Payroll Tax Holiday is no Tax Holiday

By Douglas V. Gibbs

We keep hearing all of this news about the Federal Payroll Tax Holiday and how the Republicans were recently demanding it be for a year, but the Democrats took off on Christmas Vacation, so the extension remained at two months. President Obama then blamed Congress for not doing their job, hammered the Republicans for (insert any of the lies here), and somehow Obama came out of it looking like the guy wanting tax cuts for the middle class, and the GOP looked like the anti-worker party.

Now, the couple of months is up, and they are fighting again. The Republicans indicated that if this Federal Payroll Tax Holiday was going to be extended, it needs to be paid for with spending cuts elsewhere in the budget.  Democrats countered with their usual, "We need to soak the rich in confiscatory taxes to pay for it."

The House Republicans are now coming to a point where they may be willing to compromise (which usually means conceding while the Democrats lose nothing) and allow the Federal Payroll Tax Holiday to be extended to the end of the year without spending cuts enacted to pay for it.  After all, the GOP figures, if they fight it out again, the Democrats will find yet another way to make the Republicans look like the bad guys, and that is the last thing they want to do during an election season.

My, my, how quickly the establishment Republicans toss aside their so-called principles.

Before I go on, I want you to understand that the whole premise of this thing is rot-gut.  The government has never been at risk of shutting down if the borrowing ceiling isn't raised or they are not allowed to spend even more of our precious taxpayer dollars, but the GOP establishment falls for the threat every time anyway; and the Federal Payroll Tax Holiday is not a tax break no matter how the liberal left establishment pukes spin it.

It is amazing how the media and politicians keep calling the Payroll Break a tax cut because it is nothing of the sort.  The funding they are cutting from your loss column of your paycheck is monies that goes to things like the Social Security program. In other words, they are not cutting taxes, they are cutting funding to programs they claim are starving for funds.

Why are these programs starving for funds?

Social Security, Medicare, and other entitlements like these are very different from entitlement programs like Food Stamps, and other welfare programs.  Social Security, for example, was supposed to be set up as separate accounts that took money from your check and returned it to you by the time you needed it at retirement.  However, since Social Security was running surpluses in the 1950s, the accounts were raided to pay for other usually unnecessary and unconstitutional federal expenditures.  These raiders of the lost accounts then came up with other uses for social security funds, like disability payment programs, and so forth.  Now, the work force has not kept up with the growing crowd of retired workers, and more and more funding is needed to pay the promised Social Security benefits.  Since the accounts no longer exist for all intensive purposes, the government scrambles to gather funding from current workers to pay the benefits of these people that no longer contribute.  Now, as a political ploy, these same politicians have come up with this Federal Payroll Tax Holiday, which is not a tax holiday, but simply a reduction in the money being deducted from paychecks for things like Social Security.

With already not enough money coming in from workers to pay current Social Security benefits, the money must be pulled from elsewhere.  The problem is, there is no other place to pull the funds from.  Yet, this administration is increasing spending, increasing borrowing, and is refusing to cut spending as the Republicans are calling for. . . as they continue to keep reduced the amount deducted from your paychecks as payroll deductions.

All the while this is going on, the Democrats are also calling for an increase in taxes.  "But don't worry," they tell you, "this call for taxes is only against them rich people, so that they pay their fair share."

- Remember that 0.1% of the richest Americans pay more in taxes than the bottom 80%

- Remember that the Federal Income Tax, created by the 16th Amendment in 1913, was designed only to soak the rich. However, as with any tax, it was eventually extended to everyone else. In the case of the Federal Income Tax, it happened during the 1930s, when the politicians claimed they needed more taxes for the purpose of saving us from the Great Depression.  The tax became a payroll tax at the time, and though it was promised as being only temporary, the Federal Income Tax remains with us to this day. By the way, after they extended the tax to everyone, the depression in the United States worsened.

- Remember that the wealthy folk that the government says they are going after so that they pay their fair share tend to be the producers of society.  The wealthiest Americans tend to be the job creators of society.  The wealthiest Americans tend to be the business owners, the producers of goods, and the providers of services.  What this means is that they actually won't be paying the increase in taxes. You will.  The increased taxes will be seen as added expenses, and they will do as they do with any added expense, and move it on down the line to the consumer.  Prices will go up, the quality of the products will go down, or similar tactics.  Employees will be let go, as the producers work to reduce production costs.  Any tax against the rich is always an indirect tax against the rest of America.

The increase of taxes against the rich also plays another role. It makes it more difficult to get a new business off the ground, makes it harder to stay in business, and makes it near impossible to expand - all of which are not good for economic growth.

Washington is doing all of this gambling and poking and prodding with your tax dollars as they also work to implement the very expensive, very unconstitutional, and very authoritarian, Health Care Law. . . a.k.a. Obamacare.

The Republicans, however, are unwilling to say it like it is, or stand up to the Democrats, or demand spending cuts before agreeing to the extension of the Payroll Deduction Decrease. Why? Because as spineless House Speaker John A. Boehner (R-Ohio) put it, the GOP is worried that if they did they would be held responsible for the "tax increase" on 160 million workers that would happen if the "tax holiday" were not extended.

After weeks of negotiations it was the Republicans, like usual, that backed down.

“Because the president and Senate Democratic leaders have not allowed their conferees to support a responsible bipartisan agreement, today House Republicans will introduce a backup plan that would simply extend the payroll tax holiday for the remainder of the year while the conference negotiations continue,” Boehner, House Majority Leader Eric Cantor (R-Va.) and House Majority Whip Kevin McCarthy (R-Calif.) said in a joint statement.

Wimps.

In the mix the Democrats want to extend unemployment benefits again, as well, so that they can buy off more voters with government dependency programs.

As for the liberal claim by people like Obama that the $40 bucks or so a month in our pockets will encourage the economy, to be honest, the roughly extra dollar-thirty in my paycheck a day will do nothing of the sort. It is simply a ploy for reelection, and the democrats are hoping the American voters are stupid enough to fall for their lies - again.

Of course if you'll believe Obama, you'll even think that not raising taxes is a form of increasing spending. Remember, they don't think that is your money. They think it is theirs, and they just let you have it for a little while at a time.  In the end, however, they fully believe that you will pay the piper, and they are the ones serving in that role.

-- Political Pistachio Conservative News and Commentary

House Republican leaders agree to payroll tax holiday extension without offsets - Washington Post

Obama: Not Raising Taxes Is a Form of Government Spending - CNS News

Top 0.1 Percent Pays More Income Tax than Bottom 80 Percent - Weekly Standard

NRSTA - Virginia Chapter: History of the 16th Amendment - Scrap The Code