Obama’s Two-Month Payroll Tax Holiday Doesn’t Work

“Pete Isberg, president of the NPRC today wrote to the key leaders of the relevant committees of the House and Senate, telling them that ‘insufficient lead time’ to implement the complicated change mandated by the legislation means the two-month payroll tax holiday ‘could create substantial problems, confusion and costs affecting a significant percentage of US employers and employees.’ ABC News obtained a copy of the letter. … The NPRC is a non-profit trade association that does not take positions on policy. The group represents organizations that provide payroll processing and services to more than 1.5 million employers, impacting one third of the private sector. ‘We’re neutral and we’d be happy to do the work,’ Isberg told ABC News. ‘The concern is really for those who don’t use a payroll service provider,’ he said. Americans will have different outcomes, he said, causing confusion ‘because they’ll have different outcomes. Some will have it done on time, some won’t, some will have adjustment notices later in the year.'”

It’s gonna be a nightmare and a mess. It cannot be implemented properly. “Isberg wrote that ‘many payroll systems are not likely to be able to make such a substantial programming change before January or even February,'” when the thing expires. “‘The systems affected tend to be highly complex, normally requiring at least ninety days for a change of this magnitude for software testing alone; not to mention analysis, design, coding and implementation.’ Part of the issue has to deal with Congress’ desire to make sure ‘that highly compensated employees not enjoy the full benefit of the 2% tax break because of bonuses or other high compensation falling into the first two months of the year,’ Isberg wrote, saying ‘there simply is insufficient time to implement this major change in withholding requirements.'”

This whole thing is bogus. It can’t be implemented as is. It’s a train wreck waiting to happen. And of course if the thing does become law and it’s not implemented properly, then guess what? Whose fault is it? The employer. That’s what Isberg means here when he talks about compliance notices, especially small businesses that don’t have payroll firms that have the computer software to handle all this automatically. You know, the mom and pops that do this themselves.



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