Saturday, December 10, 2011

Regardless of Its Merits, Republicans Opposed to Payroll Tax Cut Extension Lie About Its Impact

Why Can’t Conservatives Engage in an Honest Argument – Is It Because Facts and Logic and Data Aren’t On Their Side?

As the year comes to a close Congress must go through its annual rite of renewing tax provision that expire.  Many favorable tax provisions are passed for only a one or two year period.  The reason for this is that it makes the deficit look lower, since deficit number crunchers can factor in expiration of these tax items into their long term forecast, despite reality, which says they will be extended.

This year we have some new expiring tax provisions to deal with, most notably the expiration of the one year, temporary tax reduction of 2% in the employee contribution to Social Security.  Like every other “temporary” tax reduction the President and his supporters want to continue it, albeit only for a year (those deficit calculations again.)

Some Republicans want to allow it to expire.  See, it is not a tax cut for the wealthy and while it probably does not do much for the economy, these Republicans don’t want to take the chance that it might have a favorable impact on working men and women, and thus even slightly boost chances for Democratic success in the fall 2012 elections.

The point though is that even though there are good arguments against the cut Republicans just have to resort to false statements. 

Republicans voiced several concerns. First, they said, the tax cut could undermine the Social Security trust fund. 


“We should not be taking money from seniors to give to people who are not fortunate enough to have a job,” Mr. Garrett said.

So what’s wrong with this.  It is this.  While the money will be lost from the Social Security Trust Fund, the Treasury will restore those funds to the Trust Fund from general revenues and borrowings.  The Trust Fund will be no worse off than it would be with no payroll tax cut.

No seniors will be harmed in the payroll tax cut extension.  But Republicans don’t care.  If they can make a better argument by making things up, that’s what they will do.  After all, as low as the standards are for Democrats, the Republicans are bound and determined to go lower.  Maybe they just can’t help it.

Of course, most of this is just a cynical ploy.  Republicans opposed to extension know there are probably enough Democratic votes combined with a few Republican votes to pass the extension.  But by being opposed to the extension they can now claim fiscal responsibility without suffering in consequences.  They aren’t stupid you know.

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