A payroll tax cut is the politically most expedient way to shovel money to those who need it least.
As @jasonfurman has noted, a 2% cut would yield $5,508 for a high-income couple, but $500 to a single parent getting by on $25k.
Far better to mail out $2,000 checks to everyone.
As @jasonfurman has noted, a 2% cut would yield $5,508 for a high-income couple, but $500 to a single parent getting by on $25k.
Far better to mail out $2,000 checks to everyone.
Can we afford fiscal stimulus? With real long-term interest rates now clearly negative, we can borrow $1,000 today, and pay back an inflation-adjusted $900 in ten years time.
The other problem with the payroll tax cut?
1. It's slow. It only accrues as you accrue payroll earnings.
2. It only goes to those on payrolls, missing the unemployed.
1. It's slow. It only accrues as you accrue payroll earnings.
2. It only goes to those on payrolls, missing the unemployed.
A payroll tax cut is a bad answer to the question: How best to stimulate the economy?
It's a better response if you already know that the answer to every question is "cut taxes," and you didn't really listen to the question.
It's a better response if you already know that the answer to every question is "cut taxes," and you didn't really listen to the question.
