The Social Security tax holiday on the employee side, an extra $1,000 to $2100 in the pocket of workers, is expiring in January. Republicans want to end the tax cut because it doesn’t put money in the pockets of the “job creators,” employers, the corporate class. They're pushing trickledown economics, while actually reducing the more stimulative, demand side of the equation. Here’s the bizarre story:
AP: News flash: Congressional Republicans want to raise your taxes. 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.
In one of those revealing Humpty Dumpty moments, where a word or a phrase means what you say it means:
Rep. Jeb Hensarling: "It's always a net positive to let taxpayers keep more of what they earn, but not all tax relief is created equal for the purposes of helping to get the economy moving again."
Onion News couldn’t have said it better. In a nutshell, here’s the deal:
Congress approved Obama's request to reduce the workers' share to 4.2 percent for one year; employers' rate did not change. Obama wants Congress to extend the reduction for an additional year. Millions of workers pay more in payroll taxes than in federal income taxes. The 12-month tax reduction (and extension) will cost the government (Soc. Sec. trust fund, not the general fund) about $240 billion.
In one of the most hypocritical moments yet, Rep. David Camp, R-Mich offered up the exact argument Republicans just sneered at for ending the Bush tax cuts:
Tax reductions, "no matter how well-intended," will push the deficit higher, Camp's office said.
An OMG moment to be sure. Only tax cuts for the employees cause deficits. But Republicans didn’t stop digging the hole deeper…
But Republican lawmakers haven't always worried about tax cuts increasing the deficit. They led the fight to extend the life of a much bigger tax break … To stimulate job growth, these lawmakers say, it's better to reduce income tax rates for people and for companies than to extend the payroll tax break. Mitt Romney "would prefer to see the payroll tax cut on the employer side" to spur job growth, his campaign said.
And isn’t it all about corporate wealthfare?