The Republicans, who consider the entire concept of taxation to be evil, have found a tax increase that they actually like.
Last December, in an effort to stimulate the economy, Congress passed a one-year reduction in the payroll tax. The actual rules are a bit complicated, but basically, the roughly 8% Social Security/Medicare tax that every working American pays (including the nearly half that don’t earn enough to pay Federal income tax) was reduced to about 6%, a little more than a 25% reduction.
Now we’re looking for ways to cut spending, and the Republicans are proposing not to extend this tax break for another year. If this were a package deal, together with ditching the Bush tax cuts, I’d be OK with it.
To be fair, the Republicans have a point: putting a few hundred extra dollars into the pockets of ordinary Americans (who don’t create jobs) won’t do much to pull the economy out of its slump. On the other hand, putting thousands of extra dollars into the pockets of the richest Americans hasn’t helped much, either.
For my part, I’m not sure that tax cuts do that much to stimulate the economy, and I get annoyed with politicians of either stripe who push for tax cuts just to score votes. But the underlying argument of the Republicans is mean-spirited: rich people’s money is valuable to the economy and not to be taxed, while poor people’s money ‘doesn’t create jobs,’ and therefore fair game.