Yesterday morning on ABC’s This Week, Arianna Huffington co-founder and editor-in-chief of the mega blog Huffington Post suggested a “payroll tax holiday,” (4th screen from top, 11:40) as one of the measures that President Obama and Congress should take to boost jobs. The payroll tax holiday is something that I have strongly supported since launching this blog.
“The idea was first proposed in December by U.S. Representative Louie Gohmert from Texas. President Bush should have fought for it. He’s gone so now it is up to you Mr. Obama.”
Perhaps now that there is some support from Huffington, a liberal powerhouse, the idea can be implemented. Allowing We the People to keep more of the money that we earn, and too use or save that money as We the People see fit is by far the best tool in the government’s arsenal for boosting employment.
Folks, let me be clear; I would not obtain any immediate benefit from a freeze on payroll tax collections because I am currently unemployed. My benefit will come from the boost in economic activity that would come from a payroll tax holiday – immediately. By “immediately,” I mean that We the People (excluding me) will begin to spend and save the extra funds in pay immediately on receiving those funds. Some people will pay bills, some will buy an extra meal at a restaurant, others will bank the money with each paycheck and use it for a major purchase. No matter what each individual does with their money this freeze will have far more positive impact than the President’s alleged stimulus package which was too slow in spending and too tied up in pork and political favors to be of much effect.
And no, this will not “cost” the government anything because it is: 1) Not a cost but a reduction in government revenue; 2) The reduction will be short term because it will boost the economy and therefore increase longer term tax collections; and saving the most important for last, 3) The money does not belong to the government. The money belongs to the people that did the work to earn the money and these people should have that money during these difficult times.
A payroll tax holiday is the best way for You the People with jobs to help We the People without jobs because it will cause You with jobs to stimulate the economy thus creating opportunity for the We without the jobs. And that is what We need.
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I can only imagine that resistance comes from the idea that we don’t know how big our payroll taxes are. Once we really see how much comes out, we might be more anti-tax than before. Regan actually pulled a fast one with payroll taxes–he raised them, but because he decreased income taxes, he got credit for lowering taxes. Also, the conservative talking heads love to say that 50% don’t pay taxes– meaning income tax–can they stand such a blatant acknowledgement that everyone who works pays payroll taxes?