The latest attempt by Congress to wrestle the high unemployment rate is the HIRE Act, which is little more than a tax holiday for companies who hire additional workers. Even if this Act works as intended and encourages businesses to hire more workers, which in and of itself is not a guarantee, then other measures undertaken by the Obama Administration have the opposite effect, by actually stifling hiring by business. Some of the measures that counteract intentions of the HIRE Act are the minimum wage increases of the last few …
The White House recently released President Obama’s health care reform proposal. The plan incorporates a mixture of the many tax increases passed by the House and Senate, hiking taxes by almost $750 billion over ten years. This is on top of $1.3 trillion in other tax increases the President recently proposed in his 2011 budget. Not that there is ever a good time to raise taxes, but doing so as the economy is still emerging from a deep recession is particularly ill-advised and will likely prolong full recovery. Moreover, the …
The health care plan President Obama recently released is mostly a combination of the different plans passed by the House of Representatives and the Senate. But in one major way it breaks with long-standing precedent, proposing a fundamental wrong-headed change to both entitlement policy and tax policy. He proposes for the first time to tax capital income to support entitlement programs. Payroll taxes have always applied just to wages and salaries and the revenue those taxes raise has gone solely to pay for entitlements like Social Security and Medicare. The …
Despite efforts by Senator Baucus (D-MT) and Senator Grassley (R-IA) to draft a broad and bi-partisan federal legislation as part of another round of federal “stimulus” Senator Reid (D-NV) has now derailed the endeavor. After eliminating most of the tax cuts in the bi-partisan effort put forward by Senators Baucus and Grassley, one of the few “tax cuts” Senator Reid has retained is the payroll tax holiday plan. What is the Payroll Tax Holiday? Sec. 101 of the Hiring Incentives to Restore Employment (HIRE) Act outlines a suspension during 2010 …
As President Obama continues campaigning for yet another round of stimulus it appears now that even democrats are beginning to question the soundness of this strategy. This new focus includes a $5,000 tax credit—among other items— for any business that hires a new worker—effective the year the legislation is passed. Of course, the intended effect of this new policy may win some political points for the President and legislators, yet this effect does not override the fact that this maneuver is simply bad economic policy. Creating a tax credit for …
One of the main arguments President Barack Obama and other Democrats have made on behalf of the health care bills that have passed the House and the Senate is that they would reduce the federal budget deficit in the coming decade and in the years following as well. Their claim is backed up by the official cost estimates provided by the Congressional Budget Office that show modest improvements in the budget outlook through 2019 if the bills become law. But there are important reasons to be very skeptical that a …
In order to pay for a massive health care bill (H.R. 3590), Majority Leader Harry Reid (D-NV) creates a host of new taxes. These taxes will total $370.2 billion in the next ten years, and many of the taxes will start being collected in 2010, even as the economy continues to struggle. The most shocking tax increase is a payroll tax increase that will permanently sever the link between the Medicare Payroll tax and its contributions to Medicare. This payroll tax increase of .5% on earnings above $200,000 for singles …
Barack Obama argues that his tax rebates, many of which will go to households paying no income tax will “offset the payroll tax they pay,” and are, therefore, not welfare. But there are two big problems with this line of argument. First of all, Social Security taxes (the main part of payroll taxes, constituting 6.2% out of the total 7.65%) are supposed to go in a special social security trust fund. The program is supposed to play the role of a retirement investment fund, except that some of the wealthier …
We’ve never met Al Gore. So how do we know he is racist? Because the Washington Post’s Harold Meyerson told us so. Remember Al Gore wants to save Social Security and Medicare by putting all payroll taxes in a “iron-clad lockbox where the politicians can’t touch them.” How is this racist? Meyerson opines today: Welfare was pretty much abolished in the mid-1990s, of course, but an increasingly desperate John McCain is transporting us back to the wedge issues of yesteryear. To do so, he is accusing Barack Obama of bringing …
