Payroll Tax?

iVillage Member
Registered: 11-13-2009
Payroll Tax?
7
Sun, 08-21-2011 - 2:00pm

 

iVillage Member
Registered: 11-27-2009
Sun, 08-21-2011 - 11:09pm

It sounds really good to do an across the board payroll tax reduction to put money in American's pockets.

iVillage Member
Registered: 03-18-2000
Mon, 08-22-2011 - 2:27pm
It would seem to me that tax relief for the non-wealthy would be spent almost immediately. It wouldn't be invested in stock or start a business but would help to make life a little easier. Republicans To Oppose Tax Cut For Working People

Tax cuts have become the panacea of conservative economic thinking, but curiously, the AP reports Republicans are now lining up to raise taxes on nearly half of all Americans. In his radio address this weekend, President Obama called for an extension to the payroll tax holiday he signed into law last year, which benefits every working American, lowering the 6.2 percent tax that funds Social Security to 4.2 percent. The tax cut will expire in January, and many of the same Republican lawmakers who fought tooth and nail to preserve the Bush tax cuts for the wealthy are now coming out against an extension of the payroll tax holiday.

Why? Social Security payroll taxes mainly benefit middle- and working-class Americans, as the tax only applies to the first $106,800 of a worker’s wages. Thus, no matter how much money someone makes, they will see a maximum benefit of $2,136 from the holiday — a pittance compared to the savings for the wealthy from the Bush income tax cuts. Republicans claim these cuts for lower-income earners will do less to stimulate the economy than cuts for the wealthy or employers:

“It’s always a net positive to let taxpayers keep more of what they earn,” says Rep. Jeb Hensarling (R-TX), “but not all tax relief is created equal for the purposes of helping to get the economy moving again.”

Hensarling, the House’ fourth-ranking Republican, is right — some tax cuts do more than others to “get the economy moving again.” He just has it backwards about which cuts do that. Tax cuts for wealthy, such as those in the Bush tax cuts, are the single “least effective way to spur the economy and reduce unemployment,” according to the non-partisan Congressional Budget Office, because wealthy Americans were more likely to save their money than spend it.

Conversely, payroll tax cuts are one of the most efficient ways to stimulate economic growth, because low- and middle-income earners are more likely to spend their extra cash right away. But this analysis and similar ones from Moody’s and other experts has not disuaded Republicans from their myopic focus on tax cuts for the the wealthy only.

GOP budget guru Rep. Paul Ryan (R-WI) dismissed a payroll tax holiday in June as nothing but “sugar-high economics.” Meanwhile, presidential candidate Mitt Romney said he “would prefer to see the payroll tax cut on the employer side,” instead of for the employee. Both sides pay an equal amount for a total contribution of 12.4 percent per worker.

Indeed, the conservative dogma on taxes seems to flip for low-income earners, as many conservatives have explicitly called for the poor and middle-class to pay more in taxes.

 


Photobucket&nbs

iVillage Member
Registered: 02-05-2011
Tue, 08-23-2011 - 11:46am
Payroll taxes are dedicated to subsidize entitlements. The people who benefit from the entitlement help to pay for it. Income taxes go to general revenue for our government, and tend to have an affect on economic growth.

Republicans want tax cuts that increase economic growth, Democrats want tax cuts that defund entitlements.

Republicans tax ideas make sense if we want the economy to grow.

Democrats tax ideas make sense if you want something for nothing and wish to have greater deficits.
iVillage Member
Registered: 03-03-2009
Tue, 08-23-2011 - 9:53pm

Payroll taxes are meant to go into the Social Security fund.

Theoretically, a continuation of lower payroll taxes would mean that more money would go into the pockets of people who have not yet hit the ceiling for contribution.

That extra money could

Jabberwocka

iVillage Member
Registered: 02-05-2011
Wed, 08-24-2011 - 10:42pm
The entitlement funds are already bankrupt. Taking away from a fund that is already 20 trillion in the hole makes sense to Democrats. It doesn't make sense to Republicans.

Lowering income taxes, increases investment and new hiring.
iVillage Member
Registered: 03-03-2009
Wed, 08-24-2011 - 11:04pm
Huh. While I can see some rationale for attempting to restore the dwindling funds of SS, it seems to me a terrible dichotomy to give those who can best afford the expense, a break; while ignoring both the needs of the least, and the impact of their spending on the overall economy. That's trending too darn far towards oligarchy.

Jabberwocka

iVillage Member
Registered: 04-07-2002
Fri, 08-26-2011 - 11:15am
Well said!

 nwtreehugger