U.S. Sen. Charles Schumer is hopeful a bill will be passed by week's end to give middle class taxpayers a break while charging millionaires a surcharge to pay for it.
"We have to kick things into high gear to get the economy moving," he said, adding a middle class tax cut that saved the average family about $1,000 last year is set to expire.
Instead of just renewing it, he said, he is pushing to increase the savings so the average family saves about $1,500 on their tax bills instead of the previous $1,000. The measure would also give businesses a tax cut on the portion of the tax bill they pay - all of which would be paid for by millionaires.
Schumer said the bill to propose the cuts are a way for the middle class to keep more of what they earn, something he thinks will "jump start the economy" as there is more money left in paychecks.
"It's a no-brainer. It's essential we get this done," he said.
Schumer said if the previous tax cut is not extended, it would drive taxes up, which he said would be "devastating, a drag on the economy."
He said workers pay a 6.2 percent FICA tax, with the same amount paid by employers. Under a proposal from last year, employees got 2 percent off that amount. The bill to be voted on by week's end, he said, would not only extend the 2 percent tax cut about to expire but add to it so 3.1 percent would be cut from the 6.2 paid by employees resulting in a $1,500 average savings per family instead of just the $1,000 seen last year.
He said employers would also see a reduction in the amount paid in the FICA portion they pay, depending on the size of the business. Small businesses would be able to deduct half of the tax, with larger businesses able to deduct a portion. Schumer said that will be "a shot in the arm" for some.
"Anyone can tell you ... that wouldn't be small potatoes," he said, adding the tax cut would stretch paychecks and leave more money available for families to pay bills.
He said it is estimated the cut would pump $300 billion into the economy. Schumer said the funds benefitting from the taxes would still be made whole by a surcharge on incomes over $1 million so there is no impact on the nation's debt or Social Security.
"The very, very wealthiest among us who are doing very well will put a little bit in to help the middle class and help the economy," he said, adding, "they have to do their share as well."
He said that some Republicans have changed minds about opposing a tax on the rich, adding it is "a huge step" for them to support the measure to continue the tax cut approved last year, which he is hearing will happen. He said another version of increasing the cut is also expected from Republicans. He is uncertain if it will be for the 3.1 percent tax cut.