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View Poll Results: Who should win this argument?
Stop the pay-roll tax cut. 3 37.50%
Continue the pay-roll tax cut. 5 62.50%
Voters: 8. You may not vote on this poll

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Old 08-26-2011, 11:45 AM  
Jenson71 Jenson71 is offline
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When parties "switch" sides: the pay-roll tax

This is kind of interesting, and let's start a poll seeing our own positions on the pay-roll tax cut debate.

http://www.nytimes.com/2011/08/26/us...cs/26dems.html

Quote:
For Some in G.O.P., a Tax Cut Not Worth Embracing
By JENNIFER STEINHAUER

WASHINGTON — It is hard to find a tax cut that Congressional Republicans dislike. Unless it is a tax cut pushed by President Obama.

In a turning of the tax policy tables, Democrats are increasingly hammering on Republicans who oppose the president’s proposal to extend for a year a payroll tax cut passed last year with bipartisan support.

That tax cut — which reduces workers’ contributions to Social Security this year to 4.2 percent of wages, from 6.2 percent — expires in December. The White House would like to extend it for another year. But Republicans in Congress are balking, arguing that such a cut adds needlessly to the nation’s budget deficit, and should be replaced with an overhaul of tax policy instead.

“All tax relief is not created equal,” said Brad Dayspring, a spokesman for Representative Eric Cantor of Virginia, the House majority leader. “If the goal is job creation, Leader Cantor has long believed that there are better ways to grow the economy and create jobs than temporary payroll tax relief.”

After battles over the debt ceiling and tax policy, in which Republicans asserted that they would abide no tax increase, Democrats are equal parts incensed by this nuanced policy position and pleased with the opportunity to bang the other party over the head with it.

“One way or another, there will be a vote on extending these tax cuts,” said Senator Charles E. Schumer of New York, the third-ranking Senate Democrat, “and Republicans will have to stand up to the fact if they oppose it they are for tax cuts for the rich but not for the middle class.”

Lower- and middle-income workers are the greatest beneficiaries of the tax cut. The cut resulted in $67.2 billion of lost revenue for Social Security in 2011 and a total cost of $111.7 billion spread over 10 years. The rate will return to previous levels on Jan. 1 if Congress does not extend the cut.

Mr. Obama, whose administration is also mulling a similar tax cut for employers, has repeatedly cited the payroll tax as a cornerstone of his economic agenda “We can cut payroll taxes again,” he said last weekend in his weekly public address, “so families have an extra $1,000 to spend.”

The Republican candidates for president, all of whom have taken strong antitax positions, are eager not to be jammed on the issue. “I think the payroll tax cut is a good thing,” Jon M. Huntsman Jr., the former Utah governor, said in an interview with PBS on Thursday morning. “It helps a whole lot of people,” he added, saying he “would consider extending it.”

Mitt Romney, the former governor of Massachusetts, last year wrote in an opinion article for USA Today that the payroll tax cut “will add to the deficit.” But in a recent interview with Fox TV, he softened that, saying, “I’m all in favor of keeping taxes down and keeping burdens down on American businesses and employers.”

While the tax cut is almost certain to become a bargaining chip this year among the members of a special Congressional committee charged with reducing the deficit by up to $1.5 trillion, Mr. Schumer said the Senate might vote on the matter, forcing Republicans to choose whether to vote against lower taxes.

A spokesman for Grover Norquist, who as leader of Americans for Tax Reform is the author of a no-tax-increase pledge that scores of Congressional Republicans have signed, expressed ambivalence about the cut.

“One could argue that therefore allowing it to lapse was not a tax hike,” said John Kartch, a spokesman for the group. “But safer to either continue the lower rate or cut some other tax rate by the same total amount so that any change was revenue neutral.”

Democrats note that Republicans had no problem extending the so-called Bush tax cuts of 2001, even though those cuts were also originally designated as temporary.

“This seems to be one of those situations where, since Obama says yes, we say no,” Representative Chris Van Hollen, a Democrat from Maryland who is a member of the special committee, said of Republicans. “It doesn’t make sense in any other context.”

