• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • What About the Payroll Tax, Mr. President?

    Finally, President Obama has awakened to at least a part of Taxmageddon as it barrels down on American taxpayers next year and drags down job growth this year. Was he previously unaware of it? Did he just decide it matters, given the recent pattern of weak job growth?

    So the debate is joined. House Republicans initiated the debate by announcing a vote to extend all the tax policies from 2001 and 2003. Now the President has spoken, which is new, and proposed to extend the tax policies for some and raise taxes on others, which is old hat.

    Senate Majority Leader Harry Reid (D–NV) apparently heard the same alarm clock, as he quickly reacted by announcing a July vote in the Senate, as well—so much for the conventional wisdom that nothing happens until the lame duck session after the election.

    Obama says this is no time to raise taxes on struggling middle-class families. Certainly can’t disagree there. Middle-class families are struggling—struggling to find jobs, struggling with pitiful wage gains if they have a job, struggling to stay in their homes, struggling to rebuild their savings.

    Also old hat is that, in the face of an economy struggling to create jobs, Obama wants to raise taxes on—you guessed it—job creators. This is a case in point demonstrating that the President has no concept whatsoever of how a private economy works.

    Let’s keep this simple:

    • Raises taxes on energy, and you get less energy production. Obama seems to get this one—but only because it aligns with his environmental agenda.
    • Compel people to buy health insurance by threatening higher taxes if they fail to comply. Obama gets this, too, but only because it fits with his agenda of government-based health care.
    • Raise taxes on job creators and get—trick question: more or less?—job creation.

    So Obama says he at least doesn’t want to raise income taxes on middle-class families. Where’s his call to prevent a second massive tax hike on the middle class? Where’s his call to prevent a two-percentage-point increase in the payroll tax on January 1? For a family making $50,000, that’s a $1,000 tax hike. It may not sound like much to the “wealthiest Americans, folks like myself” as Obama riffed, but $1,000 is a lot of money to a middle-class family.

    In 2011 and in 2012, President Obama made a big deal demanding that congressional Republicans cooperate in preventing the same payroll tax jump then. What’s changed? Certainly not the unemployment rate, and certainly not the state of family finances.

    Was the payroll tax cut particularly good policy when Obama first proposed it? No. Did it help the economy? Not particularly. Then why extend it? Because that family needs that $1,000 in payroll tax relief.

    This payroll tax hike is a big part of Taxmageddon. Obama and Congress both need to hear this alarm clock, wake up, and get busy avoiding a payroll tax hike insult to the middle class’s injuries of stagnant wages and high unemployment.

    Posted in Featured [slideshow_deploy]

    10 Responses to What About the Payroll Tax, Mr. President?

    1. Bobbie says:

      if he doesn't get what he wants from where he wants and when he wants it, he'll try to pull the wool over everyone and take it from other places while he continues to push for what he wants, from where he wants and when he wants it.

      Can you imagine America(ns) under a Barack President with American principles? America would stand tall and beautiful with all the worlds people keeping her dignity strong and healthy!
      i like to think about that once in awhile knowing any sign of it today would be insincere as the little bit of Obama's history combined with his authoritative, unconstitutional acts, shows his truth…

    2. Steve Roesch says:

      The payroll tax is what funds social security, which is already going broke. Keeping this tax cut in place will just cause a bigger problem tomorrow. Unless we cut spending, we will all be paying higher taxes to keep social security, Medicare, Medicaid and Obamacare afloat.

      • Bobbie says:

        Social security is broke because of mismanagement. Not the revenue it obtains. Think about the increase population with immigrants. There's no shortage of tax dollars. Keeping tax cuts in place (letting people keep more of the money they earn) disciplines less spending from the government and directs the government to focus on priorities. Social security one of them. The problems consist of insubordination on all accounts. Fraud, corruption in most all government controlled entities where accountability is short lived if lived at all. Free market holds accountability. The less to zero domestic regard government authority has on us the more we are to ourselves and each other. Obama care needs to drown! You need help? If you look you'll find it in your fellow Americans.

    3. Pingback: What About the Payroll Tax, Mr. President?

    4. Here is the perfect opportunity for the House to attach a full repeal of Obamacare to the tax extension. It's a must pass so the Senate will have to go along. Obozo won't have a choice. Keep in mind that the original Obamacare bill was inserted, in toto into an unrelated bill in the Senate in order to pass it by reconciliation. Now is the perfect time unlike yesterdays worthless stunt vote.

      • Norma says:

        What's to keep Big O from signing into law a "line item veto" by executive order, and then just deleting parts of the bill he doesn't like??? Please do not tell me he does NOT have the authority to do that because I have lost count of the number of things he has done things that are NOT legal!! At least until after the election, he holds 2/3 of the power of our government in the palm of his hand so who has the ability to stop him if he decides to use the power of the pen one more time. He apparently has signing executive orders down to perfection now . . . so much so that apparently we can just do away with the House and the Senate! Nothing would please this man more than to be the dictator-in-chief of the largest single country in the world!

        Every single day, just when I when I am positive that this administration cannot think of doing another outrageous thing, they prove me wrong. I am starting to think that if we ever return to a "normal" operation of our government, we will all collapse into a coma! God have mercy upon us because at this point, I am wondering if we can indeed save ourselves from a horrible demise.

    5. Meredith G says:

      How this was allowed to stand is beyond me, and many others). When Obama said he would not raise taxes and was adamant that Obamacare was not a tax, how could Roberts vote the other way. Me thinks that something else stinks up there. There is plenty to be worried about within this bill and I cannot believe that anyone, putting themselves in the worse case medical situation, could not think, "Is this the type of medical care I would want?"

    6. mike swann says:

      O is a liar, thief. He has lied , let others take the blame for his mistakes. He has hurt the small busisness man. What he cannot destruct, his EPA puts mandates on employers,they think are hurting the air. Pennsylvania has created jobs with shale gas on private land, so EPA put some taxes on them. If anyone cares to do the resesarc, EPA are anti-American as O and his Demo senate, czars.

    7. guest says:

      Seems to me alota folks want "free" stuff, from food to health care. This guy is doing his best to make those folks feel like they are getting something for nothing.

    8. Tim Mann says:

      What ever happened to the republicans having an “adult conversation” with the american people about what it is going to take to fix this financial mess we are all in. (Public employees excluded as their financial situation is just fine) When will polititions learn that we want someone to speak the truth and are smart enough to understand there are difficult choises to be made..

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×