Democrats in the U.S. Senate are proposing to use a 3.25 percent tax on income over $1 million to pay for extending and expanding a payroll tax cut, said Senate Majority Leader Harry Reid.
If Congress doesn’t act, a 2 percentage-point cut in the payroll tax for workers will expire Dec. 31.
The Democrats’ proposal would cut the 6.2 percent Social Security portion of the payroll tax in half for workers and would also cut the employer portion in half for most companies.
© Copyright 2012 Bloomberg News. All rights reserved.