Payroll tax cuts are going to be the hub of Obama's plan? Since when are the unemployed on payroll?

[Cali_Democrat]

If the whole purpose of Obama's jobs plan is to help the unemployed, what exactly is a payroll tax cut gonna do for them when they aren't even on a company's payroll? Am I off base here?

http://www.msnbc.msn.com/id/44440892/ns/business-eye_on_the_economy

Don't we actually have to help the unemployed? The people who aren't on payroll? :shrug:

Edit...Update...Question:

If the payroll tax cut is already an existing program, how exactly will extending it reduce unemployment when the program is already active and unemployment is still extremely high?

[TwilightGardener]

1. Stimulus,more buying power, boost spending, increase demand.

[emulatorloo]

2. Yes, and with increase demand, increase need to hire more workers to meet the demand

[TwilightGardener]

4. Yes, thanks for the logical conclusion I left out. Also, I think the cuts are going to be

on the employer side too, to encourage hiring--might be wrong though.

[Crazy Dave]

12. Employers aren't going to hire unless there's demand for their product or services n/t

[Inuca]

16. Yes

there are supposed to be cuts on the emplyer side as well.

[TheWraith]

24. And combine that with unemployment extension, and ending corporate tax loopholes...

Keep the unemployed eating (which by the way is HIGHLY stimulative, since they need the money and will spend it), and make it no longer profitable for companies to hold onto cash. Make it more profitable for those companies to spend it, hiring people and driving activity.

[Cali_Democrat]

3. Read the link

There will be little new stimulus proposed according to the article.

[emulatorloo]

9. "according to the article" Guess I will wait an hour to hear the speech, it is not that far off

[Cali_Democrat]

14. A lot of people in this forum and others are posting "reports" of what the plan is

I hope you say the same thing to them.

[emulatorloo]

32. LOL, I don't have time to read every thread on DU. I guess you can tell them for me?

:toast:

Watching the end of Reverend Al now, so I am out of here. Speech coming up after that.

[TwilightGardener]

11. I think it's one of the few types of stimulus that might be passed at this point.

[ProSense]

15. Hmmmm?

"Read the link"

<...>

“If (the payroll tax cut) is standing alone, I think that might have some success,” said Sen. Orrin Hatch, R-Utah. “If it's lumped in with a whole bunch of big spending programs that builds Washington at the expense of the rest of the economy he’s not going to have much support from me or any other Republican.”

<...>

At nearly $200 billion, extending payroll tax cuts and long-term unemployment insurance would consume the bulk of the president’s proposals. But because these tax breaks and jobless benefits are already in place, they wouldn’t provide any new stimulus.

<...>

"Anything that would be of a big enough size to really help the labor market is going to have trouble getting through Congress," says Michael Hanson, senior economist at Bank of America Merrill Lynch. "And anything that can get through Congress will be too small to be much help."

That’s why many observers see Obama’s job package as primarily an exercise in politics, not economics.

<....>

Since the number is wrong and Hatch and a BoA economist are the only ones quoted in the article, maybe it would be a good idea to wait 35 minutes for the actual speech.

[Cali_Democrat]

18. hmmm?

What I said:

"There will be little new stimulus proposed according to the article"

Since when is extending payroll tax cuts and unemployment insurance new stimulus?

[Inuca]

21. Depends on the definition I guess

and I am most definitely not an economist. But Rachel Maddow for instance claims that these kind of of revenue are the most (or among the most) stimulative because the extra $s are spent (not saved) and therefore generate demand.

[ProSense]

22. Hmmmm?

"Since when is extending payroll tax cuts and unemployment insurance new stimulus?"

Since before the RW kept dissing UI as stimulus. Both programs are stimulative, both are schedule to expire, and both are progressive.

Think progress:

[Cali_Democrat]

23. Hmmm?

But it certainly isn't new stimulus. It's an extension of existing payroll tax cuts and UI benefits.

[ProSense]

25. Um

"But it certainly isn't new stimulus. It's an extension of exiting payroll tax cuts and UI benefits."

what?

If it expires, a new stimulus package is required to keep it going. Are you anticipating that the programs will keep going if they're not extended?

