Catching the headline on Politico, it looks like the 2-month extension of America’s 2% general tax holiday has been thrown into question by the Republicans in the House of Representatives.
The Republican Congress has been a disaster all year, so I suppose this should be no surprise. The hardcore Tea Party types do not want to go along with the deal cut in the Senate, which passed on a vote something like 89 to 10.
Let me take a moment to frame this one out: the idea is, if you can boost the take home pay of the under $100,000-a-year worker–which is most of America–by a couple of percent, this money will be spent into the American economy. (The alternate theory is that it’s just more money to piss away on imports from China or elsewhere, but I think that activity would be going on regardless of whether people have the extra 2%.)
In the first year of the Bad Times (2009-present), the Obama Administration proposed the Making Work Pay Credit (MWPC), which basically was a $400 grant from the U.S. treasury to anyone that went and earned $6,450. It was modeled on the idea of a payroll tax holiday for the first $6,450 of social security wages, but the way the law was written, it basically should have gone to anyone with that amount in earned income, subject to a phase out at $75,000.
(You know, this is a bitter point with me, because someone at the IRS decided to cut overseas Americans out of the MWPC. Go back and search my old posts on this–there are about seven.)
So when you consider that the present tax holiday has a precursor in the Making Work Pay Credit—and even that was inspired by the one year “Recovery Rebate Credit” in 2008—you see that we have been operating in a situation where Congress has been giving this boost to the everyday worker for the last four years (2008, 2009, 2010, 2011). Now, the G.O.P. proposes to take it away. Replaced by: NOTHING.
I don’t think that taxes should be raised on the working and middle class until the jobs recession is over, and the American recovery is well under way. It will be interesting to see what the several Pennsylvania Republicans in the state delegation have to say about this.
Hoofin 