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Thread: Obama Team Eyes Employer Payroll Tax Break

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    Re: Obama Team Eyes Employer Payroll Tax Break

    Quote Originally Posted by rocket88 View Post
    I think it's interesting how Obama looks at cutting taxes, and suddenly Bloomberg (the media company, not necessarily the man) thinks it's a bad idea.
    go check sutherlands post and get back to us.

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    Re: Obama Team Eyes Employer Payroll Tax Break

    I think it's a great idea. We all want businesses to hire more people, so let's stop taxing them when they do. I'd love to see a two-year holiday for payroll taxes.
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    Re: Obama Team Eyes Employer Payroll Tax Break

    My biggest problem with this is its not going to do what they want it to do.

    Lets say you're going to get a $100 a month raise after taxes from your job. You're much more likely to go and sign up for that $75 a month cell phone plan you were wanting, because its not affordable to you to purchase while still giving you a little extra "non-obligated" spending cash from your pay check.

    However, if you get a one time $100 or $200 bonus, you're not likely to sign up for that plan. Why? Because while you'd have the extra money to pay for it now, your bonus money is going to run out soon and you're stuck again with not having enough to afford it.

    People aren't hiring because the costs to hire are too high, and the POTENTIAL costs of hiring due to Obama care are even higher. Giving a short term, temporary, small increase isn't going to spur hiring because business aren't stupid and realize that a short term savings isn't going to help with someone they have to bring on long term.

    At most it may help the economy a tad bit as people get more money will hopefully spend some of it...but its effect on the actual unemployment rate and businesses hiring new employees will be small if not negligable. Maybe if its at least a 2 year temporary cut, but anything less than that is worthless. And even 2 years is just setting things up to be problematic again in the near future and is nothing but a political ploy to push the problem till after the next election.

    Want to actually spur it? Drop it officially the same amount they want to do it "temporarily", and if we reach a time where they feel its no longer needed let them attempt to raise it officially as well.

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    Re: Obama Team Eyes Employer Payroll Tax Break

    Quote Originally Posted by Whovian View Post
    go check sutherlands post and get back to us.
    The hour hasn't even reached double digits yet, you can't expect me to read.

    But I did now. I thought he was giving us a summary of the article. Fine, I still think cutting payroll taxes is a good idea. In fact, I 'd agree with getting rid of any taxes on any activity related to business growth. While I'd agree with raising the tax rate on higher incomes, that should be restricted to a person's actual income that they take home. Any money that a business owner spends on making his business better (especially if they are expanding) should go untaxed.

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    Re: Obama Team Eyes Employer Payroll Tax Break

    first off, it kind of smells of political pandering.. timing is everything

    in my humble opinion, any form of stimulus should be delved out with prerequisites. As we saw with the last one they dont work otherwise.
    massachusetts used theirs to tackle totally unrelated fiscal problems with the claim it "saved" jobs. my guess is this happened accross the board as very little impact to unemployment occurred.

    the states, or businesses should be made to apply for stimulus money, with proof that it will go toward infrastructure jobs and or direct job creations in the private sector..
    Not to pay off union sponsored promises not fullfilled in the anual budget.

    Masssachusetts should be made poster boy for stimulus wasted
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    Re: Obama Team Eyes Employer Payroll Tax Break

    Quote Originally Posted by StillBallin75 View Post
    Isn't Obama supposed to be an evil anti-business socialist communist Maoist Stalinist Marxist foreigner?
    Quote Originally Posted by rocket88 View Post
    I think it's interesting how Obama looks at cutting taxes, and suddenly Bloomberg (the media company, not necessarily the man) thinks it's a bad idea.
    Which brings me to this point from the OP...

    ...a temporary cut in the payroll taxes businesses pay on wages...
    So, let me get this straight...

