{"id":6480,"date":"2010-09-22T05:30:28","date_gmt":"2010-09-22T09:30:28","guid":{"rendered":"http:\/\/www.geneveith.com\/?p=6480"},"modified":"2010-09-22T05:30:28","modified_gmt":"2010-09-22T09:30:28","slug":"cut-payroll-taxes","status":"publish","type":"post","link":"https:\/\/www.patheos.com\/blogs\/geneveith\/2010\/09\/cut-payroll-taxes\/","title":{"rendered":"Cut payroll taxes?"},"content":{"rendered":"\n<\/head>

One idea to help the economy\u2013advocated by members of both parties\u2013is \u00a0to cut payroll taxes, that money deducted from your paycheck. \u00a0Here is the case for that from liberal economist Nouriel Roubini:<\/p>\n

A much better option is for the administration to reduce the payroll tax for two years. The reduced labor costs would lead employers to hire more; for employees, the increased take-home pay would boost much-needed economic consumption and advance the still-crucial process of deleveraging households (paying down credit card debt and other legacies of the easy-credit years).<\/p>\n

Most policy approaches, including the Obama proposals, have tended to subsidize the demand for capital rather than the demand for labor. That has the problem backward. In the second quarter, capital spending reached an annual growth rate of 25 percent. The argument that increased demand for capital leads to greater demand for labor (i.e., if you buy more machines you need workers to run them) has not held up. Firms are investing in capital goods, equipment and offshore offices that allow them to produce the same amount of goods with less \u2014 and lower labor costs. To avoid a chronic increase in the unemployment rate, we need to subsidize the demand for labor \u2014 achieving job creation \u2014 rather than making it cheaper to buy capital, as investment and other tax credits would do.<\/p>\n

\nPresident Obama could fully fund the reduction in payroll tax by allowing the Bush tax cuts for people making more than $250,000 a year to expire. Meanwhile, the Bush-era cuts affecting middle- and low-income earners \u2014 the vast majority of Americans \u2014 would remain in place for the time being. . . .\n

To maximize the incentives for private-sector hiring, there should be sharper reductions to the payroll taxes paid by employers than for those paid by employees. This will counter the argument that the higher income taxes funding these payroll tax cuts will hurt the wealthy and small businesses (many of which are run by those same high-income individuals) and their willingness to hire. Moreover, any cut in the payroll tax reduces the costs of operation and labor for all businesses. Other targeted policies that induce smaller banks to lend to small and medium-size businesses may be needed.<\/p>\n

Low-income workers have historically shown a much higher propensity to consume when given extra money, so the payroll tax cut should be designed to provide a larger-percentage break to those on the low end of the income scale compared with the upper middle class.<\/p><\/blockquote>\n

via Nouriel Roubini \u2013 What America needs is a payroll tax cut<\/a>.<\/p><\/div>\n<\/blockquote><\/body><\/html>\n","protected":false},"excerpt":{"rendered":"

One idea to help the economy\u2013advocated by members of both parties\u2013is \u00a0to cut payroll taxes, that money deducted from your paycheck. \u00a0Here is the case for that from liberal economist Nouriel Roubini: A much better option is for the administration to reduce the payroll tax for two years. The reduced labor costs would lead employers […]<\/p>\n","protected":false},"author":1281,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13,19],"tags":[1685],"class_list":["post-6480","post","type-post","status-publish","format-standard","hentry","category-economics","category-government","tag-payroll-taxes"],"yoast_head":"\nCut payroll taxes?<\/title>\n<meta name=\"description\" content=\"One idea to help the economy--advocated by members of both parties--is \u00a0to cut payroll taxes, that money deducted from your paycheck. \u00a0Here is the case\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.patheos.com\/blogs\/geneveith\/2010\/09\/cut-payroll-taxes\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cut payroll taxes?\" \/>\n<meta property=\"og:description\" content=\"One idea to help the economy--advocated by members of both parties--is \u00a0to cut payroll taxes, that money deducted from your paycheck. \u00a0Here is the case\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.patheos.com\/blogs\/geneveith\/2010\/09\/cut-payroll-taxes\/\" \/>\n<meta property=\"og:site_name\" content=\"Cranach\" \/>\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/cranachblog\/\" \/>\n<meta property=\"article:published_time\" content=\"2010-09-22T09:30:28+00:00\" \/>\n<meta name=\"author\" content=\"Gene Veith\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Gene Veith\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/2010\/09\/cut-payroll-taxes\/\",\"url\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/2010\/09\/cut-payroll-taxes\/\",\"name\":\"Cut payroll taxes?\",\"isPartOf\":{\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#website\"},\"datePublished\":\"2010-09-22T09:30:28+00:00\",\"dateModified\":\"2010-09-22T09:30:28+00:00\",\"author\":{\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#\/schema\/person\/f9ca8670bcc51908a78994c0484dbfa1\"},\"description\":\"One idea to help the economy--advocated by members of both parties--is \u00a0to cut payroll taxes, that money deducted from your paycheck. \u00a0Here is the case\",\"breadcrumb\":{\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/2010\/09\/cut-payroll-taxes\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.patheos.com\/blogs\/geneveith\/2010\/09\/cut-payroll-taxes\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/2010\/09\/cut-payroll-taxes\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Cut payroll taxes?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#website\",\"url\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/\",\"name\":\"Cranach\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#\/schema\/person\/f9ca8670bcc51908a78994c0484dbfa1\",\"name\":\"Gene Veith\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.patheos.com\/blogs\/geneveith\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/054d79faea5d476edd8f99e5f14fb17f?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/054d79faea5d476edd8f99e5f14fb17f?s=96&d=mm&r=g\",\"caption\":\"Gene Veith\"},\"description\":\"Gene Edward Veith, Jr. is a writer and retired literature professor, serving as Provost Emeritus at Patrick Henry College. 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