U.S. Senate Majority Leader Harry Reid will abandon a plan tolower the payroll tax for employers and focus on continuing andexpanding the current tax cut for workers, according to aDemocratic aide.

Reid will propose reducing the payroll tax paid by employees to3.1 percent for 2012 from the current 4.2 percent, said the aide,who wasn't authorized to discuss the plan publicly. Eliminating theprovision to reduce the payroll tax for employers will reduce thepackage's cost to about $180 billion over 10 years from $265billion, the aide said.

Democrats plan to offset the proposal by imposing a surtax onannual income exceeding $1 million. The aide said the surtax wouldlikely be less than 2 percent, lower than the 3.25 percent levyDemocrats had sought.

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