Title: Extends Payroll Tax Cut and Establishes Tax on Income Over $1 Million
Vote Smart's Synopsis:
Vote on a motion to proceed with a bill that reduces the payroll tax rate from 4.2 percent to 3.1 percent for the 2012 calendar year, and establishes a 3.25 percent tax on income over $1 million.
Reduces the payroll tax rate from 4.2 percent to 3.1 percent for both employers and employees for the 2012 calendar year (Sec. 101).
Specifies that the payroll tax rate of 3.1 percent for employers shall only apply to the first $5 million in compensation paid by an employer (Sec. 101).
Establishes a 3.25 percent tax on modified adjusted gross income in excess of $1 million for non-corporate taxpayers, or in excess of $500,000 for married individuals filing separate tax returns, for all taxable years beginning after December 31, 2012 (Sec. 201).
Reduces the payroll tax rate on earnings from self-employment for taxable years beginning after 2012 as follows (Sec. 101):
From 10.4 percent to 6.2 percent for the first $5 million in net earnings; and
From 10.4 percent to 9.3 percent on net earnings in excess of $5 million.
Appropriates to the Social Security trust funds amounts equal to the loss in revenue resulting from the payroll tax rate reductions (Sec. 101).
NOTE: THIS LEGISLATION NEEDED A THREE-FIFTHS MAJORITY VOTE TO PASS.
NOTE: THIS IS A VOTE ON A MOTION TO PROCEED, WHICH SENDS THE LEGISLATION TO THE FLOOR OF THE SENATE FOR DEBATE AND AMENDMENT. A MOTION TO PROCEED REQUIRES A MAJORITY OF THE SENATE FOR APPROVAL.