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GOP backs a tax hike; Allowing payroll taxes to increase would hit the middle class hardest

Question: When is a tax increase not a tax increase?

Answer: When Republican leaders decide it's not.

Congressional Republicans, who seem to have sworn some kind of blood oath to the preposterously unfair Bush tax cuts -- regardless of the damage they do to the economy -- now want to eliminate the reduction of the payroll tax they helped to enact last year. The reduction in payroll taxes, while it puts additional stress on Social Security, which it funds, is of greatest benefit to the middle class and working poor.

That's because it's a "regressive" tax, taking the same percentage of everyone's pay, regardless of income level. The amount of income subject to the tax is also capped, meaning a portion of the income of higher earners -- sometimes a very large portion -- goes untaxed.

We don't know if that's why Republicans suddenly want to increase those taxes, in particular -- and it is a tax increase, by the Republicans' own definition -- but we do know they oppose raising taxes on wealthy Americans, even when wealthy Americans call for it.

Rep. Jeb Hensarling, R-Texas, put it this way: "It's always a net positive to let taxpayers keep more of what they earn," he said, "but not all tax relief is created equal for the purposes of helping to get the economy moving again." Hensarling is one of the House GOP's leaders. He's wrong on the first part and right on the second -- but for the wrong reason.

It is often, not always, a net positive to let people keep more of what they earn, but when the country has vastly overspent, when budget cuts alone are not going to do the job and when credit rating agencies are lowering the country's rating, then letting all people keep more of their money can be a net negative.

As to the second point, it is plainly true that not all tax cuts will have similar effects on the economy. It is also true that not all tax cuts spread the burden fairly.

The payroll tax is implemented in a way that disadvantages lower-income Americans, while the income tax is graduated, or progressive. Yet Republicans cling to an income tax structure that "coddles" the wealthiest Americans, to use the word recently used by Warren Buffett, one of the country's richest men (and chairman of The Buffalo News).

Buffett last week called on Congress to raise taxes on those earning $1 million and year and raise them even more on those earning more than $10 million. Republicans sneered. Yet only a week later, they are advocating raising taxes on the middle class by ending the payroll tax cut.

Today's brand of Republican is devoted to spending (two wars, the Medicare prescription benefit, tax cuts) without having the integrity to pay for it. The end of the payroll tax won't restore the public's confidence in the economy. A willingness to bring in new revenue by asking the wealthy to pay their share would at least be a step in that direction.

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