— Republicans are opposing a tax break extension sought by President Barack Obama and say their stand is consistent with their goal of long-term tax policies that will spur employment and lend greater certainty to the economy.

“It’s always a net positive to let taxpayers keep more of what they earn,” says Rep. Jeb Hensarling, “but not all tax relief is created equal for the purposes of helping to get the economy moving again.” The Texas lawmaker is on the House GOP leadership team.

The debate is likely to boil up in coming weeks as a special bipartisan committee seeks big deficit reductions and weighs which tax cuts are sacrosanct.

At issue is a tax that the vast majority of workers pay, but many don’t recognize because they don’t read, or don’t understand their pay stubs. Workers normally pay 6.2 percent of their wages toward a tax designated for Social Security. Their employer pays an equal amount, for a total of 12.4 percent per worker.

As part of a bipartisan spending deal last December, Congress approved Obama’s request to reduce the workers’ share to 4.2 percent for one year; employers’ rate did not change. Obama wants Congress to extend the reduction for an additional year. If not, the rate will return to 6.2 percent on Jan. 1.

Obama cited the payroll tax in his weekend radio and Internet address recently, when he urged Congress to work together on measures that help the economy and create jobs.

“There are things we can do right now that will mean more customers for businesses and more jobs across the country. We can cut payroll taxes again, so families have an extra $1,000 to spend,” he said.

His push to cut payroll taxes for another year spurred an editorial by The Wall Street Journal.

The Journal’s editorial was met with a flurry of disagreement from columnists, including this one from the Washington Post’s Harold Meyerson:

 

Raising taxes on middle class and working poor

America’s presumably anti-tax party wants to raise your taxes. Come January, the Republicans plan to raise the taxes of anyone who earns $50,000 a year by $1,000, and anyone who makes $100,000 by $2,000.

Their tax hike doesn’t apply to income from investments. It doesn’t apply to any wage income in excess of $106,800 a year. It’s the payroll tax that they want to raise — to 6.2 percent from 4.2 percent of your paycheck, a level established for one year in December’s budget deal at Democrats’ insistence. Unlike the capital gains tax, or the low tax rates for the rich included in the Bush tax cuts, or the carried interest tax for hedge fund operators (which is just 15 percent), the payroll tax chiefly hits the middle class and the working poor.

In both debt plans, the wealthy win.

And when taxes come chiefly from the middle class and the poor, all those anti-tax right-wingers have no problem raising them. In an editorial, The Wall Street Journal termed the payroll tax reduction “an inferior tax cut,” arguing that tax cuts should be “broad-based, immediate and permanent.”

Broad-based? The payroll tax cut, which the Journal dismisses so contemptuously, benefits every employed American, while the tax cuts the paper champions — on capital gains and millionaires’ income — accrue to a far smaller group.

Immediate? Unlike taxes paid annually or quarterly, the payroll tax is drawn from each paycheck from the moment the law takes effect.

Permanent? The payroll tax is the tax that funds Social Security, so reducing it really can’t be a permanent policy. But the impermanence of the Bush tax cuts, which had been set to expire this year but were extended, presented no obstacle to the Journal’s fervent support for them.

This tax-Joe-Six-Pack mania doesn’t end with the Journal. While President Obama has made clear that he supports extending the lower 4.2 percent payroll tax rate for another year, to keep the economy from contracting further, congressional Republicans have made their opposition equally clear.

“I don’t think that’s a good idea,” said Dave Camp (R-Mich.), chairman of the tax-writing House Ways and Means Committee. Camp complained that it would push the deficit higher. House Budget Committee Chairman Paul Ryan (R-Wis.), the man who’d have us scrap Medicare, concurred. “It would simply exacerbate our debt problems,” he said on Fox News Sunday this month.

This concern for the debt, touching though it may be, didn’t keep Republicans from enacting two waves of tax cuts under George W. Bush. It hasn’t kept them from opposing our current president’s proposal to restore the Clinton-era tax rates on the wealthy. But when we’re talking about taxes on the majority of Americans, those who work for a living and don’t make six-figure incomes, the Republican brain lobe devoted to debt reduction through tax increases goes abuzz with synaptic frenzy.

The most telling Republican reaction to the president’s proposal to extend the lower rate has been one man’s equivocation.

The man is Grover Norquist, author of the anti-tax-increase pledge that the vast majority of House Republicans have signed. On Tuesday, pressed by a number of journalists (most prominently, the Post’s Greg Sargent) to state his position on raising the payroll tax, Norquist sought to quietly steal away.

“One would have to see the final legislation,” his spokesman, John Kartch, told Sargent, to determine “what is the net effect on total taxes.”

But unless Congress votes to extend it, the lower rate will expire on Jan. 1 regardless of its effect on total taxes. Norquist flat-out opposed letting the Bush tax cuts expire — though he did tell the Post’s editorial board that it didn’t technically violate the pledge, a position that he has since tried to obfuscate. Now that the payroll tax is slated to expire, though, Norquist is lost in contemplation (or something). Congressional Republicans inclined to increase the payroll tax — and I’m not aware of any who have come forth to oppose that idea — can do so, apparently, without fear of being labeled tax-increasers just because they’ve increased taxes.

Republicans like to complain that Democrats practice “class warfare” and “the politics of division,” as House GOP leader Eric Cantor argued (in Monday’s Post). What the Republicans’ position on the payroll tax makes high-definitionally clear is their own class warfare on working- and middle-class Americans. Their double standard couldn’t be more obvious: Tax cuts for the wealthy are sacrosanct; tax cuts for everyone else don’t really matter. Norquist, Cantor, Ryan, Camp, the Journal editorialists and the whole Republican crew give hypocrisy a bad name.



Harold Meyerson is a columnist for The Washington Post and the editor at large for The American Prospect.