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View Diary: Dayen, WaPo blog: Did U.S. just implement more severe austerity measures than Great Britain, Spain? (86 comments)

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  •  The expiration of the payroll tax holiday (2+ / 0-)
    Recommended by:
    greenearth, divineorder

    is going to produce roughly twice as much revenue as the modest increase in income tax rates for the rich and super-rich will.

    Taking an additional 2% of income from the working and middle classes -- that have already seen their incomes decline some 8% over the course of this recession -- is an austerity measure, there's no way around it. Continuing to reduce the disposable income of the working and middle classes reduces demand which has a negative effect on the rest of the economy -- which should be obvious by now.

    The payroll tax holiday could have been extended or another means could have been found -- such as "Making Work Pay" -- to make up the shortfall in working and middle class disposable incomes due to the expiration of the payroll tax holiday, but it wasn't done, nor -- apparently -- was it considered more than momentarily.

    So. Over the next ten years, the working and middle classes will be paying an additional $1.2 trillion or so in taxes (and will have that much less disposable income) than they might otherwise. Thankfully, Our Betters will be paying somewhat less in additional taxes. We wouldn't want to put a crimp in their Job Creation after all.

    Blogging as Ché Pasa since 2007.

    by felix19 on Fri Jan 04, 2013 at 02:58:40 PM PST

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