McCaskill Proposes Tax Cut for Those Making Less Than One Million - 2 Percent Surtax if Making Over 1 Million

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Missouri News Horizon
JEFFERSON CITY
, Mo. – Missouri Sen. Claire McCaskill has thrust herself into the middle of the ongoing national debate over extending the current federal payroll tax cut.

On Tuesday, McCaskill and Republican Sen. Susan Collins of Maine introduced “The Bipartisan Jobs Creation Act – an omnibus bill that would immediately impact American workers who are about to see their payroll tax increase by nearly half its current rate.

Under a current temporary employee payroll tax cut, Americans pay 4.2 percent of their paychecks to the government. If a resolution is not passed to continue this rate through 2012, that rate is set to return to 6.2 percent on Jan. 1.

That same bill also maintains a lower 4.2 percent employer payroll tax on small businesses making less than $10 million annual.

Collins and McCaskill are marketing their bill as a common sense solution to the debate over payroll tax cuts and job creation.

“Here is a prime example of what can be accomplished when Congress stops playing politics, and starts working together—a viable plan to put more Americans back to work, rebuild our crumbling infrastructure, and cut taxes for working Americans,” McCaskill said of her bill.

Although the bill’s most direct impact may be felt in the form of payroll tax rate, it also contains a number of other provisions, including tax credits for high-tech small businesses, new funds for transportation infrastructure and job training programs.

To pay for these new programs and tax credits, McCaskill and Collins have proposed a 2-percent surtax on those making more than $1 million annually – with a loophole provided for small businesses, which often pay their taxes through the owner’s personal income tax return.

The senators plan to further offset the cost of their bill by eliminating a tax breaks for the nation’s five biggest oil companies – and issue long championed by McCaskill.