The payroll tax battle

The payroll tax battle

Neal Boortz
August 24, 2011

Last week I told you that Obama’s dogwashers are picking a fight with the GOP on the issue of the payroll tax cut … and the ObamaMedia is, of course, right there to help them do it.

In January of this year, payroll taxes were cut by two percent. The payroll tax cuts, like the Bush tax cuts, had an expiration date. That date was originally six months, but was extended to one year. If this cut is not extended, payroll taxes will rise to their normal rates in January 2012. When Obama returns from Martha’s Vineyard and presents his jobs plan he will propose another extension of the payroll tax cuts. Frankly, I like the idea. Some Republicans apparently don’t … and here’s the rub.

Apparently – for reasons that defy rational explanation – there are some Republicans who have expressed opposition to this extension. Now bear in mind the Republican Party does not oppose the extension. There is no resolution or party statement in opposition. That matters not. All you need is one or two Republicans and you’ve given the Obama junta all they need to make a nifty little issue of this in the media.

How is this working for our Dear Ruler? Well, here’s how ABCNews reports the story: “Some congressional Republicans, meanwhile, are vowing to oppose another temporary payroll tax cut, even as they pursue other tax cuts that would affect far fewer -- and far wealthier -- Americans.”

But who exactly are these Republicans who are “lining up” to oppose the extension of the payroll tax cut?

For this answer, you have to travel back to June, embroiled in the debate over the debt ceiling, when two Republican lawmakers said they would not support extending the payroll tax cut. These two Republicans were Senator Lamar Alexander of Tennessee and Rep. Jeb Hensarling of Texas. At the time they had three reasons: the need to shore up Social Security and Medicare, the need for a long-term plan (rather than short-term “gestures”) and the belief that the cut, thus far, had failed to create jobs or stimulate the economy.

What other Republicans are “lining up” against Obama on this issue? When asked, a spokesperson for House Majority Leader Eric Cantor says he "has never believed that this type of temporary tax relief is the best way to grow the economy.” (Though he did not explicitly say he wouldn’t support the cut.) He may have a point. The Wall Street Journal reports:

In December the White House touted a Deutsche Bank economic analysis predicting that the tax holiday would increase output by 0.7 percentage points and boost overall year-over-year GDP growth to 4%. They weren't even close. Instead the economy decelerated and growth in the first six months averaged 0.8%, down from 3% in 2010.

It matters not. There is no logic behind Republicans fighting tax cuts. And, in fact, perhaps they’re not! We’ve searched the news, and since last June we can’t find any Republicans voicing opposition to the extension, but this isn’t stopping the Democrat effort.

This should go into a textbook someday about idiotic political decisions. Some of these Republicans need an intervention. You don’t sit out there and fight a tax increase specifically targeting people who make over $200,000 a year and at the same time call for a tax increase on those who make less – no matter how insignificant. It is beyond stupid.

Make the payroll tax cut permanent. In fact, get rid of payroll taxes completely. It’s called the FairTax.

I knew there was more to this than we knew in the other thread. Good going, Boortz for digging it up.

TexasBlue wrote:I knew there was more to this than we knew in the other thread. Good going, Boortz for digging it up.

Hence my silence on this issue.

It's true this tax cut has had no effect on the economy. But then that was entirely predictable. It was a tiny cut, given to wage earners, and not even extended to job creators. On top of that, it was an extremely temporary cut. No one in the right mind would alter their spending behavior based on such a small and temporary cut.

This is just more evidence of Obama's ignorance of basic economics and his incompetence as an executive.