In his State of the Union speech the other night President Obama said:
Right now, our most immediate priority is stopping a tax hike on 160 million working Americans while the recovery is still fragile. People cannot afford losing $40 out of each paycheck this year. There are plenty of ways to get this done. So let’s agree right here, right now: No side issues. No drama. Pass the payroll tax cut without delay.
I’m old enough to remember when politicians denied that the FICA deduction from our paychecks is a tax. “It’s a contribution to your future retirement income and medical care,” they’d say. Today they forthrightly call it a tax.
I’m beginning to suspect that politicians will say whatever they think will get them reelected.
As for the idea that cutting the payroll tax is costless, see my earlier post.