Hooray - we may be getting our "Payroll Tax Holiday" extended! Doesn't the name make you feel like breaking out the champagne glasses and celebrating? We're getting another holiday! It seems to be one of the few things that Democrats and Republicans can agree on.
But wait a minute - before we party on, let's look at the facts. The benefits to the everyday worker are small , but the cost to the government in making up the deficit is huge. The payroll tax holiday reduces worker's contributions into social security from 6.2 percent to 4.2 percent. To a worker making $50,000 a year this means getting an extra $1000 a year or $19.23 a week. I am not saying that today's worker's can't use the break and that they wouldn't put the money back into the economy, but I think that the cost to our national budget outweighs the advantages. Did the tax holiday improve the economy last year? It doesn't appear to have done much at all.
According to FactCheck.org , last year the Congressions Budget Office's figures projected that the tax holiday will drain the government's general fund of $85 billion in this fiscal year and $29 billion in fiscal year 2012. All of this money must be borrowed, and contributes to the national deficit.
We need larger scale propositions to get our economy going. Why don't we look at important issues like the tremendous trade deficit that this country suffers from. If we could get more of a market for American products, this would be a better way to grow the economy. We need to look at long term sustainable efforts to grow the economy, not short term solutions designed to give everyone instant gratification. When longer term solutions take effect I will indeed break out the champagne glasses!
Yeah I have to agree - it is time to cut out these 'benefits'. Obviously with the deficit as bad as it is, some hard choices have to be made and everyone is going to have to contribute. Aside from a re-work of Social Security which will eventually have to happen, I think two of the biggest areas that need to be looked at are the tax code and foreign aid. Something is terribly broken in a country where 45% of the population pays no income taxes. And why are we still cranking out over 45 billion in foreign aid when we are struggling to reduce the deficit?
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