What Does the GOP Really Care About?

by Will on October 5, 2010

I’ve been thinking for a couple months that a temporary cut in Payroll Taxes was probably the path of least resistance for getting some immediate, further stimulus. It’s not the policy I would most prefer: aid to state and local governments would be better, and public works would be much better. But I thought no Republicans would agree to those policies, while some would agree to cut taxes.

I thought that because Republicans have been saying since the Panic of 2008, and really for as long as I can remember, that it was vital to cut taxes immediately. Whatever the problem is, their solution seems to be to cut taxes. So I assume that if the leadership proposed a Payroll Tax holiday, and went on TV saying “we want an immediate tax cut for all American businesses and all working people,” at least a few Republicans in a few tight races might have to go along and vote for the tax cut. I didn’t think they could have the chutzpah to oppose something they’d ostensibly been calling for.

But it turns out I overestimated the Republicans’ desire not to look like hypocrites:

The scale of the cynicism here is pretty spectacular. Republicans don’t support payroll tax cuts because it would increase the deficit, but they do support extending Bush’s tax cuts on the rich because, you know, cutting taxes is really important during a recession. The effect on the deficit, needless to say, is about the same for both proposals.

I think its pretty obvious that if you give people with less money a 5 percent tax cut on their wages, and also give businesses a 5 percent cut in labor expenses, they’re going to be more likely to spend it right away (rather than hiding it in a bank account or a low-risk asset) than the high-income beneficiaries of the Bush tax cuts. And sure, half the benefit of a Payroll Tax cut would go to wage-earners whom Republicans scorn, but half would go to the businesses they claim to love!

We’re screwed.

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