Why The Payroll Tax Cut Shouldn’t Be Extended In One Chart
Via Veronique de Rugy:
Liberals want the payroll tax cut holiday extended because attached to it is yet another extension of already bloated unemployment benefits. The idea that a temporary payroll tax break will inspire more hiring is also a central (if ludicrous) tenet of President Obama’s economic rescue efforts.
Conservatives wanted it passed, it seems, based on a sort of knee-jerk assumption that all tax reductions are good tax reductions.
But the payroll tax funds Medicare and Social Security, spending on which is growing at alarming rates. In fact, the only thing keeping Medicare and Social Security from already near half of national spending has been the explosion in spending in other areas under Presidents Obama and Bush.
Curbing that growth in spending will take major reforms to both programs, something Congress is unlikely to do any time soon. So in the mean time, it’s madness to rob revenues from these programs to fund a tax holiday that has almost no real economic impact.
Republicans shouldn’t be fighting for a longer extension. They should let the tax holiday die.
Tags: deficits, medicare, national debt, payroll taxes, social security
