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.

Highlights:

• 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 December 31, 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).

Full Bill Text

Full Bill Text