Ten Days Till Payroll Tax Hike

[3rdnlng]

Seriously? Gees, how would a tax cut for 160 million workers increase consumer spending? Gosh, that's too hard to figure out!

 

Are you a glue sniffer or something?

 

"The payroll tax cut is intended to provide a stimulus to the sluggish economy, which is growing at less than a two percent annual rate, but Douglas Elmendorf, the director of the non-partisan Congressional Budget Office, told the Senate Budget Committee in testimony on Nov. 15 that “the majority of the temporary increase in take-home pay” from a payroll tax cut “would be saved rather than spent.”

 

Elmendorf said a more cost-effective stimulant to the economy would be increase in unemployment benefits. “Households receiving unemployment benefits tend to spend the additional benefits quickly, making this option both timely and cost-effective in spurring demand for goods and services, and thereby economic activity and employment.”

 

From your buddies at MSNBC.

 

http://nbcpolitics.msnbc.msn.com/_news/2011/12/22/9636593-boehner-announces-deal-with-reid-on-end-to-payroll-tax-impasse

[UConn James]

This article argues that Boehner did the right thing for American businesses that have to live in the real world, rather than the politically-expedient thing, in passing the 2-month extension.

 

Link

The Senate bill did not cleanly extend the current Social Security employee share of 4.2 percent for two months. Instead, it created a two-tiered payroll tax with a rate of 4.2 percent for the first $18,350 of income in those 60 days, with a 6.2 percent rate above that.

 

This establishment of multiple rates of payroll tax presents serious logistical challenges for payroll processors. In fact, the National Payroll Reporting Consortium strongly opposed to the Senate bill based on this feature, writing:

 

“The difficulty is in establishing a new Social Security Taxable Wage limit of $18,350 for the two-month extension period. More than ten percent of the workforce is likely to meet that limit, and would be subject to the higher 6.2% tax rate for earnings over that amount. However, many payroll systems are not likely to be able to make such a substantial programming change before January or even February. The systems affected tend to be highly complex, normally requiring at least ninety days for a change of this magnitude for software testing alone; not to mention analysis, design, coding and implementation.”

 

Instead, the House passed an extension of the current system, which would purportedly provide time for software makers and users to prepare for a two-tier SS tax system. It would also be nice if there were some kind of understanding of whether this two-tier would be permanent-like or if this is just another case of the gov't !@#$ing with everyone and causing a lot of $ and effort to be expended on the part of American businesses and then a little down the road Obama & Reid say, "Oh, you know what? Nevermind that. We're just going to bump everyone up to __% for the full taxable income."

 

But, you guys keep up with your Boehner-this, Republicans-that, and give no chiding to a Democrat Senate that tried to pass what they did. Weren't they supposed to be the "deliberative" branch of the legislature, what with their 6-year terms? All the deliberation I see is cramming this down our throats, seeing if businesses can swallow it, and hoping to collect on tax penalties because they were trying to force a change that few/none could be ready for.

[B-Man]

Obama Was Willing to Let Payroll Tax Cut Expire

 

 

Ezra Klein, Chris Hayes Reveal What DC Media Knew: Obama Was Willing to Let Payroll Tax Cut Expire

Posted by Joel B. Pollak Dec 31st 2011 at 4:58

 

Larry O’Connor’s well-caught “sound bite for the day” yesterday deserves further elaboration.

 

Yesterday, on MSNBC, left-wing journalists Chris Hayes of The Nation and Ezra Klein of the Washington Post–no strangers to Democrat-media collusion–revealed that they had been part of an off-the-record White House briefing in which it was made clear that President Barack Obama planned all along to let the temporary payroll tax holiday expire, and then blame Republicans.

 

 

The meeting may have been the one first revealed on December 19, 2011 by ABC News’s senior White House correspondent, Jake Tapper, who tweeted that day that “a group of progressive media stars” had attended a private meeting at the White House with the President.

 

However, if Hayes is to be believed, the message of that meeting may have extended far beyond the “progressive” media niche at MSNBC, and reached a broader audience in Washington.

 

According to Hayes, “everyone in Washington” knew that Obama wanted the payroll tax extension to fail–and yet the same journalists eagerly covered the subsequent payroll tax debate as if Republicans were the only obstacle to an extension. The result of the media’s collusion was a year-end political victory for Obama and the Democrats at the expense of House leaders, the Tea Party, and Republicans in general.

 

The fact that even Republicans may have known that Obama did not intend to extend the payroll tax holiday strengthened the White House’s negotiating position.

 

It is also, however, a glaring indictment of the mainstream media, which knew of Obama’s true plan while encouraging Americans to blame the Tea Party and the Republicans, eagerly echoing Democrats’ accusations that the Tea Party had held the nation “hostage” for political gain.

 

In fact, as Hayes and Klein admit–laughingly, and why not?–Obama was the one holding a gun to the heads of the American people, knowing that a dutiful Washington press corps would erase his fingerprints.

 

 

 

 

 

 

Video at link

 

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