12/20/2011

Payroll Tax Cut Extension And You

Why would Democrats want the two-month cut instead of the yearlong cut? Because they didn’t want to give the issue up as a political boon. It allowed them to criticize Republicans for hypocritically opposing a tax cut. They settled for Keystone and offsets in exchange for the ability to again bash GOP-ers over their opposition to the tax cut extension two months from now.

The House didn’t want to play along. A study came out to demonstrate that a two-month tax cut would be unworkable, allowing them to focus on the timeframe, rather than the tax cut extension itself. Their game? A two-month tax cut extension is a source of too much uncertainty for taxpayers. That's true, but it's not the central issue.

Here’s the problem: Whether it’s for two months or a year, a payroll tax cut extension is simply bad policy. In the context of comprehensive Social Security reform, it might make sense to tamper with the payroll tax. But as a half-hearted, gimmicky gesture to pander to the middle class, it doesn’t.

Politicians justify their support for bad policies with this defense: “If I don’t support this poor policy, I won’t be reelected because my opponents will use it against me. So, I’m going to support this poor policy so as to be reelected — and, then, I’ll implement sound policy.” But they never quite get around to the sound policy-making.

We have nobody to blame for this phenomenon but ourselves. The problem is not with politicians. It’s that we, the people, want our treats. In this case, it’s the payroll tax cut extension. Sooner or later, we're going to have to sober up and learn that the solutions to our problems lie in personal responsibility. When the American people grow up, we’ll have more responsive government. Think about it.