When the announcement was made of the deal between Senate leader Harry Reid and House House Speaker John Boehner to extend the payroll tax cut for two months, Frank Kuchar, Republican candidate for the Sixth Congressional District of Texas issued the following statement on the compromise bill.
“As a Certified Payroll Professional (CPP), and having run payroll in various companies for several decades, I have an inside perspective on the impact of this extension.
“The extension is a bad deal from several angles. It will not give the average family an extra ‘$40 per week’ as President Obama proclaimed, but on average, the extra cash in their paycheck will only amount to $15 to $17 per week.
“In addition, this agreement will only add to our deficit since there are no off-setting spending cuts. It will do more harm to the economy than good.
“Even as good as this small amount of money feels in the pocket of the American, working citizen, its detrimental effect as a non-contribution to the Social Security Insurance fund compounds the peril to the fund’s existence. The fund is a supplement to the retirement income of an ever increasing number of retirees and decreasing contribution amounts can only hasten the demise of this contractually guaranteed program for the elderly.
“It will pose difficulties for payroll professionals in keeping their tax liabilities balanced and in completing their quarterly tax returns. On top of that, software vendors will be hard pressed to modify their payroll systems to accommodate this brief change in the tax rates.
“Furthermore, none of these erratic proposals businesses are being forced to comply with would be free. There are huge costs associated with IRS rules that change every 60 days.
“These costs would be passed on to every consumer when they purchase goods and services. These consumer costs will remove any benefit the worker receives from the tax deal and would be an additional cost to those who are unemployed and not receiving any benefit from this bad deal.
“We need to permanently eliminate our current income and payroll tax system and replace it with H.R. 25, ‘The Fair Tax Act.’”