You all probably know that the last congressional budget free-for-all of 2011 is currently pending as the Democrats begin their push to extend the 2010 payroll tax cuts for another year. The extension, originally one of the provisions of the American Jobs Act that the GOP deep-sixed earlier this year, is being offered as a stand-alone bill and is viewed by many economists as crucial to maintaining even the very slow level of growth that has resulted from Republican intransigence thus far. As the New York Times’ Binyamin Appelbaum puts it:
Economists regard benefits for unemployed workers as among the most effective means of increasing growth because people without jobs tend to spend the money quickly.
According to a Treasury Department document released early today:
Without Congressional action by the end of the 2011 calendar year, the 2 percentage point payroll tax cut the President signed into law will expire. If the payroll tax cut is allowed to expire, taxes will increase substantially for nearly every middle-class working American family, and economic growth and job creation will be significantly slower in 2012 as a result.
To be clear, the payroll tax cut that is being proposed would cut the original 6.2% payroll tax to 3.1%, somewhat more than the 2010 cut which took the tax to 4.2%. It would also reduce employer taxes on the first $5 million in taxable payroll to 3.1% as well. Appelbaum notes that it “could create more than 50,000 jobs a month, a significant boost considering that employment climbed by 35,000 jobs, on average, in each of the last three months.”
The current sticking point? Democrats are proposing to pay for the payroll tax cut extension by levying a 3.25% surtax on income over one million dollars (and remember that we have a bracketed system so only income over a million dollars would be subject to this surtax). Predictably, this sticks in the craw of the GOP, the anointed representatives of the 1%.
So, when our Missouri Senators and Representatives are called on to take a stand one way or the other this week when the vote comes up, what exactly are they contemplating as it affects Missourians? They can vote against the extension, in effect, according to a Treasury Dept. report issued today, voting to increase taxes on 3.1 million Missourians by a synchronous total of 3.1 billion dollars. As the same report notes, due to the structure of the payroll taxes, the increase would mainly hit poor and middle class earners.
And what would extending the payroll tax cut cost? According to a report prepared by Citizens for Tax Justice, a measly .1% of taxpayers or 3,992 millionaires in Missouri would pay the 3.25 surtax on their income over $1 million, a 2.1% increase in their total income tax. Bear in mind that the adjusted gross income of these 3,992 individuals or families amounts to $2,899,000 each. In summary, a small number of people, many of whom have benefited handsomely from our tax-subsidized civic environment, would be asked to pay a very small amount of their income in order to guarantee a level of economic growth that would benefit all of us, themselves included.
One should note that, given the possibly toxic fallout from their position in these days of the Occupy movement, the GOP has been grasping for a way to wiggle out of what increasingly looks like an intellectually indefensible position. They have, reportedly, been making noises about paying for the payroll tax cut extension by cutting the pay of federal employees who already make 26.3% less than their private industry counterparts. As what the DailyKos’ Joan McCarter brands a diversionary tactic, word is that they would couple this cut to middle class salaries with “a means testing plan to limit Medicare and Social Security benefits for those earning more than $1 million a year.” A little Trojan horse here, that would serve to turn what are now publicly maintained insurance policies into the “entitlements” that the GOP wants us to think they are.
It’ll be interesting to see just where the Missouri GOP contingent comes down on the issue of stiffing the working and middle class to preserve the benefits of their wealthy patrons. I hope that I can predict that our Democrats will do the right thing. No matter, I personally know just how I feel about any politician who thinks that I should carry the yacht and caviar set on my back whenever times get hard. I, for one, have had enough of the unnamed class warfare the GOP has been waging against those of us in the 99% over yea these many years.