Just Another Short Term Patch

Last week we told you about the super committee’s failure to reach an agreement on a deficit reduction deal.  We also discussed the ongoing negotiations to reach a compromise on the future of the payroll tax cut that was set to expire at the end of the year.  Even though there seemed to be unanimous agreement that an extension of the cut for another year was the best course of action, Democrats and Republicans were still unable to reach an agreement on such an extension.  Instead they settled on a 2 month extension of the cut, in effect simply punting the issue into next year where we will go through this process all over again. 

I won’t go into the details of the back and forth between the two parties or the drama that unfolded this past week.  The end result is that nothing will change for taxpayers for the next two months.  The payroll tax that was set to rise back to 6.2% from 4.2% will instead stay at the lower rate. 

I’m sure we will be back in February with another update on this issue from our dysfunctional government.

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