Payroll Tax Cut Extension and Jobs

The Republicans and Democrats in DC are bickering over the extension of the payroll tax cut that was enacted for this current year.  While both sides say they want to extend the tax cuts, the Democrats want to expand it further and "pay" for it by putting a "surcharge" of 3.25% on people making over a million dollars.

Most of the Republicans are full of it, but they are refusing to blatantly raise taxes as they know what happened to George H. W. Bush in 1992 after he broke his pledge of "no new taxes".  Meanwhile, the Democrats do not hide their socialism and class warfare as they want to increase income taxes on high-income earners.

As the article linked to above says, Harry Reid said that Republican opponents "insist on helping the very wealthy while turning their back on the middle class."  Ok, if Reid were talking about Republicans bailing out banks or giving big contracts to military companies, then he might have a point.  But Reid is talking about not raising taxes on high income earners.  So Harry, for anyone who does not believe that the already high income taxes on high-income earners should be raised, you consider that helping the wealthy at the expense of the poor?

Of course, never in a million years could the Democrats advocate something without "raising taxes on the rich".  Never could they actually come up with something to cut out of the budget.  They really are a bunch of socialists, but that in no way should imply that the Republicans are any good (with the exception of a very few like Ron Paul).

If I were in Congress, I would vote to extend the payroll tax cut.  However, I would vote "no" if it meant raising any other taxes (unless those taxes were specifically for members of Congress).  While spending should be cut dramatically, I think that any tax cut we can get, we should take.  It is just allowing us to keep a little bit more of our earnings.

As far as helping unemployment, this won't really do much.  As I have said before, if they really wanted to help create jobs and lower unemployment, then the tax cut would be for the employer portion of the payroll tax.  By cutting taxes for employees, it gives a raise to people who are currently employed.  It will only marginally help those unemployed if it doesn't actually hurt them.  If taxes were cut for employers, it would decrease the cost of hiring labor and there would be some net improvement in employment on the margin.

If the Democrats got what they are advocating, it would just hurt the economy more.  It would mean less money on the margin for high-income earners, who are often the employers.

All of this talk is more class warfare by the Democrats and more posturing by the Republicans.  Neither side is advocating any significant cuts in spending, which is really what we need.  This economy will not have a sustainable recovery until government spending is cut dramatically.