President Obama and the Democrat party are currently complaining that the Republicans really do not support tax cuts for the middle class because the Republicans are not supporting the extension of the payroll tax cut. That may be good for the campaign trail, but it really doesn’t tell the whole story.
On Sunday, the Business Insider posted the following:
Sen. Jon Kyl (R-AZ), the retiring minority whip, said he is opposed to extending the payroll tax cut — raising taxes an average of $1000 on American families and risking eliminating half-a-million jobs from the economy — because he is concerned about the longevity of Social Security.
“The problem here is payroll doesn’t go into general revenue, it supports Social Security, and you can’t keep extending the payroll tax holiday and have a secure Social Security,” he said on Fox News Sunday.
The problem with the cutting the payroll tax is that you are taking money directly out of Social Security, which is already in financial trouble. The government has gotten into the habit of manipulating Americans through tax policy–if you do this, you get a tax break, if you do that, we tax you extra. The payroll tax gives Americans the sense that they are getting something back, without explaining that they are helping destroy the future viability of Social Security. Again–the problem isn’t taxes–it’s spending, and until we deal with the spending (and excessive government regulations), the economy will not recover.
As much as I would love to have extra money in my pocket to spend, extending the payroll tax cut is a bad idea.