This Had to Hurt: Obama Pitches a Tax Cut
I give him credit for moving -- slowly -- in the right direction. Had he proposed a payroll tax cut one year ago, when he took office, instead of that greasy useless pile called the American Renewal and Reinvestment Act, he'd be in much better political shape.
From the Wall Street Journal:
Aides to President Barack Obama are proposing a one-year reduction in the payroll tax as part of negotiations with Congress on a broader package to stave off income-tax increases due to take effect next year.
Under the White House plan, the Social Security tax paid by workers would drop temporarily by 2 percentage points, to 4.2% from 6.2%, a person familiar with the proposal said. For a worker earning $40,000, the tax savings would be $800.
The proposal has not won the approval of congressional Democrats or Republicans. Its emergence in the broader tax negotiations is a sign that the White House is trying to break the logjam on those talks before the end of the year, when tax cuts signed into law by former President George W. Bush are due to expire.
White House officials proposed the cut as a way to stimulate the economy, said the person familiar with the talks.
So, I'm giving this two cheers. One cheer because it's a tax cut, and that's always a good thing. And another cheer because, well, does it make me a bad person that I know this is killing him, and I like that?
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Jul '10
Re: This Had to Hurt: Obama Pitches a Tax Cut
Under the current Ponzi scheme, don't the current workers pay for the bennies of the retired? So, would the current retired be receiving less? Is Obama forcing the elderly between medicine and dog food?
Oh, wait.... I forgot... We All have a "lockbox" in D.C.
Aug '10
Re: This Had to Hurt: Obama Pitches a Tax Cut
A two year extension on tax cuts? And 13 more months of unemployment. benefits?
I think the Tea Party just; got another shot of adrenaline. After the message that was sent in the last election this is an especially weak and pathetic performance from the GOP. They just won't fight.
Edited on Dec 6, 2010 at 4:25pmAug '10
Re: This Had to Hurt: Obama Pitches a Tax Cut
Yes, it's a rather limp handshake -- but then, this is Obama. I'd praise him for putting out his hand at all.
Aug '10
Re: This Had to Hurt: Obama Pitches a Tax Cut
I think the reduction in Social Security Taxes is a smart one, especially if it affects both sides of the tax -- employee and employer. Employees will take home more money and employers will have more to reinvest.
If Obama does this in addition to the Bush Tax cuts, it will be a good thing. FICA taxes are already put straight into the general budget -- through budgeting shenanigans -- so the lowering of FICA has no real affect on current SSA benefits except to potentially expand deficit spending. This deficit spending could be offset if the FICA reduction is two sided and actually stimulates jobs.
One additional attribute of the FICA tax is that it has a "maximum." It only applies to the first $106k an employee earns. Those who make more pay no additional FICA tax. This means that Obama can sell it as a "reduction for the poor," who are disproportionately affected by the tax.
Jul '10
Re: This Had to Hurt: Obama Pitches a Tax Cut
Nov '10
Re: This Had to Hurt: Obama Pitches a Tax Cut
Like Rob, I'm pleasantly surprised that Obama gave as much ground as he did so quickly. But why on earth have the Republicans agreed to this? Voting to increase government spending is a clear signal that the Republican party leaders didn't hear anything that the tea party was saying. Short-term payroll tax reductions have almost no supply-side impact whatsoever. They are the worst type of tax cuts. Taxes are too high and need to be cut, but decreasing spending to reduce the size of gov't is, or ought to be, priority number one.
May '10
Re: This Had to Hurt: Obama Pitches a Tax Cut
My understanding is that the cut only applies to the employee side. Thus, no incentive for the employer to create jobs.
Aug '10
Re: This Had to Hurt: Obama Pitches a Tax Cut
I just read that in the piece. Truly saddening.
Jul '10
Re: This Had to Hurt: Obama Pitches a Tax Cut
Am I the only conservative who agrees with extension of unemployment benefits? For blue-collar people who can't find jobs, that $350 or $450 a week is all there is. Where else are they going to go? Welfare, in some instances, but otherwise, they're well and truly stuck.
I hear guys like Mark Levin raving about folks on unemployment as though they're spineless parasites. Easy for him to say.
Unemployment benefits have been integral to the safety net for decades. Let's find another way to pay for them. There's plenty of fat.
