The Spectacle Blog

Stimulus Through A Payroll Tax Cut

By on 1.27.09 | 2:51PM

Mitch McConnell has mentioned instituting a payroll tax holiday for a year or two, and while there are plenty of details that can be debated over the size and time frame of any payroll tax cut, there are several arguments that Republicans could be using to make this the central part of their alternative proposal:

-- Payroll taxes are paid by virtually every working American and so cutting them would provide an immediate raise to just about everybody with a job.

--This is a tax cut for the middle class, not one that is targeted to the wealthy.

--Payroll taxes are also paid by businesses and they are specifically a tax on employment. If the major goal of any stimulus is to save or create jobs, than what better way to accomplish that than lowering what it costs businesses to hire or maintain workers? 

--A new CBO report describes how the spending component of the stimulus will inevitably be delayed because of various lags associated with any government project, but a payroll tax cut could go into effect expeditiously.

-- President Obama has proposed what he bills as payroll tax relief, but in actuality his plan calls for mailing subsidy checks to workers, and the plan it would not reduce the payroll tax burden on businesses.

--Most of the proposed stimulus spending pays for food stamps, extended unemployment benefits, more Medicaid, and infastructure projects that will only benefit a limited number of Americans. A payroll tax cut would benefit every working family in America.

Republicans won't win this one, but this would be a worthwhile hill to die on.

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