GOP members offer payroll-tax solution: Let taxpayers choose

Three House Republicans have put forward a possible solution to the payroll tax cut debate — a bill that would give taxpayers the choice of whether to continue to receive a payroll tax cut.

Under the bill offered by Rep. Jeff Landry (R-La.), taxpayers who opt to continue the 2 percent payroll tax cut next year would, in effect, pay for that cut themselves, by delaying the receipt of their Social Security benefits by one month. Taxpayers could continue to make this arrangement each year, adding another another month’s delay for Social Security each time.

Those who decide not to extend the 2 percent cut would not have to delay the receipt of Social Security benefits.

{mosads}Landry said his bill, the Social Security Preservation through Individual Choice Enhancement (SSPICE) Act, is a helpful addition to a difficult debate about how to find funding for another payroll tax cut. Republicans and Democrats estimate that break as providing another $1,000 or so to working families, but Republicans in particular have warned that collecting less payroll taxes hurts the viability of Social Security, which is funded by these taxes.

“The payroll tax holiday is a difficult issue for Congress because it forces us to choose between allowing Americans to continue to keep more of their hard-earned money or providing for the continued life of Social Security,” Landry said.

“By allowing Americans to decide if they want to extend the payroll tax holiday, the SSPICE Act will allow the American public to more actively share in the decisions that will affect this country for decades to come and will force Congress to stop kicking the can down the road,” he added.

The bill, H.R. 3551, is also sponsored by Reps. Tom McClintock (R-Calif.) and Mick Mulvaney (R-S.C.). On Tuesday morning, McClintock said on the House floor that the Landry bill helps Congress meet three competing objectives: continuing the payroll tax cut, stimulating growth and preventing damage to Social Security.

“For the first time, costs and benefits would be linked in a manner that all consumers can understand and judge for themselves based on their own circumstances,” McClintock said.

“In a difficult year like this, I think most families would rather save the extra tax and work the extra month,” he added. “In better times ahead, they may choose to pay the extra tax to maintain their retirement schedule. But it will be their choice based on their needs, their plans and their best judgment, and not the government’s.”

Under current law, Social Security benefits can be received at age 67 for people born after 1960, but many expect the retirement age to increase over time, due in large part to the deficit.