Monday, September 13, 2010

Moratorium on payroll tax instead of extending current rates?

Here's a statement in today's HuffPost by Robert Kuttner, in his nine-point plan for Obama (of course, Obama can only propose, not enact, a feature of our government that many forget):

Propose a six month tax holiday for payroll taxes. Ask for the Republicans' support. This would provide direct tax relief to working people and lower the cost of creating jobs. It would provide more of a tonic to the economy and more practical help to American families than any of the Republicans' proposed tax cuts. Make up the loss to the Social Security trust funds with a temporary surtax on people making over $10 million a year.
Temporary tax cuts only work in the short term. They do not work if only for a six-month period. Besides, cutting my taxes by 3.2 (I'm not sure if he means to include the 1.45 percent Medicaid tax) percent over six months really doesn't mean anything. Most people will save only about $900. I'll take the money, since it's mine anyway, and pay down some debt. And if I'm a small business owner with a payroll -- let's say -- of $500,000 over that six month period, then the 3.2 percent will save me $16,000. Not enough savings there for me to hire even one employee.

Then in six months, I have to start paying payroll tax again.

And the "Republicans' proposed tax cuts" aren't tax cuts at all. They're just extensions of the current tax rates. So in other words, not raising taxes is now a tax cut.

This whole thing sounds nice, feels nice, but would do absolutely nothing. And $50 billion (Kuttner wants $200 billion) won't do much either, because it's a multi-year plan which would take at least a year for the government to ramp up.

Guys like Kuttner can think of only one way out of the mess. Spend more. Borrow more. Which is, of course, one of the reasons we're in this mess.

I have one more question for people like Kuttner. Can you write one article without invoking the memory of Hitler? This is getting sick.
Force major Republicans to choose between siding with Jefferson and religious tolerance or Hitler and book-burning.
I don't recall any Republicans that supported the Koran burning, but if you're a liberal, you can assume it.

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