Washington, D.C. – Nevada Senator Harry Reid made the following remarks today on the Senate floor regarding the payroll tax legislation. Below are his remarks as prepared:
I trust you had a safe and happy holiday. And I hope everyone is well rested, because we have a difficult work period ahead of us.
We have much to do over the next few weeks, and Hanukah and the Christmas holiday are looming ahead of us.
This week we need to finish work on the Department of Defense authorization and more.
This month we must also handle a number of nominations and extend unemployment insurance for Americans still struggling to find work during these difficult times. And we have more appropriations work to do. The continuing resolution to fund the government expires on December 16.
And we must not neglect the responsibility to continue our work to put Americans back to work. So we will take up additional pieces of President Obama’s American Jobs Act.
This week we will introduce legislation that would give the economy a boost by putting money back in the pockets of middle-class workers and small businesses by extending and expanding a popular payroll tax cut.
More than 120 million families took home an extra $120 billion this year thanks to payroll tax cuts Democrats championed.
The average family held onto $935 more of their heard-earned dollars this year. We need to assure those families that they can rely on that tax cut next year as well.
But this legislation does more than just protect the tax cuts Americans already count on. It deepens and expands that tax relief as well.
Next year, 120 million families will keep an average $1,500 because of this legislation. That means they’ll have more money to spend on necessities like gas and food, and will help spur economic growth in their communities.
Business will also benefit from this tax cut. Ninety-eight percent of American business will see their payroll taxes cut in half on the first $5 million in wages they pay out. And firms that add workers will benefit from a full payroll tax holiday on their increase in wages.
In Nevada, 50,000 businesses will benefit from this tax cut. And many businesses will save tens or even hundreds of thousands of dollars.
So this legislation will help families and business while spurring hiring and giving the economy a boost. And it will be fully paid for with a small, 3.25 percent surtax on income over $1 million.
A person who makes $1 million a year won’t pay an extra penny. Someone who makes $1.1 million – an extra $100,000 – will pay only $3,250 more.
At a time when many working families are still struggling, we can’t afford not to extend and expand this important payroll tax cut.
So I was disappointed to hear that some of my Republican colleagues, including the Junior Senator from Arizona, have already come out in opposition to this tax cut.
These are the same Republicans who loudly claim to care about keeping taxes low. But too often it seems they only care about keeping taxes low for the richest of the rich.
The same Republicans who today oppose a payroll tax cut for hundreds of millions of businesses and families last week jettisoned the hopes of a large-scale deficit reduction deal from the Supercommittee because they insisted on massive, permanent tax giveaways for the very rich.
Cutting taxes for middle-class families and business should be an area where Republicans and Democrats can find common ground, as we have in the past.
This Republican opposition smacks of partisanship. Because this tax cut has President Obama’s fingerprints, Republicans won’t support it even though they know it is good policy for American families and businesses.
Let’s examine the effects of their purely political opposition to a common-sense tax cut. If Republicans block passage of this legislation, they will be taking money out of the pockets of American families.
For a family making $50,000 a year, our proposal would not only preserve an existing $935 tax break, it would put an additional $565 a year in the family coffers. If Republicans get their way, that family will actually see its taxes increase by nearly $1,000.
If Republicans block this legislation, 120 million American families and 98 percent of American businesses will not get a tax cut next year. Instead, 120 million families and millions of businesses will be socked with a tax increase.
Those numbers are shocking. But the potential impact on the larger economy is downright scary.
Economist Mark Zandi of Moody’s said the economy will likely plunge back into a full-blown recession – erasing the economic progress we’ve made – if we do not extend this tax cut.
It is clear neither our fragile middle class nor our fragile economic recovery can afford the kind of setback a failure to extend and expand these tax cuts would bring.
Republicans say we cannot afford to raise taxes. If they choose to oppose this payroll tax cut, we’ll know what they meant to say was, “We cannot afford to raise taxes on the rich – but we are happy to raise taxes on the middle class.”