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Rosalind Peterson: Oppose Section 101 (Social Security) of the American Jobs Act Today [Local]

In Around the web on October 7, 2011 at 6:32 am

From ROSALIND PETERSON
Redwood Valley

Imagine giving large corporations a tax break which undermines our Social Security System. Write to your elected officials and oppose giving our corporations another tax break at the expense of our Social Security Program.

Full Text of the American Jobs Act
http://www.whitehouse.gov/jobsact/read-the-bill#SEC227

SECTION 101 - Reduces substantially the amount paid by businesses and employees into the Social Security system. This will have the impact of giving business the ability to reduce paying their share of employees Social Security benefits and also reduces the amount employees pay toward this program. When employees go to get their benefits in the near future they will find that they have underpaid and may not eligible for full benefits Social Security benefits in the future.

Toll Free # for all of our elected officials:  (1866) 220-0044

Contact the White House: http://www.whitehouse.gov/contact

In December 2010, Social Security payroll reductions were reduced in a bill passed by Congress.  Now they will be reduced again this time giving corporations a big break at our expense. Indeed taxpayers will have to pick up the differences in what is not collected as the missing funds will now come out of our taxes paid into the general fund.  Thus, we are once again subsidizing our large corporations.

Full Text below of Section 101 of the American Jobs Act

SEC. 101. TEMPORARY PAYROLL TAX CUT FOR EMPLOYERS, EMPLOYEES AND THE SELF-EMPLOYED
(a) WAGES.– Notwithstanding any other provision of law—
(1) with respect to remuneration received during the payroll tax holiday period, the rate of tax under 3101(a) of the Internal Revenue Code of 1986 shall be 3.1 percent (including for purposes of determining the applicable percentage under sections 3201(a) and 3211(a) of such Code), and
(2) with respect to remuneration paid during the payroll tax holiday period, the rate of tax under 3111(a) of such Code shall be 3.1 percent (including for purposes of determining the applicable percentage under sections 3221(a) and 3211(a) of such Code).
(3) Subsection (a)(2) shall only apply to
(A) employees performing services in a trade or business of a qualified employer, or
(B) in the case of a qualified employer exempt from tax under section 501(a), in furtherance of the activities related to the purpose or function constituting the basis of the employer’s exemption under section 501.
(4) Subsection (a)(2) shall apply only to the first $5 million of remuneration or compensation paid by a qualified employer subject to section 3111(a) or a corresponding amount of compensation subject to 3221(a).
(b) SELF-EMPLOYMENT TAXES.—
(1) IN GENERAL.—Notwithstanding any other provision of law, with respect to any taxable year which begins in the payroll tax holiday period, the rate of tax under section 1401(a) of the Internal Revenue Code of 1986 shall be
(A) 6.2 percent on  the portion of net earnings from self-employment subject to 1401(a) during the payroll tax period that does not exceed the amount of the excess of $5 million over total remuneration, if any, subject to section 3111(a) paid during the payroll tax holiday period to employees of the self-employed person, and
(B) 9.3 percent for any portion of net earnings from self-employment not subject to subsection (b)(1)(A).
(2) COORDINATION WITH DEDUCTIONS FOR  EMPLOYMENT TAXES.—For purposes of the Internal Revenue Code of 1986, in the case of any taxable year which begins in the payroll tax holiday period—
(A) DEDUCTION IN COMPUTING NET EARNINGS FROM SELF-EMPLOYMENT.—The deduction allowed under section 1402(a)(12) of such Code shall be the sum of (i) 4.55 percent times the amount of the taxpayer’s net earnings from self-employment for the taxable year subject to paragraph (b)(1)(A) of this section, plus (ii) 7.65 percent of the taxpayer’s net earnings from self-employment in excess of that amount.
(B) INDIVIDUAL DEDUCTION.— The deduction under section 164(f) of such Code shall be equal to the sum of ((i) one-half of the taxes imposed by section 1401(after the application of this section) with respect to the taxpayer’s net earnings from self-employment for the taxable year subject to paragraph (b)(1)(A) of this section plus (ii) 62.7  percent of the taxes imposed by section 1401 (after the application of this section) with respect to the excess.
(c) REGULATORY AUTHORITY.–The Secretary may prescribe any such regulations or other guidance necessary or appropriate to carry out this section, including the allocation of the excess of $5 million over total remuneration subject to section 3111(a) paid during the payroll tax holiday period among related taxpayers treated as a single qualified employer.
(d) DEFINITIONS.—
(1) PAYROLL TAX HOLIDAY PERIOD.—The term ‘payroll tax holiday period’ means calendar year 2012.
(2) QUALIFIED EMPLOYER.—For purposes of this paragraph,
(A) In general. — The term “qualified employer” means any employer other than the United States, any State or possession of the United States, or any political subdivision thereof, or any instrumentality of the foregoing.
(B) Treatment of employees of post-secondary educational institutions.– Notwithstanding paragraph (A), the term “qualified employer” includes any employer which is a public institution of higher education (as defined in section 101 of the Higher Education Act of 1965).
