Feature

Payroll tax: A cut the GOP doesn’t like

Why is the GOP opposed to extending the payroll tax cut for another year?

“Republicans are steadfastly opposed to raising taxes,” said Adam Serwer in WashingtonPost.com. “Except when they aren’t.” President Obama is currently urging Congress to extend the payroll tax holiday, which he pushed through last year as a way to put more money into working Americans’ pockets and stimulate the sluggish economy. This temporary tax cut, which reduces Social Security deductions from 6.2 percent to 4.2 percent, adds up to about $1,000 annually for most working families. Given the inflexible anti-tax zealotry of the modern GOP, you’d think this would be one Obama proposal that Republicans would support. Think again, said the Roanoke, Va., Times in an editorial. For some “baffling” reason, most Republicans say they’re opposed to extending the payroll tax cut for another year. Could it be that the GOP only hates taxes that affect wealthy people?

Obama’s the one playing politics here, said Investor’s Business Daily. His goal in extending the payroll tax cut isn’t to stimulate the economy. Such temporary measures have repeatedly been proven ineffective, because people know they can’t count on them in the future. Obama hopes Republicans vote against his payroll tax holiday so that next year on the campaign trail he can demonize them as “the party of tax hikes on working stiffs.” This ploy also enables Obama to claim that he’s “trying something, anything, to create jobs,” said The Wall Street Journal, but it’s an illusion. Employers get no break on their own Social Security contributions under this “holiday,” which adds $112 billion to the deficit while doing nothing to encourage hiring. The country needs real tax reform that lowers the burden on employers and workers, not patches on a broken system.

This is a puzzling new wrinkle in conservative thinking, said Ezra Klein in WashingtonPost.com. Republicans introduced and passed a temporary payroll tax cut to stimulate the economy during the recession in 2001, and again in 2008. Yet party leaders like Rep. Paul Ryan now dismiss the stimulative effects of such a cut as a “sugar high.” When George W. Bush was president, said Jonathan Chait in TheNewRepublic​.com, the GOP was happy to cut the payroll tax “to boost economic growth.” But when a Democrat is in the White House, the Republicans become gripped by an icy fear that easing the tax burden on America’s working families might “stimulate his re-election prospects.”

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