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Cut the Payroll Tax

It would be desirable anyway, but if we are talking about how to deal with the unemployment problem, my colleague Mark Bils and coauthors show that:

that cutting the payroll tax by six percentage points (of the 12.4% Social Security component) would, under standard assumptions, increase employment by three million to four million workers—an amount equal to all the job losses since the stimulus was passed.

Read more here. But why would we want to implement a policy that cannot be used to pay off our favored constituents? Why would we want to implement a policy that increases the rewards for work and productivity? What do you think this is, the United States?

2 Responses to “Cut the Payroll Tax”

  1. Harry says:

    Tax something and you get less of it. In today’s paper I read that Harry Reed wants to increase payroll taxes, and also wants to tax investment income with a medicare tax, like 4%. So Harry wants to increase unemployment and drive down the value of your 401-K or whatever you have managed to save. Hidden is his plan to inflate the dollar to a farthing.

    I’m going to read your colleague’s paper later, but I’ll bet money he is right.

    Why is Harry Reed doubling down, when he holds a pair of sixes? My guess is that he has himself, and maybe his family, taken care of.

    Best wishes, Mike. Glad you liked the pic.

    Obama is coming to Allentown tomorrow, I think. I guess he thinks his presence will benefit Arlen Specter. I’m going to call the caddie master to find out if he wants a game, and if we play, I will give him your regards.

  2. Harry says:

    Please convey my best wishes to Mark Bils, your esteemed colleague. I read Michael Boskin’s (and Mark’s!) piece in today’s WSJ, and could not agree more.

    Wintercow’s blog has become cutting edge, or as they said in Isaih’s day, prophetic. I hope Speedmaster appreciates this. I hope your students at Rochester appreciate they are walking among the humbly wise.

    Tell Mark Bils he’s welcome to play golf with me and you, here.

    News Flash: Barack is coming to the Lehigh Valley! He’s coming to Dieruff High School, to trumpet whatever his school program is about, and I’m not going to make a snide comment about that. He’s actually coming in the hope that he can boost congressional candidates for him, slam wascally wepublicans, and help Arlen Specter.

    He’s due to show up December 4, one day shy of being able to attend our choir’s concert.

    Boskin and Bils are right, as, of course, are you, Perfesser Wintercow.

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