Q&A: US payroll tax cuts

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US economy
Image caption,

The pressure is on the US government to continue with tax cuts

Republicans and Democrats have been locked in a last-minute battle to extend a tax cut to 160 million US workers worth about $1,000 (£638) a year.

The tax break will expire unless the dispute is resolved by 1 January, with analysts concerned that could make the US economic recovery even more fragile.

What is the payroll tax?

Why is Congress deadlocked over the issue?

What is the difference between the rival proposals to solve the problem?

What would be the long-term effects on the US of scrapping the tax cut?

What will Congress do next?