Right Thinking From The Left Coast
You will never live if you are looking for the meaning of life - Albert Camus

Wednesday, December 08, 2010

Tax Deal Site Notes

Two notes on the new tax deal that change things a little bit.  First, McArdle notes that the payroll tax holiday is on the employee side, not the employer side.  This is the wrong to go about it.  Cutting the payroll tax for the employer means more money to hire new employees.  Cutting it for the employee means more spending money and we’ve see, with Stimuli I-III, how well that has worked.  Hopefully, the Republicans can squeeze a bit and maybe get an even split.

Second, I was wondering why the Democrats didn’t just pass the tax cuts for income under $250k using reconciliation and therefore obviate the need to compromise with the Republicans on the tax cuts for the wealthy.  It turns out, they can’t.  The Democrats did not bother to pass a budget this year because they worried about the political fallout (we saw how well that worked out).  You can’t reconcile you haven’t passed.  So if the Republicans were holding middle class tax cuts “hostage”, as our President said yesterday, it’s only because the Democrats left the tax cuts in a crowded street with a sign reading, “Take me hostage!”

And the architect of this brilliant strategy—to both lose the election and fumble the tax policy—was re-elected as Minority Leader.

Posted by Hal_10000 on 12/08/10 at 09:23 AM in Politics   Law, & Economics  • (0) TrackbacksPermalink
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