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‘Join hands and jump’ is the only way to achieve a payroll tax compromise

February 10, 2012

What will it take for the payroll tax conference committee to arrive at a deal?

One Washington, D.C., tax expert predicts a full 2012 extension of the employee payroll tax cut (and unemployment benefits and the doctors' Medicare payment fix) will come only when the Republican and Democratic negotiators go behind closed doors, join hands and jump.

The conferees' eventual compromise won't please hardliners in either party.

And we taxpayers will likely not get any advance warning that a deal is done.

"We'll realize they are joining hands and jumping when they fall on us," said Mel Schwarz, partner in Grant Thornton's Washington, D.C., National Tax Office.

Schwarz, who was with the Congressional Joint Committee on Taxation when I worked on Capitol Hill, made his prediction during a 2012 legislative update webcast this afternoon.

I'll share some more tax insider insight from Mel and Dustin Stamper, manager of Grant Thornton's National Tax Office, later, but I loved the visual picture Mel conjured and wanted to share it.

In my mind's eye, I'm adding a soundtrack of the linked lawmakers singing Kumbaya as they head earthward.

And I'm glad I'm not in D.C. so I won't have to provide cushion for their landing, although I suspect it's really all of our eventual tax payments that the Representatives and Senators will count on for padding.

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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