Social Security Tax Cut?
By Arnold Kling
A proposal from former Labor Secretary Robert Reich:
The best and the fastest way to get more money into the pockets of people who are likely to spend it quickly is to cut the taxes of average working people. Most people pay more in payroll taxes — primarily for Social Security and Medicare — than they do in income taxes. So a temporary cut in payroll taxes — say, by exempting the first $15,000 of income from payroll taxes — would put an extra $1,200 into most working people’s wallets this year alone. And because businesses wouldn’t have to pay their portion of that payroll tax, they’d be encouraged to keep more workers on the payroll.
…The best way to make sure Social Security is there for boomers is to get this economy moving again, as quickly as possible.
For Discussion. How would the fact that the proposed tax cut is temporary reduce its demand-side and supply-side stimulus?