January 9, 2003
FLICKING THE THIRD RAIL:
Democrats Signal Major Shift With Bid To Cut Payroll Tax (SEAN HIGGINS, January 9, 2003, INVESTOR'S BUSINESS DAILY)Democrats panned the "growth and jobs" plan President Bush announced Tuesday. One reason: It didn't include a payroll tax reduction, the one tax cut many Democrats are open to.It's an old idea that has drawn new interest from Democrats, especially since the election.
White House wannabe John Kerry, the senator from Massachusetts, has called for it. Sen. Mary Landrieu, D-La., made it a key part of her re-election bid. Sen. John Corzine, D-N.J., says it must be part of any economic recovery package.
The appeal to Democrats is obvious. It is a tax cut that favors the voters Democrats want to reach: middle- and lower-income people.
But it may also signal a political shift. A Democrat-led effort to cut the payroll tax could also break the taboo on reforming Social Security.
That's because the payroll tax is used mainly to fund Social Security benefits. A cut in the tax would cut the revenues flowing into the program.
Democrats have long claimed that any such change would endanger the program. But that's changing.
"It is amazing that they are even talking about it, because in the past the payroll tax has been viewed by them as almost sacred," said David Keating, executive director of the free-market Club for Growth.
A deal that cut payroll taxes, made up the difference from general revenues (with corresponding cuts in government), and created personal accounts, would be an enormous boon to the country and something both parties could be proud of. It would also help make the Bush presidency one of the most significant in our history. We're not holding our breaths. Posted by Orrin Judd at January 9, 2003 5:33 PM
Yeah. This is huge. Good policy could come from the left's demagougery on taxes.
I saw a dem on tv the other day admitting the payroll tax was regressive. I was thinking at the time it was a backdoor to fix SS.
I get a headache trying to follow dem logic. Income taxes can never be cut, because we can't have deficits because we need a surplus to prop up social security, but we can cut the payroll tax, which directly funds social security.
Income tax cuts can't be done because they cause deficits, but new spending is never limited for the same reason.
A scaling back of future scheduled spending increases is a spending cut, but a scaling back or canceling of scheduled tax cuts isn't a tax increase.
The '01 tax cut was a failure in stimulating the economy, and caused a deficit, but the only part that actually happened, the $300. $600 checks, is the only thing we should do to stimulate the economy this time.