GOP Payroll Tax Cut Bill: More Pee, Please

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The battle over your 2012 taxes continues this week in Congress. Here’s the lay of the land:

  • President Barack Obama and congressional Democrats want to lower the payroll tax for employees to 3.1 percent—cutting most families’ tax bills by $1,500 in 2012. But the Democrats want to pay for that cut with a 1.9 percent surtax on incomes over $1 million—a nonstarter for Republicans. 
  • The GOP plan would cut payroll taxes, too (to 4.2 percent, higher than the Democrats’ preferred rate). But the Republicans’ proposal comes with a grab-bag of other items from conservatives’ Christmas list—it would scale back health care reform, slash Medicare spending, increase federal employee retirement contributions, hike Fannie Mae and Freddie Mac mortgage insurance rates, and sell off wireless spectrum. Although the GOP measure would extend unemployment insurance benefits—something the Democrats left out of their bill—it takes a page from Florida Gov. Rick Scott’s playbook and requires unemployed people who want temporary assistance to undergo drug testing and possess or be working towards a GED. It also trims the number of weeks that UI benefits will potentially be available to unemployed workers from 99 to 59—a reduction of 40 weeks—and reduces the amount of support they provide.

Granted, the Democrats’ proposal doesn’t include UI extension. But it does pay for itself: according to the Congressional Budget Office, the 1.9 percent surtax on incomes over $1 million would cover the cost of the payroll tax cut. The Republican plan, on the other hand, increases the deficit by roughly $25 billion over the rest of the decade, according to the CBO. (Some commentators have argued that Congress shouldn’t pay for the tax cut at all, and instead take advantage of historically low interest rates and just borrow the money.)

The bill that comes out of all this will probably resemble the Republicans’ measure much more than the Democrats’, says former Congresional budget expert Pete Davis. That means that a majority of Republicans in Congress are ready to put their name to a bill that further tightens the noose around the necks of the unemployed. And with its drug testing and GED-related provisions, the measure adds a humiliating twist to the party’s ever-expanding war on the middle class: the idea that if you’ve been out of work for a historically long time, you’re either an addict or undereducated. Merry Christmas!

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We have a considerable $390,000 gap in our online fundraising budget that we have to close by June 30. There is no wiggle room, we've already cut everything we can, and we urgently need more readers to pitch in—especially from this specific blurb you're reading right now.

We'll also be quite transparent and level-headed with you about this.

In "News Never Pays," our fearless CEO, Monika Bauerlein, connects the dots on several concerning media trends that, taken together, expose the fallacy behind the tragic state of journalism right now: That the marketplace will take care of providing the free and independent press citizens in a democracy need, and the Next New Thing to invest millions in will fix the problem. Bottom line: Journalism that serves the people needs the support of the people. That's the Next New Thing.

And it's what MoJo and our community of readers have been doing for 47 years now.

But staying afloat is harder than ever.

In "This Is Not a Crisis. It's The New Normal," we explain, as matter-of-factly as we can, what exactly our finances look like, why this moment is particularly urgent, and how we can best communicate that without screaming OMG PLEASE HELP over and over. We also touch on our history and how our nonprofit model makes Mother Jones different than most of the news out there: Letting us go deep, focus on underreported beats, and bring unique perspectives to the day's news.

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