OPINION: The Payroll Tax Cut Fallacy

Raising people’s taxes is a bad idea, especially in a down economy. But making tax cuts temporary does very little good.

President Obama wants to renew what he calls payroll tax relief—as a one-year tax holiday. Certainly most working people can use the thousand dollars a year he’s talking about, for one year, but it won’t fix America’s major problems with unemployment.

Payroll taxes is a misleading term for describing contributions to Social Security. If workers don’t pay into Social Security, then government borrows the money to provide retirement checks. In other words, Obama’s favored version of lower taxes comes at the price of making Social Security even more unstable than it already is.

It’s one thing for households to get money to pay down debt or buy what they need; but let’s not pretend that this will get America back to work.

From The Heritage Foundation, I’m Ernest Istook.

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