Obama Wants To Extend Payroll Tax Cut
Imagine my surprise that the President wants to extend the payroll tax cut into 2012.
I haven’t checked my archives but I am pretty sure I called that one back when they first passed the cut. The only question is whether Obama really wants to extend the cut or if he wants to use this as a political ploy to block GOP proposals he opposes. My guess is in the end both sides will come together on this one. Nobody wants to be pegged as ‘increasing taxes’ during an election year (technically this would not be an increase but rather restoring the normal rate).
I’m of mixed views here. From a purely personal standpoint I would love for the cut to continue. As a self employed person I pay a double payroll tax compared to most workers, so any cut is a plus. Given that my net income after expenses and taxes is not much more than a counter clerk at McDonalds I’d love to see some more money in my pocket.
But at the same time I know that (despite denials from some in Congress) both Social Security and Medicare are in serious trouble and cutting the income flow into those programs is not a good idea. Of course that is the gorilla in the room, the need to address entitlements and the problem future demographic collapse.
But for now the odds are we will see lower payroll taxes into 2012.