Yglesias

Payroll Tax Cuts as Stimulus

CREDIT:

It seems that J.M. Keynes himself thought this was a good idea. And, indeed, it strikes me as indefensible that a stimulus package featuring hundreds of billions of dollars of tax cuts doesn’t include any FICA provisions. Payroll tax cuts wouldn’t be my first choice of stimulus measures, but there’s a strong case for including some tax-side measures in the package and they’d probably be my first choice of tax cuts to include. But the key conceit shared by right and center in the congress seems to be that it’s crucial to avoid spending any stimulus money on helping people in financial need, so this is what you get.