Senator Orrin Hatch doesn’t want to extend the payroll tax cut, which reduced employees’ Social Security contributions from 6.2 percent of taxable wages and salaries to 4.2 percent. If Congress does not continue the payroll tax cut or replace it with a comparably sized temporary tax rebate, declining consumption and related economic activity will decrease employment by almost one million jobs, according to the Economic Policy Institute.
Failure to continue the payroll tax cut would reduce the average family’s disposable income by $920 next year, making another recession more likely. What is Senator Hatch’s explanation for wanting to raise taxes on the middle class? From the Salt Lake Tribune:
“I cannot support extending tax policies that were intended to be temporary and that have proven to be ineffective at creating jobs or stimulating economic growth,” said Hatch, R-Utah.
Interesting. Especially when you consider that the Bush Tax Cuts For The Rich, extended last year by the Democratic Congress, are (1) intended to be temporary and (2) have proven to be ineffective (over an entire decade) at creating jobs or stimulating economic growth. So let’s take Senator Hatch at his word. We have his pledge to vote against any attempt to extend the Bush-Obama Tax Cuts next year. If Congress doesn’t pass another set of tax cuts for the rich, that alone will go most of the way toward solving the long-term deficit problem and reducing the National Debt.
UPDATE: The GOP cannot explain why tax cuts for the rich do not create jobs.
As Center for American Progress Director of Tax and Budget Policy Michael Linden found, “in the past 60 years, job growth has actually been greater in years when the top income tax rate was much higher than it is now.” In fact, “if you ranked each year since 1950 by overall job growth, the top five years would all boast marginal tax rates at 70 percent or higher.” The GOP… simply has no explanation for these facts.