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More or Less Taxes

December 21, 2011

I watched the morning business news with a bit of morbid fascination (mostly, though, because I was too lazy to get up and exercise… bad Jim!), and got to see the House leaders sit in chairs and look uncomfortable while begging the President or the Senate to talk about the Payroll Tax Holiday.  Geez, when they said Happy Holidays, I thought they meant something else.  Anyway, it’s pretty clear that the House Republicans are willing to take a news hit at the end of the year and let the tax relief go (it’s not “raising your taxes,” people) rather than get hammered for being dorks for the next two months when people are paying attention.

I would pine for the Keystone XL decision, but I’m guessing that the R’s in the House figure they can tack it onto some other “important piece of legislation that creates jobs” that doesn’t really create jobs that’ll get proposed because the Senate isn’t willing to cave.  (And actually, I think there’s a chance the Senate will cave before the end of the year, after Christmas.)  That, and I think the administration will actually turn down the pipeline project anyway.

Okay, whatever.  I still wonder if this is such a big deal why the Republicans in either portion of Congress aren’t pusing for a permanent tax cut.  Nick Gillespie is as well, and he’s more eloquent than I in this matter.

Here’s an idea: Let’s stop the fiction of “payroll taxes” altogether. FICA taxes are sucked out of every dollar of earned income from dollar one through around $110, 100 (starting in 2012); they are split between employer and employee and the total comes to a touch over 15 percent. Ostensibly, these funds go to cover Social Security and Medicare. But that’s not really true in either case. Social Security’s “trust fund” has been raided for a very long time to pay for general government outlays and, more recently, doesn’t provide enough cash to cover day-to-day expenses anyway. The funds collected for Medicare were never intended to cover the full costs of that program and they just keep falling far shorter every day.

Let’s be adult and admit that “payroll taxes” are just another form of income tax; it’s a mental dodge to pretend call them by a different name. If they were named accurately, perhaps it would allow us to discuss spending more accurately too. If we want a payroll tax “holiday,” then why not actually kill the taxes altogether? What sort of vacation from reality are we getting by trimming 2 percentage points anyway? What a strange time for a government that borrows more than 40 percent of every dollar it spends to miser out!

This is really a progressive tax cut anyway (minimum wage earners would get about $300/yr back, only when you get to full $100k do you see the whole break, you evil 1%-er).  So I don’t really get why this is such a cool idea, unless it’s just propaganda for proving that Social Security isn’t going to continue to pay out at its current rates, and all that money I’ve paid in will never be seen by me again.

So while it’d be fun to see the House cave at the last minute and cost this nation more than it saves in terms of payroll hijinks, I’m starting to change my mind and think the House should just let this particular facade fall of the crumbling building and expose the rest of the government as not having any new ideas on how to create jobs.

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