US News
Obama signs extension of payroll tax holiday
Feb 23, 2012, 1:36 GMT
Washington - US President Barack Obama signed legislation into law on Wednesday that extends through the end of the year a reduction in the payroll tax, paid by nearly all US workers into the public pension system.
The bill, which also extends jobless benefits for the long-term unemployed, was passed by Congress last week after Republicans dropped their demand that the tax measure be offset by spending cuts.
A temporary extension of the tax cut was to expire at the end of February.
The payroll tax is paid by nearly all US workers, and the 2-percentage-point cut averages 80 dollars a month for 160 million people. The so-called tax holiday was launched in 2011 as an economic stimulus within a compromise package on income taxes.
The payroll tax cut was due to expire at the end of 2011, but Congress passed a two-month extension in December. The cost of the additional extension from March to December is estimated at some 100 billion dollars.
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