Bryan Caplan  

We Coulda Had a Payroll Tax Holiday

Austrian Challenge: What Would... Will's Challenge...
Tim Kane wisely notes that we could have had a one-year payroll tax holiday for the cost of Obama's fiscal stimulus program:

What's amazing is that much of the rest of the bill's stimulus does not actually enter the economy until 2010, 2011, 2012 ... you get the idea. Even if you believe in government expenditures as stimulus - and I do not - the timing problem is not solvable.

So guess what else 800 billion dollars could pay for? The total revenues from all payroll taxes in a single year, by eerie coincidence, equals just $800b...
And in other news, if I had a billion dollars for every major missed policy opportunity in the last year, I'd have about $800B, too!

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COMMENTS (3 to date)
John Thacker writes:

You know, Senator McCain's alternative included a payroll tax suspension-- it cut in half the employer portion for one year. It included a few other things, like a corporate tax reduction, and cost $400-$500 billion overall, so it didn't cut the whole thing. But only 40 Senators voted for it.

So McCain's alternative had a payroll tax suspension, a corporate tax rate suspension, and no Buy American. But of course it failed. (And of course he's the one ignorant of economics.)

Gary Rogers writes:

I still contend that every dollar we borrow from overseas to finance the red ink in Washington takes away a dollar that should be targeted toward the purchase of our exports, which translate into jobs. Normally exports and imports will balance themselves, but years of borrowing on our part and lending on the part of other exporting countries, have created a long standing trade imbalance. Imbalances have consequences, and this is one that is too often ignored.

If 25% of our exports are labor and $50,000 is roughly the cost of a job, by doing nothing and not borrowing another $800 billion we could have saved 4 million American jobs.

Prior to this recession, I would have voted for the tax cuts, especially the payroll tax cuts. However, previous plans did not cut spending, causing debts to skyrocket and the Republicans to be ejected from the game. Now our biggest problem is avoiding a sovereign debt crisis.

Larry Peoples, Sr. writes:

The timing of this "stimulus" is meant to coincide with the 2010 congressional election cycle. Liberal, Democrat politicians pandering to the "slacker" groups to secure more votes.

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