President Obama has jumped on board with his party, pushing what he is calling the “$40” tax cut – essentially, saving Americans $40 per paycheck. He is all set to trot out “ordinary Americans” during his address today, to wax eloquent on what they won’t be able to buy once the evil Republicans do away with their $40 savings.
But if we’re going to debate about who is the better tax cutter, people should be asking themselves: would I rather save $40 per paycheck for two months, or $40 per paycheck for the year? After all, the House GOP have laid out numerous reasons why a two-month extension is a horrible idea: it doesn’t give business owners any more certainty, it will make life hell for payroll companies, costing them extra money as they have to tweak their programming to meet the ever-changing tax code.
But perhaps the most disgusting thing about the president’s stance on the “$40” tax cut is that the full year extension was his original plan to make Republicans look bad – the full-year payroll tax extension was President Obama’s idea. It was originally rejected by Republicans because the President attached a tax hike on high income earners to the original language. The “compromise” that they’re bickering over now came out of the Senate…the “compromise” part of it is that an extension of unemployment payouts comes along with the two-month extension of the payroll tax cut.
It’s only through the marriage of the mainstream media and the Democrat Party that this debate is making the GOP look bad – instead of reporting on the truth of the situation, the media has instead decided, as usual, to spin the story to make Republicans look bad. That is why this debate is so important to President Obama: it’s an election year, and he wants to build up a false reputation for being a tax-cutting warrior for the middle class…and if Congress passes a two-month extension instead of the full year, then he can re-introduce the payroll tax cut in February, along with some other rider that he knows full well Republicans will never go for, and then spend another month smearing the Republicans for opposing his tax cut.
This is why the only tax cuts Democrats will ever support are temporary tax cuts. President Obama had no problem getting behind the Bush tax cuts during the 2010 lame duck session because he knew he could use it to his advantage, making himself look good, and the tax cuts were temporary, meaning they would soon expire anyway.
The thing that no one, Democrat or Republican (save a few members of the right-wing media) is talking about is the fact that this payroll tax cut takes money away from our already strained Social Security system. Payroll taxes pay for Social Security, and this tax cut that President Obama has proposed takes money from this overburdened program with no attempt to reform Social Security to make it viable over the long-term. How long will it take before we feel the effects that this payroll tax cut has on Social Security in the form of even more debt and financial hardship for our nation?
Is $40 really worth it?