(3) AGGREGATION RULES. – For purposes of this subsection rules similar to sections 414(b), 414(c), 414(m) and 414(o) shall apply to determine when multiple entities shall be treated as a single employer, and rules with respect to predecessor and successor employers may be applied, in such manner as may be prescribed by the Secretary.
(e) TRANSFERS OF FUNDS.–
(1) Transfers to federal old-age and survivors insurance trust fund.—There are hereby appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) amounts equal to the reduction in revenues to the Treasury by reason of the application of subsections (a) and (b) to employers other than those described in (e)(2). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund had such amendments not been enacted.
(2) Transfers to social security equivalent benefit Account. –There are hereby appropriated to the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1(a)) amounts equal to the reduction in revenues to the Treasury by reason of the application of subsection (a) to employers subject to the Railroad Retirement Tax.  Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Account had such amendments not been enacted.
(f) COORDINATION WITH OTHER FEDERAL LAWS.—For purposes of applying any provision of Federal law other than the provisions of the Internal Revenue Code of 1986, the rate of tax in effect under section 3101(a) of such Code shall be determined without regard to the reduction in such rate under this section.
SEC.  102. TEMPORARY TAX CREDIT FOR INCREASED PAYROLL.
(a) In General.—Notwithstanding any other provision of law, each qualified employer shall be allowed, with respect to wages for services performed for such qualified employer, a payroll increase credit determined as follows:
(1) With respect to the period from October 1, 2011 through December 31, 2011, 6.2 percent of the excess, if any, (but not more than $12.5 million of the excess) of the wages subject to tax under section 3111(a) of the Internal Revenue Code of 1986 for such period over such wages for the corresponding period of 2010.
(2) With respect to the period from January 1, 2012 through December 31, 2012,
 (A) 6.2 percent of the excess, if any, (but not more than $50 million of the excess) of the wages subject to tax under section 3111(a) of the Internal Revenue Code of 1986 for such period  over such wages for calendar year 2011, minus
(B) 3.1 percent of the result (but not less than zero) of subtracting from $5 million such wages for calendar year 2011.
(3) In the case of a qualified employer for which the wages subject to tax under section 3111(a) of the Internal Revenue Code of 1986 (a) were zero for the corresponding period of 2010 referred to in subsection (a)(1), the amount of such wages shall be deemed to be 80 percent of the amount of wages taken into account for the period from October 1, 2011 through December 31, 2011 and (b) were zero for the calendar year 2011 referred to in subsection (a)(2), then the amount of such wages shall be deemed to be 80 percent of the amount of wages taken into account for 2012.
(4) This subsection (a) shall only apply with respect to the wages of employees performing services in a trade or business of a qualified employer or, in the case of a qualified employer exempt from tax under section 501(a) of the Internal Revenue Code of 1986, in furtherance of the activities related to the purpose or function constituting the basis of the employer’s exemption under section 501.
(b) Qualified employers. – For purposes of this section—
(1) In general.—The term `qualified employer’ means any employer other than the United States, any State or possession of the United States, or any political subdivision thereof, or any instrumentality of the foregoing.
(2) Treatment of employees of post-secondary educational institutions.—Notwithstanding subparagraph (1), the term “qualified employer” includes any employer which is a public institution of higher education (as defined in section 101 of the Higher Education Act of 1965).
            (c) Aggregation rules. – For purposes of this subsection rules similar to sections 414(b), 414(c), 414(m) and 414(o) of the Internal Revenue Code of 1986 shall apply to determine when multiple entities shall be treated as a single employer, and rules with respect to predecessor and successor employers may be applied, in such manner as may be prescribed by the Secretary.
            (d) Application of credits. – The payroll increase credit shall be treated as a credit allowable under Subtitle C of the Internal Revenue Code of 1986 under rules prescribed by the Secretary of the Treasury, provided that the amount so treated for the period described in section (a)(1) or section (a)(2) shall not exceed the amount of tax imposed on the qualified employer under section 3111(a) of such Code for the relevant period.  Any income tax deduction by a qualified employer for amounts paid under section 3111(a) of such Code or similar Railroad Retirement Tax provisions shall be reduced by the amounts so credited.
            (e) Transfers to Federal Old-Age and Survivors Insurance Trust Fund.—There are hereby appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) amounts equal to the reduction in revenues to the Treasury by reason of the amendments made by subsection (d).  Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund had such amendments not been enacted.       
            (f) Application to Railroad Retirement Taxes.  For purposes of qualified employers that are employers under section 3231(a)of the Internal Revenue Code of 1986, subsections (a)(1) and (a)(2) of this section shall apply by substituting section 3221 for section 3111, and substituting the term “compensation” for “wages” as appropriate.
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