One of my favorite fiscal policies through-out the crisis has been to cut the payroll tax. I would have cut both employer and employee and indeed, cut them to zero at the beginning of the recession.
Given that either employers would have used the money to hire or to offest credit losses and retain liquidity. And, that employees would have used the money to spend or pay down debt, I really don’t see how we could have lost from that.
It would have required extremely rapid expansions in the deficit. My proposal would have added an extra $1 trillion a year on to the deficit on top of what already was there. However, it would have provided a punch many times more powerful that what we got.
Anyway, that is history. What is on the table now is an extension of the payroll tax cut put in place by President Obama. The GOP opposes this. Lets not waste time with why.
Lets think about how we can get them not to oppose it. Is a matching or perhaps larger cut in the employer side temptation enough? Is a cut in the corporate rate temptation enough?
These are the ideas I hope folks are kicking around.
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Monday ~ August 22nd, 2011 at 12:44 pm
foosion
All GOP lawmakers care about is personal power and making life better for the best off, primarily through taxing and spending policy and deregulation. They don’t want to do anything good for the economy while Obama is in office, as it decreases their chances of being elected. They won’t even support their own policies, if Obama wants them (the individual mandate is a prime example).
Eliminating Social Security and Medicare while cutting taxes on upper income taxpayers might be inducement enough, but even that is not clear.
Monday ~ August 22nd, 2011 at 12:56 pm
engineer27
Perhaps I’m not cynical enough, but I would say that a permanent tax cut for business, offset by cutting something they hate (say, SNAP + TANF + Medicaid) might be enough to get them to allow a temporary extension of the wage-earner tax cut.
(Note: “allow,” since all R senators will still vote against. They just won’t filibuster. Most House Rs will also vote No.)
Monday ~ August 22nd, 2011 at 2:59 pm
rjs
companies are sitting on $1.8 trillion in cash and enjoying record-setting profits. what makes you think that more tax breaks are going to encourage them to hire more people?