Payroll Tax

The mood of the NHL labor talks changes faster than the November weather. A week ago, optimism was prevalent, fueled by a sunny high centered over Buffalo, where the NHL Players Association made a proposal it considered a significant step toward ending the dispute. Earlier this week, pessimism grew, under the influence of a low sweeping down from Toronto, where the NHL general managers met and disparaged what the players had offered, while offering a bleak prognosis for the delayed season.

WASHINGTON - House-Senate talks on renewing a payroll tax cut that delivers about $20 a week to the average worker yielded a tentative agreement Tuesday, with lawmakers planning to unveil the pact Wednesday and sending the measure to President Obama as early as this week. Under the outlines of the emerging agreement, a 2 percentage-point cut in the Social Security payroll tax would be extended through the end of the year, with the nearly $100 billion cost added to the deficit.

WASHINGTON - Americans are getting an election-year tax present. Congress voted with rare speed and cooperation Friday to extend a Social Security payroll tax cut for 160 million workers and to renew unemployment benefits for millions more who haven't seen a paycheck in six months. With lawmakers' ratings in the gutter, the legislation sped through both the House and Senate and was on its way to President Obama, who saluted the quick passage. Taxpayers have grown accustomed to the 2 percentage point cut in the payroll tax over the past year - around $80 a month for someone earning $50,000 a year - and the reduction now will be continued.

WASHINGTON - In an about-face, House GOP leaders said Monday they were willing to extend the 2 percentage-point cut in the payroll tax through the end of the year and add the $100 billion cost to the nation's $15 trillion-plus debt. House Speaker John A. Boehner (R., Ohio), Majority Leader Eric Cantor (R., Va.), and GOP Whip Kevin McCarthy of California said the House could vote on the payroll tax measure this week. But they said the fate of unemployment benefits for millions of long-term jobless and efforts to forestall scheduled cuts in fees to doctors who treat Medicare patients would remain in the hands of a House-Senate negotiating panel looking for ways to pay for them.

WASHINGTON - Americans are all but certain to face a broad hike in taxes on Tuesday for the first time in at least two decades, ending a prolonged period of declining taxation that has become a defining characteristic of the American economy. Regardless of whether President Obama and Congress reach an agreement to avoid the fiscal cliff, many Americans will see a higher tax bill because of the expiration of the payroll tax cut, which was enacted in 2011 as a temporary measure to boost economic growth.

Sen. Lloyd Bentsen (D., Texas), chairman of the Senate's powerful tax- writing committee, said yesterday that he is opposed to cutting the Social Security payroll tax - even if the retirement fund's surplus is being used to cover the federal deficit. "I refuse to support it because that kind of a loss of revenue would lead to some extremely serious problems," Bentsen told a group of reporters in his office. "There'd be an enormous increase in the deficit, and you would have foreigners beginning to question whether we could manage our economy.

Despite all the drama leading up to New Year's Day, the tax deal signed Thursday by President Obama did virtually nothing to change the trajectory of the U.S. government's debt-laden finances. The deal raised some taxes, but not enough to prevent the slow starvation of federal programs to help the poor and elderly, according to advocates for such programs. By leaving spending cuts off the table for the most part, the American Taxpayer Relief Act of 2012 set up what is sure to be an ugly fight over raising the nation's debt limit by early March.

WASHINGTON - Grabbing hold of an issue that affects paychecks across the country, U.S. Sen. Bob Casey will begin a push this week to extend a payroll tax cut scheduled to expire at the end of the year. The Pennsylvania Democrat is about to release a fact sheet showing that extending the cut would spare 122 million households from a tax hike next year. He plans to put the numbers front and center at a Thursday hearing on the fiscal cliff, hoping to raise the profile of an issue that has received scant attention.

New Jersey's health-care system needs major changes to control insurance costs and growing numbers of uninsured people, a panel appointed by Gov. Florio said yesterday. Completing a five-month study, the Commission on Health Care Costs listed more than 90 recommendations for eliminating duplicate facilities, encouraging the use of "wellness care" and creating no-frills insurance policies. The most controversial proposal is the panel's call for a payroll tax to support the state's Uncompensated Care Trust Fund, which pays the hospital bills of the uninsured.

