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Workers need payroll-tax cut

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opinion Detroit Lakes,Minnesota 56501
Detroit Lakes Online
Workers need payroll-tax cut
Detroit Lakes Minnesota 511 Washington Avenue 56501

With property taxes going up, medical insurance not getting any cheaper and incomes largely stagnant, middle class workers in Minnesota are staggering under a heavy load.


The straw that may break their back is the stalemate in Congress over continuing the payroll tax cut for another year.

How important is it to workers in Becker County? The median family income here is about $44,600, and if the existing payroll-tax cut is allowed to expire at the end of the month, it will cost that family about $900, or $75 a month.

Democrats want to extend the payroll-tax cut and even expand it: President Obama has proposed a deeper cut to the payroll tax that would give that median income Becker County family about $1,380, or $115 a month, next year.

To prevent harm to the Social Security trust fund, he would pay for it with a wealth surcharge on millionaires, making it pretty much DOA with Congressional Republicans.

According to the Wall Street Journal, The Republican leadership wants to find a way to extend the payroll-tax cut (and extend unemployment insurance) but is meeting with resistance from their rank-and file -- which unexpectedly rejected a House bill that would have made up the costs by freezing federal worker pay and imposing personnel cuts.

We're not sure how it's all going to shake out, but here's how the issue affects residents of area counties:

In Otter Tail County, the median family income is about $42,000. If the payroll-tax cut is not extended next year, that family will pay another $840. If Obama's deeper cut is approved, that family will save about $1,300.

The median family income in Hubbard County is about $43,700. That family will pay $874 more next year if it is not extended. It will save $1,355 if Obama's plan is approved.

The median family income in Mahnomen County is about $33,800. That family will pay an additional $677 in payroll taxes next year. It will save $1,049 under Obama's plan.

The economy saw some good news Friday with the national unemployment rate dropping to 8.6 percent. But some of that is due to frustrated people giving up on finding a job and dropping out of the workforce.

An extension of the payroll-tax cut would juice the wheels of commerce a bit and help keep the economic recovery on track.

"Families all over Minnesota are still struggling to make ends meet and this important tax cut has helped them make mortgage payments, pay medical bills, and put food on the table," U.S. Sen. Al Franken said in a news release. "This report shows how important it is that we extend this tax cut and put money back in the pockets of working Minnesotans so they can spend it at local businesses, create jobs, and grow our economy."

If the payroll-tax cut is not extended by the end of 2011, the average Minnesota family will pay an additional $1,112 in payroll taxes next year.

The payroll-tax cut passed by Congress last year saved the average Minnesota family $1,112 in 2011, and the increased cut proposed by Obama would save the average Minnesota family $1,724 in 2012 -- an increase of 55 percent.

We know Congress is deeply divided, but it needs to find a way to get this done. We can't help believe that if the payroll-tax cut was a priority for the rich, Congress would be falling all over itself to solve the problem.

How about throwing a bone to the average worker for a change?