Economists are divided about the payroll tax cut extension. Some liberals fear that using general fund money to cover the lost revenue for Social Security puts the program at risk of turning into a welfare-like program rather than an entitlement program supported by payroll taxes.

Others believe, however, that the tax is simply regressive.

Republicans argue that the tax cut robs Social Security of money without providing job growth or other benefits of a broader tax policy overhaul.

“Clearly it puts money in people’s pockets, and that’s good,” said Sage Eastman, a spokesman for Representative Dave Camp of Michigan, a Republican member of the special committee. “But it doesn’t have impact on growing the economy and creating jobs, and that’s what our tax policy reform ought to be focused on.”

Michael D. Shear and Carl Hulse contributed reporting.
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Old 08-26-2011, 11:58 AM   #2
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Theres no way the Republicans will vote to increase the payroll tax. It would increase the taxes of the average worker by $1000 next year when the recovery is weak enough already. I know they don't want to do anything that looks like a compromise with Obama, but they simply can't completely reverse themselves like this.
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Old 08-26-2011, 12:20 PM   #3
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If I understand the article correctly, failing to extend a temporary tax cut = tax increase?
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Old 08-26-2011, 12:22 PM   #4
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Quote:
Originally Posted by trndobrd View Post
If I understand the article correctly, failing to extend a temporary tax cut = tax increase?
Settle down. I don't think the article is saying that Republicans are threatening to increase taxes.
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Old 08-26-2011, 12:26 PM   #5
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Quote:
Originally Posted by trndobrd View Post
If I understand the article correctly, failing to extend a temporary tax cut = tax increase?
Its just a matter of semantics. But the Republicans have been arguing for years, and will continue to argue in the next year, that allowing the Bush tax cuts to expire on time constitutes a tax increase. So when they vote to let the payroll tax cut to expire on time, their same logic is going to bite them.
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Old 08-26-2011, 12:30 PM   #6
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Here's another good summary of the Republican's puzzling reversal:

Quote:
Do Republicans really oppose temporary tax cuts, or just Obama’s tax cuts?

In recent weeks, the politics of taxes seem to have flipped. Now it’s Democrats calling for the extension of a tax cut and Republicans arguing for a tax increase.

The tax cut in question, of course, is the payroll tax cut, which adds about $1,000 to the paycheck of the average American and which is set to expire at the end of this year. Republicans who were willing to let the federal government default on its debt to prevent even a hint of a tax increase are now willing to permit a $120 billion tax increase for next year. The question is, why?

One possible answer is that a large tax increase in an election year is good for them because it’s bad for President Obama and the economy. But that’s a pretty cynical explanation. Another is that they care more about tax rates on the rich than they do about tax rates on the poor. But they resist that argument. The real answer, Republicans says, is that they just don’t like temporary tax cuts.

”We don’t need short-term gestures,” explained Sen. Lamar Alexander. “Temporary tax rebates don’t work to create economic growth,” said Rep. Paul Ryan. Brad Dayspring, the spokesman for House Majority Leader Eric Cantor, says his boss “has never believed that this type of temporary tax relief is the best way to grow the economy.”

But as Jon Chait noted, Republicans proposed and passed temporary tax cuts in 2001 and 2008. Ryan voted for both packages. So did Cantor. And Alexander. So the GOP seemed to believe in temporary tax cuts when George W. Bush was president.

They continued to believe in them once Obama became president. In 2009, Senate Republicans proposed a a variety of alternatives to Obama’s stimulus proposal. One, authored by Sen. Jim DeMint, was a permanent tax cut that would have cost more than $3 trillion. But another, authored by Sen. John McCain, was a one-year cut to payroll and income taxes. Every Senate Republican -- including Lamar Alexander -- voted for it. Mark Hemingway, a reporter at the conservative National Review, backed them up. “Republicans and conservatives have been banging the drum for payroll tax cuts as an economic stimulus for months,” he wrote.