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U.S. stocks continued a two-day slide Thursday on weak economic data and concern about the Federal Reserve's resolve to keep juicing the economy. Signaling that the U.S. labor market remains in slow recovery mode, the government said more people applied for unemployment benefits last week. The four-week average, a less volatile measure, rose to the highest in six weeks. The Dow Jones industrial average closed down 46.92 points, or 0.3 percent, at 13,880.62. The S&P 500 index dropped 9.53, or 0.6 percent, to 1,502.42.

It happens every spring: The annual report of the Social Security trustees hits Washington, where it becomes a hammer that tax-boosters and benefit-cutters use to beat each other. Like last year, this April's report will show Social Security has raised enough money, from worker paychecks and bosses' matching fees - plus IOUs for money Congress "borrowed" from Social Security to fund "cotton subsidies, student loans and aircraft carriers," as President Reagan's budget director once put it - so it can pay every promised penny to retirees and other dependents, adjusted for inflation, for about the next 20 years.

Confused about the new tax act? So were we, so we checked in with some local money managers and accountants to sort it out. Practically speaking, all working Americans' taxes will rise in 2013 because the payroll tax holiday of the last two years ended. In 2013, the payroll tax rate returns to its old level and employees will pay 6.2 percent in Social Security taxes rather than the lower 4.2 percent. This tax break saved a worker making $50,000 annually about $1,000 last year, according to Edward Kohlhepp of Kohlhepp Investment Advisors in Doylestown.

Thanks to an ultraconservative congressional faction, many Americans now view the Republican Party as extremist, petty, and irresponsible. You need look no further than the ridiculous, drawn-out drama over the so-called fiscal cliff to see the GOP's inability to negotiate reality. But while its brand is damaged, the GOP has maintained its mystique as the party of fiscal restraint. Shortly before the election, a Washington Post-ABC News poll showed that, by a margin of 51 to 43 percent, Americans believed Mitt Romney would do a better job on the deficit than President Obama.

That foggy uncertainty holding American business back was supposed to clear with last week's Washington compromise, which boosted taxes a few percentage points for rich and poor, stopping bigger tax hikes and recessionary cuts in federal spending. Share prices rose after the deal, as if investors now believe the country will grow faster. But is the future really easier to see? Congress surprised budget-watchers by holding off decisions on big spending cuts until March, notes Beata Caranci , economist for Marlton-based TD Bank . That may have propped up the economy for the time being, but the "lack of clarity" is likely to reduce investment and hiring, especially in health care, the military, road construction and other government-dependent industries, she warned clients in a report.

Despite all the drama leading up to New Year's Day, the tax deal signed Thursday by President Obama did virtually nothing to change the trajectory of the U.S. government's debt-laden finances. The deal raised some taxes, but not enough to prevent the slow starvation of federal programs to help the poor and elderly, according to advocates for such programs. By leaving spending cuts off the table for the most part, the American Taxpayer Relief Act of 2012 set up what is sure to be an ugly fight over raising the nation's debt limit by early March.

WASHINGTON - Even though U.S. lawmakers avoided the fiscal cliff, higher taxes and brinkmanship in Washington are likely to continue damaging the economy well into 2013. In the early hours of the new year, the Senate passed emergency legislation to prevent deep spending cuts and even bigger tax hikes from taking effect. The measure ran into fierce opposition Tuesday from House Republicans, but ultimately passed on a late-night vote. The plan would raise taxes on individual incomes over $400,000 and household incomes over $450,000 and on the portion of estates that exceeds $5 million.

WASHINGTON - Americans are all but certain to face a broad hike in taxes on Tuesday for the first time in at least two decades, ending a prolonged period of declining taxation that has become a defining characteristic of the American economy. Regardless of whether President Obama and Congress reach an agreement to avoid the fiscal cliff, many Americans will see a higher tax bill because of the expiration of the payroll tax cut, which was enacted in 2011 as a temporary measure to boost economic growth.

WASHINGTON - If President Obama and Congress ring in the New Year by tumbling over the fiscal cliff, the people who feel the biggest immediate impact will be those already facing some of the most dire circumstances. Emergency unemployment benefits, which help people who have been out of work for more than 26 weeks and who have exhausted their state support, will be cut off without a deal, immediately ending financial aid for more than 2 million people across the country, including roughly 240,000 in Pennsylvania and New Jersey.