Monday, August 29, 2011

Al Franken Calls for Extension of Payroll Tax Holiday

He has his economics a little wrong, but better economic confusion that leads tax cuts than tax increases.

Franken is calling for an extension of the payroll tax holiday. The law that lowered the payroll tax from six-point-two to four-point-two percent expires in January.

Franken says it benefits mostly middle and low-income working Americans. He says he hopes Congress can come to a bipartisan agreement to keep the payroll tax holiday in place for another year.

This is all correct, but he also says the tax cuts create demand for goods which creates jobs. It is only savings that create jobs. If a tax payer gets the tax cuts and the owner pockets the money from any sale, rather than investing it. There will be fewer jobs.

Keynesian propaganda to the contrary, savings-investment grows an economy not consumers devouring goods until there are none left.

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