So the Republicans have agreed to a two month extension of the payroll tax “holiday.” A few points:
- There’s a good case to be made that economic uncertainty causes businesses to reduce long term investments (e.g. in things like employees), therefore, exacerbating economic downturns. Admittedly, causality is difficult to prove, but there’s a certain logic to the argument. So what to make of a Congress and administration that comes up with a two month tax holiday? What’s next? Weekly tax changes? Daily? Can things get any more uncertain in the tax realm?
- Are we going to admit now that Social Security is not a pay-as-you-go program? If we’re getting a “holiday” from paying into it and yet retirees will continue to take out the same amounts, then where the devil is the money coming from? (Answer: general funds).
- Are Americans really going to cheer Obama for a stupid two month payroll tax holiday? Apparently, Obama is blathering on that the average family will save $40 a month… for two months. That comes to a whopping $80. Now don’t get me wrong, I’m a cheapskate and am happy to keep an extra eighty bucks, but I’d much prefer long term tax reform to this foolishness.
- Keystone pipeline? The Republicans were brilliant, I thought, to link the pipeline to their own one year tax cut extension bill. And now they’ve just rolled over, given up, lost the strategic advantage. What happened?