Thursday, December 15, 2011

Having Our Cake And Eating It Too: An Amateur Question About The Payroll Tax Gridlock

I am not a political scientist and am even less of an economist, so this is just the naive question of an amateur.

We want to continue the tax cut for working people not just for their direct benefit but to stimulate demand for the sake of the whole economy. Everyone agrees on that. The question is how to pay for it.

The leading proposal is a tax surcharge on the rich. The objection is that if the rich have less disposable income, they will not invest in businesses that would employ people. That may or may not be true, (we gave the largest most powerful banks all that bailout money thinking they would actually loan it to small businesses -- didn't happen) but let's assume it is true. The rich need more money so they can invest in job creating businesses.

Other recent news stories disclose that the richest 1% of the nation contributes a ludicrous amount of money to fund political campaigns -- way, way disproportionate to the rest of us, more money than average people earn all year.

So here's what I am wondering. If we extended the tax cut for working people and paid for it by a surcharge on the rich, maybe we could put a cap on individual campain contributions. Then instead of bearing the unfair and noxious burden of paying for all those annoying tv ads, the rich could use the money they save to invest in businesses that create jobs.

My idea is no doubt unconstitutional, but by the time that issue gets to the Supreme Court, the economy will have been saved and everyone will be happy. But what do I know?

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