Decoding the Payroll Tax Debate [radio interview - KPFK]

This morning I appeared on KPFK's Uprising program with Sonali Kolhatkar to discuss the "payroll tax holiday" debate now going in the Senate.

There's a lot of confusion around this issue. For one thing, the general public always struggles to understand numbers, finance, and taxation. In this case the confusion's even worse because the Democrats chose to use this tax, rather than other options, as the mechanism for their tax break. That creates some unfairness, makes it a less efficient form of stimulus, and endangers Social Security politically.

Cutting the payroll tax helps people earning under $106,000 or so, but it offers the biggest savings to those on the upper end of that spectrum. That tax break can come to more than $4,000 for a two-earner couple if both spouses earn a six-figure income. As a result, those savings are given to everyone above those earning levels as well. That means that, on average, the "1%" will get a much bigger tax break than the "99%" will.

And it's dangerous to target Social Security's funding source to provide any sort of tax "holiday," for reasons we outlined here. It would be disastrous for the middle class if this tax cut expired, but we need to keep a wary eye on the Dems while fighting the GOP's nihilistic approach. She quoted my line from an earlier post: "It's a choice between the inadequate and the insane."

We tried to explain this complex topic in a minute or two - let us know how we did! - and then had a good conversation with Sonali. The clip is below:

Play Uprising KPFK

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