And Republican support for temporary tax cuts has not been limited to stimulus measures. In 2001, the GOP passed the Bush tax cuts through the reconciliation process, which meant they had to make them temporary. That’s why they were set to expire in 2010. Republicans then preferred a two-year -- that is to say, very temporary -- extension of all of the cuts to the Obama administration’s offer to make all of the cuts for income under $250,000 permanent.

In other words, Republicans have frequently fought for temporary tax cuts. When offered the choice between a larger temporary tax cut and a smaller permanent tax cut, as happened in 2001 and 2003 and 2010, they have opted for the temporary tax cut. Now that Obama has come to endorse a temporary tax cut, they have stopped supporting it -- a pattern we’ve seen on many other issues, as well. But the idea that the party has had some steady, policy-based objection to temporary tax cuts just doesn’t fit the record.
http://www.washingtonpost.com/blogs/...html#pagebreak
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Old 08-26-2011, 02:39 PM   #7
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Is this the tax that is paid towards SS? The one that is like a million trillion zillion in the red?
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Old 08-26-2011, 03:17 PM   #8
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Quote:
Originally Posted by trndobrd View Post
If I understand the article correctly, failing to extend a temporary tax cut = tax increase?

Isn't that what the Republicans always argue when it comes to the Bush tax cuts?
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Old 08-26-2011, 03:19 PM   #9
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Quote:
Originally Posted by mlyonsd View Post
Is this the tax that is paid towards SS?
Yes


Quote:
The one that is like a million trillion zillion in the red?

err...no. Not currently anyway. It recently went into the red after being in the black for many years, such that the general treasury (which took loans from the SSA surplus to pay general expenditures of the government) owes the SSA a million trillion zillion.
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Old 08-26-2011, 03:44 PM   #10
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Quote:
Originally Posted by Amnorix View Post
Isn't that what the Republicans always argue when it comes to the Bush tax cuts?

Yes. And Liberals argue just as vehemently that allowing the tax cuts expire would not be a tax increase. But now that we all agree that allowing tax cuts to expire is a tax increase, I'm certain the Republicans will support a permanent reduction of the payroll tax.
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Old 08-26-2011, 03:50 PM   #11
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Quote:
Originally Posted by Amnorix View Post
Yes





err...no. Not currently anyway. It recently went into the red after being in the black for many years, such that the general treasury (which took loans from the SSA surplus to pay general expenditures of the government) owes the SSA a million trillion zillion.
Sounds like a dumb thing to cut in the first place.
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Old 08-26-2011, 03:56 PM   #12
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" Democrats are increasingly hammering on Republicans who oppose the president’s proposal"

Why can't I seem to find anyone mentioned in this article that says they will vote against extending these? Is that not what this is all about? Shouldn't there be at least 2 so we could use the Plural of Republican? It is a really big streatch to take somone that wants larger permant cuts and try a twist that in this manner.

In short this bit of reporting belongs in the Epic Fail thread.
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Old 08-26-2011, 04:19 PM   #13
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Quote:
Originally Posted by FishingRod View Post
" Democrats are increasingly hammering on Republicans who oppose the president’s proposal"

Why can't I seem to find anyone mentioned in this article that says they will vote against extending these? Is that not what this is all about? Shouldn't there be at least 2 so we could use the Plural of Republican? It is a really big streatch to take somone that wants larger permant cuts and try a twist that in this manner.

In short this bit of reporting belongs in the Epic Fail thread.
I guess it's just implied that Cantor and Camp are against it. And Cantor's in a pretty influential position.
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Old 08-26-2011, 06:14 PM   #14
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Quote:
Originally Posted by Amnorix View Post
Isn't that what the Republicans always argue when it comes to the Bush tax cuts?
Yes, and in this case I would argue the same. If this does not go through, taxes will increase. Therefore, it is a tax increase.
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Old 08-26-2011, 06:49 PM   #15
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It was a stupid cut to begin with, never should have been done and needs to go away ASAP.
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