Reducing The Payroll Tax As A "Jobs Creator" Perfectly Illustrates What's Wrong With Democrat Thinking

The "Payroll Tax Reduction" is one of the major tax reductions that Democrats support. But there are THREE HUGE PROBLEMS with their claim that it creates jobs.

Problem #1: IT IS NOT A JOBS CREATOR! Reducing the payroll tax does NOT increase businesses' profits and therefore does NOT give them more money with which to hire people. What's reduced is the amount employees pay into Social Security and Medicare. The payroll tax is money the employer withholds from its employees and sends to the government. It is NOT the company's money. The employees get a bigger paycheck but it has no direct effect on the employers' profits nor therefore on their ability to hire more people. It is NOT a jobs creator for the companies who send less money to the government because its their employees' money that's no longer sent to the government, not the employers' money.

Problem #2: TO THE EXTENT THAT THIS INCREASE IN TAKE-HOME PAY IS SPENT BY EMPLOYEES AND THEREFORE GIVES SOME COMPANIES MORE PROFITS FROM INCREASED SALES, IT DOES NOT LEAD THOSE COMPANIES TO HIRE PEOPLE! This tax reduction is clearly temporary. What Democrats don't seem to understand is that temporary tax reductions don't help create very many jobs. The reason: Employers may have more money (from higher profits on increased sales) but they know two things about that. First, next year when the tax returns to normal levels people will stop spending more so the companies' sales will go back down. Second, the consequence of that is, if the company hired more people while the payroll tax was decreased, they'll have to fire those whom they hired whent the tax goes back up. This is the pitfall of temporary tax decreases (regarding jobs creation) that Democrats completely don't get. TEMPORARY TAX DECREASES DO NOT INSPIRE COMPANIES TO HIRE MORE PEOPLE BECAUSE THEY KNOW THEY'LL JUST HAVE TO FIRE THEM ONE YEAR LATER WHEN THE TAX GOES BACK UP. No manager with an ounce of common sense will hire people when he/she knows he/she will have to fire them a year later!!! What is so hard to understand about this?

Problem #3: THIS TAX REDUCTION MAKES THE SOCIAL SECURITY AND MEDICARE SOLVENCY PROBLEM WORSE! This is not a free money tax reduction. It has consequences. Since this payroll tax money is what supports Social Security and Medicare, federal revenue into Social Security and Medicare DECREASES!!! What is it about this that Democrats don't understand? When they decrease the payroll tax they make the Social Security and Medicare insolvency happen SOONER!

This perfectly illustrates the most key difference between Democrat and Republican approaches to stimulating the economy. Republicans know that a temporary tax reduction does not create jobs!!! Watch the kinds of tax increases or decreases that each party supports. Democrats like temporary tax reductions (erroneously thinking that creates jobs when it doesn't) and permanent tax increases (to fund more and more entitlements regardless of the fact that entitlements are sucking the financial life out of our economy). Republicans like the opposite ... permanent tax reductions and only temporary tax increases for reasons and logic stated above. The Republican approach creates private sector jobs and reduces government jobs. That is simple fact. The Democrat approach reduces private sector jobs and increases government jobs ... which in turn creates a permanent bigger tax burden on citizens to pay for those government jobs. That is also simple, logical fact.