Dec '10
Re: This Had to Hurt: Obama Pitches a Tax Cut
"Had he proposed a payroll tax cut one year ago, when he took office, instead of that greasy useless pile called the American Renewal and Reinvestment Act, he'd be in much better political shape."
But when he took office, he was convinced of the rightness of his and Reid's and Pelosi's program to cure the recession. An actual tax cut was the furthest thing from his mind -- instead, he was counting the days until the newly booming economy would enable him to enact a tax increase.
That's why this deal is so bitter for him. Not only does he not get his tax increase, but in the back of his mind he realizes that he's just been forced to admit (at least obliquely) that lower tax rates are good for job creation and higher tax rates are job killers.
Aug '10
Re: This Had to Hurt: Obama Pitches a Tax Cut
Kenneth: Am I the only conservative who agrees with extension of unemployment benefits? For blue-collar people who can't find jobs, that $350 or $450 a week is all there is. Where else are they going to go? Welfare, in some instances, but otherwise, they're well and truly stuck.
I hear guys like Mark Levin raving about folks on unemployment as though they're spineless parasites. Easy for him to say.
Unemployment benefits have been integral to the safety net for decades. Let's find another way to pay for them. There's plenty of fat. · Dec 6 at 6:02pm
What have you done with Kenneth? First, Sarah Palin as RNC chairman only makes you "leery", and now you're plumping for unemployment bennies?
Where has our Mencken-loving, curmudgeony ur-libertarian gone? I miss him.
Jul '10
Re: This Had to Hurt: Obama Pitches a Tax Cut
Ah, conservatives lose again, but elites on the East Coast claim victory.
They are unhappy about the extension of unemployment benefits, which is an obvious increase in government spending, but the fact that tax rates remain the same for two years is a victory? By doing this, the Democratic administration has basically frozen the tax rates for the next two years. There will be no decrease in payroll or income taxes, and corporate taxes will remain at current levels. In effect, President Obama made it clear that will not be a tax cut during the first term of his administration. That's a huge victory for him and the Democratic party.
As far as 2012 is concerned, Obama neither raised taxes nor cut them, so the rallying cry of "If we re-elect Obama, he'll raise taxes on us" is countered by "I did not raise them before."
In this pre-inflationary climate (what did U.S. Treasuries do yesterday?), keep in mind that current levels of taxation are still not stimulative for economic growth.
Aug '10
Re: This Had to Hurt: Obama Pitches a Tax Cut
Kenneth, as someone who's secretly a very mushy-hearted gal, I sympathize with your feelings. But I also know that there are people turning down jobs that they otherwise would have taken because of the benefits.
They are not "parasites" for doing this. They are making a rational -- and at least in some cases quite moral -- decision. Why should a single mom with a young child to care for acknowledge the offer of a job that pays less than her unemployment benefits? You could say that for her own pride and self-respect, she should work, even for less pay. But her first duty isn't to her pride or self-respect. It is to care and provide for her child, which is made more difficult in both time and money if she accepts a job that pays less than benefits.
And so on.
We don't have to think that anyone is unworthy, wicked, or shiftless to acknowledge that unemployment benefits tend to reduce employment. It cannot be helped.
The question is, can we afford this drag on employment or not? If so, how?
Edited on Dec 7, 2010 at 7:21amDec '10
Re: This Had to Hurt: Obama Pitches a Tax Cut
Kenneth: Am I the only conservative who agrees with extension of unemployment benefits? For blue-collar people who can't find jobs, that $350 or $450 a week is all there is. Where else are they going to go? Welfare, in some instances, but otherwise, they're well and truly stuck.
I hear guys like Mark Levin raving about folks on unemployment as though they're spineless parasites. Easy for him to say.
Unemployment benefits have been integral to the safety net for decades. Let's find another way to pay for them. There's plenty of fat. · Dec 6 at 6:02pm
Dr. Johnson observed, "the prospect of being hung in a fortnight concentrates one's mind wonderfully." When the 26th week is looming, you get a strong sense of urgency about finding ANY sort of work to keep the wolf from the door. I know this from recent personal experience.
But when that 26th week gets pushed out to the 39th, and then the 52nd, that sense of urgency diminishes and one's mind ceases to be as wonderfully concentrated.
For decades, 26 weeks was long enough. I believe 99 weeks is far too long.