Thursday, December 22, 2011

I Can’t Believe It: A Great Editorial in USA Today on the Payroll Tax

In its editorial Payroll tax gridlock could actually be a plus USA Today puts important perspective on the payroll tax debate.

The editorial argues that Congressional gridlock could be a good thing in this case. Social-security funding is already rocky, and the social security trust fund is running a deficit this year, thanks in part to the payroll tax cut. Tax cuts (which USA Today appears not to like very much) have a way of becoming permanent – Who can vote to raise someone’s taxes after they have been “temporarily” lowered?

Taking a Keynesian position, the editorial argues that the extension of the payroll tax cut might create some short term stimulus, but the costs of the extension are much too large in terms of threatening  social security revenues.

I can’t believe it. A major news outlet, other than the Wall Street Journal, taking a reasonable position on a major economic and political issue.

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