Extend the Payroll Tax Cut!

Fiscal Cliff

Does Boehner have to accept a compromise?

Yesterday, I wrote a post arguing that liberals are overestimating the President’s leverage on the fiscal cliff. There were a couple of reasons for this, but the biggest one was that the Republicans were now apparently willing to raise taxes on people earning more than a $1,000,000. Turns out, that’s not true.

House Speaker John Boehner was unable to convince his caucus to pass such a bill. It’s clear now: Tea Party Republicans are never going to vote for a tax increase, even if such a vote would actually avoid raising taxes on the majority of Americans. It’s not going to happen.

President Obama does not have to worry about convincing Americans that Republicans are holding the middle class tax cuts hostage. It’s painfully obvious without him saying so. If we go over the fiscal cliff, the Republicans will be blamed.

In addition, if Boehner wants to avoid going over the cliff, he’s going to need support from lots of House Democrats and that means compromising with Obama.

Either way, Obama now has all the leverage in the negotiations and I’m hoping he uses it.

However, unlike other Democrats, I’m not looking for the President to walk back from his most recent offer. As Ezra Klein wrote earlier today, that’s not entirely an option. It will look bad for Democrats and risk hurting the economy. Instead, the President should demand the inclusion of an extension to the payroll tax cuts.

The economy is still barely recovering and extending the payroll tax cuts will prevent an unnecessary and untimely increase on middle class taxes. According to the Tax Policy Center, it would raise taxes mostly on the bottom 80 percent of households:Pay Roll Tax Cut Expiration

Extending the payroll tax cut will help out these families the most. Now that Obama has the full leverage on the fiscal cliff and isn’t at risk to lose it, it’s time he uses it to help out the middle class. This is the way to do it. (Image via)


3 thoughts on “Extend the Payroll Tax Cut!

  1. Congress and Senate have adopted the idea that “Payroll taxes” are not “Income Taxes”. We need someone to wake up and say any funds collected by the federal, state, or local government that is used to fund our American way of life is a “TAX” (Period). If a production (income) tax is not touchable, why not use a consumption (Sales) tax.

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