Republicans Promoting Tax Increase On Middle Class?

Democrats joned together Tuesday to criticize Republican leaders for wanting to end a temporary tax cut for employees that could expire at the end of this year.

The tax break at issue is a 2% drop in the payroll tax paid this year by working Americans. The payroll tax funds Social Security. The reduction in the payroll tax rate from 6.2% to 4.2% was agreed to by congressional leaders and the White House last December as part of a short-term spending package. Employers, who pay a matching 6.2% rate, were left out of the deal.

Ironically, Republicans, who generally oppose any and all tax increases (and who generally consider the ending of a tax cut to be the same as a tax hike), have been warm to letting the cut expire on Janurary 1, 2012.

“We don’t need short-term gestures,” said Sen. Lamar Alexander, (R-Tenn.) recently. “We need long-term fundamental changes in our tax structure and our regulatory structure that people who create jobs can rely on.”

In addition to Alexander, House leaders Eric Cantor (R-Va.), Jeb Hensarling (R-Texas) and Dave Camp (R-Mich.) have signaled opposition to keeping the tax break in place on the grounds that it is depleting Social Security funds. Camp and Hensarling will both serve on the new “super-committee” on deficit reduction that will convene after Labor Day.

GOP presidential candidate Mitt Romney also recently weighed in on the matter, saying that he’d prefer to steer the tax break toward employers.

Though the administration estimates that the tax cut will end up costing the federal government around $120 billion in lost revenue this year, the White House has promoted extending it for another year to help out middle class families and individuals who are struggling financially as the nation’s economy continues to show no real signs of blossoming. Another year of paying the lower rate, Obama said, would mean that “families have an extra $1,000 to spend.”

Today, Democrats around the nation held a series of conference calls to hit the GOP over its stance on letting the cut sunset. New Hampshire state Rep. David Watters (D) called Republicans hypocritical due to their continued support of keeping alive the Bush tax cuts for even the wealthiest taxpayers.

“Many of the same Republicans who fought hammer and tongs to keep the George W. Bush income tax from expiring on schedule are now saying different temporary tax cuts should end as planned,” Watters told reporters. “By their own definition, that amounts to a tax increase on the middle class.”

“If you’re wealthier than 98 percent of the country, fly a corporate jet, represent a special-interest hedge-fund, Republicans will fight tooth and nail to make sure you are exempt from paying your fair share,” he added.

The question now is how GOP presidential candidates will respond to their party’s leaders. The next presidential forum is scheduled to take place in South Carolina on August 25. Candidates will debate again in Tampa on September 12.