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MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

payroll tax hike on the way?

Posted by WARREN MOSLER on August 22nd, 2011

GOP may OK tax increase that Obama hopes to block

By Charles Babington

August 22 (AP) — News flash: Congressional Republicans want to raise your taxes. Impossible, right? GOP lawmakers are so virulently anti-tax, surely they will fight to prevent a payroll tax increase on virtually every wage-earner starting Jan. 1, right?

Apparently not.

Many of the same Republicans who fought hammer-and-tong to keep the George W. Bush-era income tax cuts from expiring on schedule are now saying a different “temporary” tax cut should end as planned. By their own definition, that amounts to a tax increase.

Former Massachusetts Gov. Mitt Romney did not flatly rule out an extra year for the payroll tax cut, but he “would prefer to see the payroll tax cut on the employer side” to spur job growth, his campaign said.

Romney completely misses the point, unless he wants it known he’s for favoring employers over employees?

Jobs come mainly from sales, and cutting payroll taxes for workers increases spending, sales, and jobs.

Cutting payroll taxes for business also has benefits, as that reduces costs which puts downward pressure on prices which helps consumers and does thereby add to sales, but in a much smaller way.

I continue to propose we suspend FICA entirely.

Looks to me like this latest discussion will only strengthen suspicions that Republicans are trying to keep the economy from improving to hurt the President’s chances of winning next year.

17 Responses to “payroll tax hike on the way?”

  1. Mario Says:

    these guys are better at flip-flopping around than John Kerry!!! LOL (and he didn’t flip flop all that much)

    Reply

  2. Ralph Musgrave Says:

    The idea that jobs don’t come from sales is such patent nonsense that there has to be some PSYCHOLOGICAL explanation for its popularity (rather than an economic explanation). My guess is that people think the “jobs come from sales” idea is too simple, so the idea must be wrong.

    It’s a bit like Hitler’s correct observation that if you tell a big enough lie, everyone believes it. Reason is that Mr & Mrs Average are reluctant to ascribe gross dishonesty to anyone.

    So to get simpletons (aka politicians) to accept the idea that jobs come from sales, perhaps the idea needs to be given a slightly more technical name.

    Reply

    Mario Reply:

    @Ralph Musgrave,

    “revenue induced employment”?

    Reply

    Neil Wilson Reply:

    @Ralph Musgrave,

    How about that Technical Name ‘the truth’. Given that politicians don’t understand what that is, it should be enough to bamboozle them with jargon.

    :)

    Reply

  3. Unforgiven Says:

    I can just see Lewis Black tearing into this one:

    ” but he “would prefer to see the payroll tax cut on the employer side”

    WAIT! That’s a brilliant idea, Mitt! Let’s take every stimulus dollar and cut it’s effectiveness by more than half! Let’s give money to someone who’s going to stick most of it under the Corporate Mattress! If that doesn’t work, we’ll just ask the Republicans to tax it away from them and give it to some unemployed people. I’m sure they’ll just vote that one in on their blackberrys without a second thought.

    Give it to PEOPLE? Are you out of your mind? They’ll just spend it on what corporations want to sell! We’ll have Zimbabwe before you can even get your kids off to school. Be sure to give them $1000 for lunch money, they’re gonna need it!

    Look. If you don’t like what the government is doing, then you need to get more money to the Corporations so they can buy decent politicians for a change! It’s your own goddamn fault!

    Reply

    roger erickson Reply:

    @Unforgiven,

    that sums up the competition

    in any transaction:
    the buyer starts from a position of advantage (or does she?)
    the seller wants to assert that they’re superior (are they?)

    Why the hell aren’t the two idiots coordinating, instead of competing for advantage? Someone needs to point out that there are bigger options they can only explore by working together?

    Reply

    roger erickson Reply:

    @roger erickson,

    It’s a context perennially lacking the confluence of ambition plus intelligence.

    Reply

    WARREN MOSLER Reply:

    and, to further make the point, not ‘give it to people’ but ‘stop taking it from people’

    Reply

  4. Macro Says:

    I think there are multiple drivers to the GOP pushing for an increase in the payroll tax;

    1. To push the economy into further hardship, and therefore gain politically
    2. To seem reasonable. GOP: “You see, Obama and the dems wanted to raise taxes, and we listened, we can compromise too. We aren’t radical.”
    3. And most importantly, following on from 2. The GOP will say hey we raised these taxes, now cut social security and medicare. And Obama being the surrender president, will agree and will probably cut social security at proportion near of 10 dollars to every dollar raised through the tax hike!

    Morons, the lot of them.

    Reply

  5. mike norman Says:

    It’s true that the Republicans are doing everything they can to destroy the economy in the hopes that it keeps Obama from getting re-elected. However, if a Republican does take the White House in 2012, they will continue on with their economy-killing strategies. Then they will use the same, lame, excuse that Obama is using now: that they “inherited” the mess. And another four years will be wasted.

    Reply

    roger erickson Reply:

    @mike norman,

    Which brings up the deeper question. Why, exactly, does this electorate continue to waste time on this type of politician, and this sort of electoral process?

    Every electorate gets what they deserve. How will this electorate’s offspring come to expect that they deserve far more?

    Reply

    CybrWeez Reply:

    @mike norman,

    Yea, vote for a non-dem or ‘pub. Now that would be real Change.

    Reply

    Dave Begotka Reply:

    @CybrWeez,

    “Believing” in voting is like being a one legged man at an ass kicking contest

    Reply

    MichaelC Reply:

    @CybrWeez, Whom do you recommend…the Greens? They are for contractionary policies also.

    Reply

  6. wh10 Says:

    The man ran Bain Capital. How can honestly believe this? He’s no dummy when it comes to business stuff. Or maybe he is, and all he knows are deals and finance.

    Reply

    Tom Hickey Reply:

    @wh10,

    Look at Trump, unless he was lying (which he certainly was on some things).

    Reply

    WARREN MOSLER Reply:

    he wouldn’t be the first

    Reply

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