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Sunday, December 04, 2011

The Games We Play: Payroll Tax Cut

Obama wishes to extend the payroll tax cut. The Republicans, the party of tax cuts, wishes to prevent this. Why? Of course, to make Obama look bad, thus giving the GOP an edge in the next election. Here is my reasoning.

Leaving aside for the moment whether we agree that this is the GOP motive, can we say that the GOP has some other reasoning for eliminating a very popular reduction in taxation? Well, they would, and do, say that a tax reduction is indeed needed for the middle classes in this time of recession, but that we need to pay for this so that the deficit is not increased--and they don't mean to pay for it with another tax increase on the rich. Because a tax increase on the rich--I mean, the job creators--would be bad for the economy. You see, the GOP states that increased taxes reduce the economic engine. Tax decreases improve the, let us say, the economic mpg. Tax reductions pay for themselves, in other words, by increasing efficiency, letting people spend as they will.

Well, if payroll taxes are reduced, that would increase the economy and pay for itself. Why vote it down with some excuse that we now suddenly need to pay for it? Do tax cuts pay for themselves or don't they?

There is only one reason for the GOP to come out against the tax cut for the middle classes: to make Obama look bad. They are willing to harm this country for their own pathetic grab for power.

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