[Cali_Democrat]

33. Um

It's an extension of existing programs, not new stimulus. The author of the article agrees with me as well when he says "Proposals would extend existing programs, offer little new stimulus."

What's also interesting is that these programs have been in place for a while now and the unemployment rate is still 9.1% and many millions are still unemployed. Doing the same thing and expecting a different result is insanity.

[ProSense]

37. Do

"It's an extension of existing programs, not new stimulus."

...you understand why unemployment is stimulative? When the EITC was extended, did it lose its stimulative impact because it was an existing program?

The program doesn't lose its stimulative effects because it was used before. If Congress fails to extend it, the stimulative effects end. Stimulus is not an ongoing intangible thing. It requires funding targeted to specific programs.

Seriously, read the Think Progress piece, and venture on over to the EPI site and do some research.

[TwilightGardener]

26. What tune is everybody humming?

[ProSense]

28. It's the new

campaign song!

The team to beat: Distortion/Willful Ignorance 2012

Campaign slogan: Working hard to confuse the issue so you don't have to!

:)

[TwilightGardener]

31. ...

:-)

[DJ13]

5. The scripted answer by the faithful will be "it might increase spending"

But the flaw in using payroll tax cuts to stimulate spending is that it only gives a significant stimulus to those who make the most money.

It doesnt help the unemployed, nor those working part time or in low paying jobs, which are the very people who MOST need the additional money to spend.

[TwilightGardener]

8. I think unemployment benefits are to be in the package as well.

[Inuca]

20. Well... it happens to be true

whether you are a "faithful" or not. And AFAIK almost everybody (not the unemployed) pay the SS FICA tax, which is what the payroll tax is. So it WILL help those with low paying jobs.

[TheWraith]

27. Actually, if you're unemployed, you STILL pay FICA taxes.

You pay payroll tax on your unemployment benefits. Yes, seriously.

[dkf]

36. I've never heard that before. Is it deducted?

[TheWraith]

39. Yeah, automatic deduction, same as federal taxes.

At least, that's how it's handled here in New York. I can't speak to other states.

[Inuca]

41. Did not know that

never been there, knock wood.

[sad sally]

43. That's not true. You may owe federal income tax or state income tax (depending on state

you live in, but no fica contributions are taken from unemployment benefits; there's no employer paying them either if you're not employed.

However, the government does not consider unemployment benefits to be "earned income," so they are not subject to FICA taxes.

Read more: Is FICA Deducted From Unemployment Benefits? | eHow.com http://www.ehow.com/info_8373094_fica-deducted-unemployment-benefits.html#ixzz1XQNlHA1K?du

[dkf]

35. Payroll taxes start at the first dollar so anyone who earns a wage gets something.

[Ineeda]

6. Can't we wait and see? n/t

[Cali_Democrat]

10. Of course

[panader0]

7. Amen.

I'm no economist but I would guess that the payroll tax cut will effect the amount of monies paid into the Social Security fund. No? Won't this just have to be paid back later?
Just tax the rich, end the wars, cut the "defense" budget. The money spent on wars is totally wasted, as are the lives of our servicepeople and those they are ordered to kill.

[Autumn]

19. I don't think anyone in power is be smart

enough to figure that out, and perhaps some of them are too corrupt to do that.

[DemocratSinceBirth]

13. Cant' Hurt But This Whole Plan Looks Like Weak Sauce And Won't Be Passed Anyway

.

[emulatorloo]

30. What plan? Speech doesn't happen for another 30 mins.

All we have so far is speculation.

[Sheepshank]

17. Oooohh good one. Obama didn't know about that clever little lop hole *roll eyes* n/t

[JoePhilly]

29. Obama hates the unemployed!!!!

:sarcasm:

[Arkana]

34. So we provide incentives for companies to hire the long-term unemployed.

[rocktivity]

38. Keith mentioned that last night.

How the heck are MORE tax cuts going to reduce the deficit?

:headbang:
rocktivity

[Name removed]

40. Deleted message

Message removed by moderator. Click here to review the message board rules.

[woolldog]

42. Boosting aggregate demand....

supposedly....I'm notagainst it but I'm notthrilled about it either