Where Nevada’s representatives stand on the payroll tax cut

By Karoun Demirjian

Published Thursday, Dec. 8, 2011 | 6:31 p.m.

Updated Friday, Dec. 9, 2011 | 11:20 a.m.

The Senate shot down another round of proposals Thursday to extend and/or expand a reduction in payroll taxes that expires at the end of the year. Meanwhile, leaders in the House dug in to draft their own payroll tax proposal, one President Barack Obama has threatened to veto.

As the parties settle in for a long fight, Nevada lawmakers have staked out their positions.

If Congress doesn’t come up with a compromise by the end of the year, anyone who gets a paycheck can expect to feel the impact as payroll taxes rise from a current 4.2 percent to 6.2 percent of the first $106,800 in annual income.

Democrats want to expand the payroll tax cut (so workers would only pay 3.1 percent of their income) and Republicans want to extend it in its current form, but the two sides can’t agree on how to pay for the switch.

Sen. Dean Heller is the official author of the Senate Republican proposal, which would pay for an extended 4.2 percent payroll tax by freezing the salaries of federal workers, shrinking the federal workforce and increasing Medicare premiums on upper income earners. He’s argued for the last week that his bill is “the only version of the payroll tax cut that has the potential to pass Congress and to be signed into law.”

But only 20 Republicans -- and no Democrats -- voted for Heller’s bill the first time it came up, a week ago. When Republicans put up the same Heller bill for a repeat performance Thursday, it gathered a few more votes but far from a majority: 22 senators supported it.

Between those tallies -- 21 -- is likely the number of Republican senators who think a payroll tax cut is necessary but simply don’t want to vote for the Democrats’ proposal. Republican Sen. Susan Collins of Maine was the only senator to vote in favor of both proposals; the rest of the Senate Republicans voted against the Democrats’ version.

“I understand that not all Republicans support my plan,” Heller said. “To be honest, I disagree with some of my colleagues who claim a payroll tax holiday is not necessary.”

Nevada’s Republicans in the House think the payroll tax cut is necessary, but they’re not keen on any of the pay-for parts of the Democrats’ proposal. Senate Democrats -- and their counterparts in the House -- want to pay for at least part of the payroll tax cut with a surtax on incomes over a million dollars.

Reid charges that Republicans “are more interested in passing tax cuts for millionaires than tax cuts for the middle class,” adding that he would work in the coming days “to find common ground” to avoid a tax hike -- worth about $1,066 to the average Nevadan -- automatically kicking in if the cut isn't extended.

“Some Washington Republicans refuse to roll back special tax breaks for Wall Street millionaires in order to pay for a middle class tax cut for 1.2 million Nevadans,” Rep. Shelley Berkley added from the House floor Thursday. “That’s just not right.”

But Rep. Joe Heck says making this an either-or argument is what’s unfair, and that while he supports an extension of the payroll tax cut, charging a surtax on million-dollar-plus incomes would be enough to make him vote “no.”

“What they’re talking about is a lifetime increase for a short-term spending problem,” Heck said. “When you look at getting back up to 39.6 percent, which is what [the upper tax rate] will be at the end of next year, plus whatever their surcharge is, plus the Medicare tax that has been added on through Obamacare, now you’re looking at a 45 to 48 percent tax for folks at that income level” -- an income level, Heck pointed out, that includes many small-business owners who simply file their business tax returns as part of their personal income.

Rep. Mark Amodei, Nevada’s newest congressman, was more muted in his opposition. “We want to quit subsidizing the wealthy but that does not mean that we want to increase their taxes,” he said, stressing that the payroll tax cut extension must be paid for.

Amodei was optimistic about the House Republican proposal that’s still in the works, but looks set to combine an extension of the current payroll tax cut with reforms to the unemployment insurance system and approval of the Keystone XL pipeline -- a pipe that’s supposed to bring oil from Canada through the United States, but which has been slow-walked by the Obama administration much to the frustration of its supporters (most of whom are Republicans).

For Amodei, the decision appears to be as much about the philosophy behind the fight as the particulars of it. He recalled his interview with the Las Vegas Sun’s Anjeanette Damon on "To The Point" last month -- one in which he said he’d consider voting against an extension of unemployment benefits -- when weighing his decision on payroll tax cuts, hinting strongly he expects Congress to resolve this issue.

“If the choice is shut up and vote for the extension or vote against it? I’d vote against it. But I don’t think I’m going to be put in that position,” he said.

“Are we at the finish line? Is spending as low as we need to keep going? Absolutely not,” Amodei continued. “But at some point in time, you have to say: Are we going to shoot the hostage over this in December 2011, or are we going to count our blessings, take credit for the things we think we’re responsible for and show up for the second session of the 112th Congress ready to go again?”

But, he added, he thinks the House is on the “right track” with its proposal — enough so that “the president’s going to get an opportunity to make good on that [veto] threat.”