    Pundits get upset with President Obama because they believe he's this "big government/tax and spend" kinda guy. But when his Administration proposes cutting one of the largest taxes businesses face - the payroll tax - suddenly it's a bad idea and he's still moving in the wrong direction?

    Really, people? Really?

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    Re: Obama Team Eyes Employer Payroll Tax Break

    Quote Originally Posted by donsutherland1 View Post
    From Bloomberg.com:



    Obama Team Eyes Employer Payroll Tax Break - Bloomberg

    That the White House is considering another round of stimulus is not too surprising given the persistent high rate of unemployment that is threatening to bump up against the 2012 electoral calendar. IMO, this stimulus should not be adopted for a number of reasons:

    1. It would further exacerbate the nation's long-term imbalances, not just a short-term increase in the budget deficits, as it would increase the long-term unfunded liability associated with Social Security.

    2. It would undermine any credibility of any fiscal consolidation agreement that might be attached to an increase in the debt ceiling.

    3. In macroeconomic terms, it would have only a marginal to small impact. First, the multiplier with such stimulus is well below 1. That means every dollar of this form of stimulus would yield less than a dollar increase in the GDP. Second, hiring depends on expectations about sustained increases in macroeconomic demand that productivity/capital investment cannot accommodate, making it necessary for firms to expand payrolls (a recurring expenditure). Third, companies remain especially risk averse coming out of the financial crisis/recession. Hence, savings from the payroll tax reduction would far more likely be used to bolster cash than to lead to a dramatic increase in new hiring.
    So. Let's see. "Lowering taxes doesn't stimulate the economy unless we say it does." Lower regular tax rates! Not payroll taxes that are already propping up a failed program...
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    Re: Obama Team Eyes Employer Payroll Tax Break

    Quote Originally Posted by Zyphlin View Post
    My biggest problem with this is its not going to do what they want it to do.

    Lets say you're going to get a $100 a month raise after taxes from your job. You're much more likely to go and sign up for that $75 a month cell phone plan you were wanting, because its not affordable to you to purchase while still giving you a little extra "non-obligated" spending cash from your pay check.

    However, if you get a one time $100 or $200 bonus, you're not likely to sign up for that plan. Why? Because while you'd have the extra money to pay for it now, your bonus money is going to run out soon and you're stuck again with not having enough to afford it.

    People aren't hiring because the costs to hire are too high, and the POTENTIAL costs of hiring due to Obama care are even higher. Giving a short term, temporary, small increase isn't going to spur hiring because business aren't stupid and realize that a short term savings isn't going to help with someone they have to bring on long term.

    At most it may help the economy a tad bit as people get more money will hopefully spend some of it...but its effect on the actual unemployment rate and businesses hiring new employees will be small if not negligable. Maybe if its at least a 2 year temporary cut, but anything less than that is worthless. And even 2 years is just setting things up to be problematic again in the near future and is nothing but a political ploy to push the problem till after the next election.

    Want to actually spur it? Drop it officially the same amount they want to do it "temporarily", and if we reach a time where they feel its no longer needed let them attempt to raise it officially as well.
    I think people aren't hiring because there is insufficient demand to justify additional employees. If people aren't buying the TVs you're building already, there's no reason to hire more TV builders or sellers.
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    Re: Obama Team Eyes Employer Payroll Tax Break

    Quote Originally Posted by shades View Post
    first off, it kind of smells of political pandering.. timing is everything

    in my humble opinion, any form of stimulus should be delved out with prerequisites. As we saw with the last one they dont work otherwise.
    massachusetts used theirs to tackle totally unrelated fiscal problems with the claim it "saved" jobs. my guess is this happened accross the board as very little impact to unemployment occurred.

    the states, or businesses should be made to apply for stimulus money, with proof that it will go toward infrastructure jobs and or direct job creations in the private sector..
    Not to pay off union sponsored promises not fullfilled in the anual budget.

