Democrats insist on payroll tax reduction

© Scanpix/Reuters

Democrats in US Senate will propose another vote to extend payroll tax cut in 2012. Legislature offered by Democrats would lower employee payroll tax from current 4.2% to 3.1% next year. Officials plan to compensate $185 bn cost by a new 1.9% surtax on annual revenue exceeding $1m as well as by increasing charges to financials owned by Freddie Mac and Fannie Mae. The new proposal is an answer to Republicans concerns on how the cost of tax reduction would be covered.