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Posted by on Jun 13, 2011 in Business, Economy, Politics | 6 comments

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.

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  • casualobserver

    Agree, pretty easy to see this one…gives in to the Rs on lowering “taxes” and gives in to liberals as stimulus payment to the working class.

    Whether it is enough to get him more than a temp extension of the debt ceiling is still in doubt in my mind though.

  • DLS

    What is this going to do to Social Security and Medicare?

    Oops — the liberal media, in addition to being reluctant to report on bad news like that, is often clueless in such matters.

  • slamfu

    Surprise surprise, the dems don’t have the balls to undo the tax cuts during an election year. Oh wait, its not an election year, it just seems that way. So they don’t have the balls to do it this year either. It really does seem like my only two choices politically are those without a plan of action or those with a really bad plan of action.

  • davidpsummers

    As that article notes, this deprives money to Soc. Sec. and Medicare, both of which are already in structural problems. It also is a bit of a bait and switch. These “taxes” are suppose to be contributions to our future retirement.

    The problem is that our debt is so high, the stimulating the economy with lower taxes or spending become problematic. I think we need to look more a regulatory relief.

    I think I heard someplace that business spends more on regulation compliance than it does on federal corporate taxes.

  • DLS

    Well, we knew spending isn’t “investment,” and we know taxes aren’t, either. (Nor is there an individual account like a shoe box in West Virginia with your name on it.) At least, some of us know the basics.

    I haven’t heard much concern expressed in the media about a future debt trap. Yes, we could have one of these (or someday risk default, even) just as other, more-profligate-still*, governments threaten.

    * Maybe it’s because these more-profligate governments are seen by a number of people as superior to and models for our own.

  • davidpsummers

    Well, we knew spending isn’t “investment,” and we know taxes aren’t, either. (Nor is there an individual account like a shoe box in West Virginia with your name on it.) At least, some of us know the basics.

    Well, just because is seemed clear to some of us it was going to be a lie doesn’t mean we should let the people who pushed the idea off the hook. If they are going to abandon a commitment they have been making for decades, then we should stop and acknowledge it and ask, what else should we stop doing. And it would be nice to at least keep _part_ of the promise that some have, in fact, been relying on.

    However, I worry it will be even worse. We will continue to flip flop on whether they are “taxes” or “contributions” in order to keep taking money on a promise that isn’t going to be kept.

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