Republicans push for tax increase
The long and laborious process of reaching an agreement on the debt deal made one key point of the Republican party's platform abundantly clear – there should be no tax increases. The argument maintained that any form of increase would harm job growth and send the economy plunge back into a recession. Instead, Republicans wanted to focus on spending cuts to balance the budget.
While President Barack Obama and the Democrats argued that a mix of revenue from tax increases on wealthy Americans would be a good supplement to the cuts, the debt ceiling was raised without the measures.
Now, it seems that Republicans have started to think twice about the issue of tax increases, but are focusing on eliminating a current tax break extension that largely benefits middle class Americans, according to MSNBC.
Normally, employees have to pay 6.2 percent of income toward a tax for Social Security, a tax that only applies to the first $106,800 of wages. Currently, they are paying a rate of 4.2 percent.
Obama is pushing to extend these particular breaks, but is meeting with Republican opposition.
"There are things we can do right now that will mean more customers for businesses and more jobs across the country. We can cut payroll taxes again, so families have an extra $1,000 to spend," he said in a recent speech.
The extension costs the government about $120 billion a year, which is the sum that Republicans have been eyeing. They argue that it would be better to reduce the income tax rate than keep the payroll tax break active.
"We don't need short-term gestures. We need long-term fundamental changes in our tax structure and our regulatory structure that people who create jobs can rely on," said Sen. Lamar Alexander, R-Tenn, the news source reports.