Sunday, August 21, 2011

End the Payroll Holiday Tax

Unsurprisingly, Republicans want to let the payroll tax cut expire.

Former Massachusetts Gov. Mitt Romney did not flatly rule out an extra year for the payroll tax cut, but he "would prefer to see the payroll tax cut on the employer side" to spur job growth, his campaign said.

Translation: screw the working class and give tax cuts to big business. These businesses that Republicans call "job creators" haven't created many jobs lately.

The payroll tax is the 6.2 percent taken out of employee paychecks for Social Security. President Barack Obama pushed for a payroll tax holiday. The current payroll tax employees pay is 4.2 percent. Obama wants to extend the payroll tax holiday. Republicans don't care about the payroll tax and only want to use it as leverage against the Obama for more upper income tax cuts.

I have always thought the payroll tax holiday was an extremely stupid idea. The positive impact of the payroll tax holiday for working Americans has been negligible. The tax holiday has had a negative impact on generating revenue for Social Security. Obama and Republicans saying they care about Social Security. (Oddly enough by proposing cuts to Social Security.) The payroll holiday tax cut hurts Social Security.

The problem is that wages have been stagnant for working Americans. If Obama really wanted to help people put more money in their pocket he would propose raising the minimun wage. It would would a hugely popular proposal and put the Republicans in the position of having to tell Americans that raising the minimun wage is wrong. Of course, Obama is not going to do this.

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