    Masssachusetts should be made poster boy for stimulus wasted
    I can appreciate a lot of what you said, but think that any further Stimulus at this point is a waste. I felt that the first Stimulus was a waste, as it was nothing but bastardized Keynesian, and Keynesian Economic has been debunked, and without any noted success anywhere, for decades.

    What I believe was that the Obama team assumed that we would pull out of the Recession ragardless. Regardless of the waste that was Stimulus. Regardless of the cost burden that would be Obamacare. Regardless of massive Unemployment extensions. We always had pulled out of prior Recessions in 12-24 months, and the deeper the Recessions had been, the stronger the recoveries. With that as the expectation, Stimulus was one big hacked-up gift program for municipal unions and political power bases, and over 2/3rds of the money went to districts predominantly Democrat.

    Except they guessed wrong. Hoped wrong. Made the problem so exponentially worse.

    Only massive changes in our budget can save us. Obamacare repealed. Restructuring of Medicare and Social Security. From the average Joe to the king pins of Wall Street, America has to stop this mad dash off a cliff. As for "Stimulus", there's $2 trillion and then some waiting on the sidelines of business, looking for certainty that government will stop the suicide. That is yoru Stimulus waiting to happne ... good old fashioned Capitalism.

    As Obama despises Capitalism, and sees the Private Sector as the enemy (his words), it won't happen while he is President. These little bugger flicks are nothing more than that.

    Obama must go. Don't know if we can survive that long regardless.

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    Re: Obama Team Eyes Employer Payroll Tax Break

    Quote Originally Posted by Zyphlin View Post
    My biggest problem with this is its not going to do what they want it to do.

    Lets say you're going to get a $100 a month raise after taxes from your job. You're much more likely to go and sign up for that $75 a month cell phone plan you were wanting, because its not affordable to you to purchase while still giving you a little extra "non-obligated" spending cash from your pay check.

    However, if you get a one time $100 or $200 bonus, you're not likely to sign up for that plan. Why? Because while you'd have the extra money to pay for it now, your bonus money is going to run out soon and you're stuck again with not having enough to afford it.
    Only in the specific example of a long-term purchase like a cell phone plan. People can and will buy one-time purchases like new televisions.

    Quote Originally Posted by Zyphlin
    People aren't hiring because the costs to hire are too high, and the POTENTIAL costs of hiring due to Obama care are even higher. Giving a short term, temporary, small increase isn't going to spur hiring because business aren't stupid and realize that a short term savings isn't going to help with someone they have to bring on long term.
    One of those high costs is the payroll tax that businesses contribute, so reducing it WILL spur hiring. I don't see what the Affordable Care Act has to do with anything, since the cost to employers is a benefit to the employees (unlike payroll taxes). In any case, it isn't going anywhere so that's a moot point.

    As for bringing them on long term...there are a lot of businesses that don't operate on that business model anyway. If the cost of employing someone right here and now is reasonably low, there are plenty of businesses that will do so. Not every business plans for you to be there for the next 30 years; indeed, there is a lot more long-term uncertainty in the business environment than just the payroll tax. There always is.

    Quote Originally Posted by Zyphlin
    At most it may help the economy a tad bit as people get more money will hopefully spend some of it...but its effect on the actual unemployment rate and businesses hiring new employees will be small if not negligable. Maybe if its at least a 2 year temporary cut, but anything less than that is worthless. And even 2 years is just setting things up to be problematic again in the near future and is nothing but a political ploy to push the problem till after the next election.

    Want to actually spur it? Drop it officially the same amount they want to do it "temporarily", and if we reach a time where they feel its no longer needed let them attempt to raise it officially as well.
    The best way to make it sustainable is to eliminate it, and increase income taxes proportionally so that it's revenue-neutral. With unemployment over 9%, there are a lot more people willing to work than people willing to hire them, so it makes more sense to tax people on the money they earn than to tax employers on the people they hire.
    Last edited by Kandahar; 06-09-11 at 12:01 PM.
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