But Blunt had a different spin on the issue, as he explained his opposition to reporters on Thursday.

He argued that allowing the tax cut to expire would not constitute a tax hike, arguing that as a “tax holiday” it was never meant to last forever.

Either this was a social security contribution holiday or it wasn’t,” Blunt said. “And if it was a holiday, then it’s by no stretch of the imagination a permanent tax policy.”

In addition to maintaining the current payroll tax rate for employees, McCaskill’s bill would also maintain the same 4.2 percent rate to employers up to $10 million. The bill also contains a number of other provisions, including tax credits for high-tech small businesses, new funds for transportation infrastructure and job training programs.