The Payroll Tax Cut Is Doomed

No matter who wins in November, your taxes are probably going up next year. That's because Congress has basically no interest in extending the payroll tax holiday that was so hotly contested earlier this year, the New York Times reports. Negotiators are fixated on the so-called "fiscal cliff," not the payroll holiday, and the White House seems content to let the tax break die. "This has to be a temporary tax cut," Tim Geithner said recently. "I don't see any reason to consider supporting its extension."

Analysts tell the Times that allowing the cut to expire could shave a full percentage point off 2013 GDP, and cost the economy millions of jobs, while costing the average family around $1,000. Economists say it has a stronger stimulating effect than other tax cuts because it goes mainly to working families that need to spend the extra money. "Obama and Congress both need to hear this alarm clock," one conservative economist wrote recently, calling a payroll tax hike an "insult to the middle class." (More payroll taxes stories.)