|
Payroll Tax Cut Uncertainty
On Saturday, December 17th, the Senate, passed an amended version of the Middle Class Tax Relief and Job Creation Bill, which would have extended the payroll tax cut and unemployment benefits for two months. It would also delay for two months a cut in Medicare payments to doctors. The $33-billion cost of the tax cut was to be covered by increased fees for government-backed loans and mortgages made by Fannie Mae and Freddie Mac.
On December 19th, the House refused to accept the Senate-passed version of the bill. If the payroll tax cut is not extended by the end of the year, 160 million Americans will see their payroll tax increase from 4.2 percent to 6.2 percent. It would also result in cuts to Medicare doctors' fees and a lapse in jobless benefits.
Alternately, two more months of the Social Security tax cut would amount to a savings of about $166 for a worker making $50,000 a year.
The proposed law increases the fee Fannie Mae and Freddie Mac charge to insure home mortgages. That fee, which Senate aides said currently averages around 0.3 percentage point, would rise by 0.1 percentage point under the proposed law. The increase will also apply to people whose mortgages are backed by the Federal Housing Administration, which typically serves lower-income and first-time buyers. The typical person who buys a $200,000 home or refinances that amount starting on Jan. 1 would have to pay roughly $17 more a month for their mortgage
Keep reading for updates on this matter. If you have any questions or if you would like more information, please contact Fred Schutz at 856-722-5300 ext. 201 or Dave Gill at ext 210.
| 
