the permanence of the temporary...
Posted by
x (aka dmuck)
Dec 9 '10, 06:39
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"While supporters argued that the deficit-busting tax cuts were authorized only on a temporary basis, economists noted that it's common for dozens of special tax provisions to reach expiration dates every year, only to be quietly extended � sometimes at the behest of affected interest groups and sometimes because large segments of the public have come to expect them.
These include tax credits or deductions for research and development, mortgage interest and education expenses.
"It's absolutely a worry," said Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center. "If you just go by history, these things come up every year and Congress renews them every year."
Obama has said repeatedly that the country cannot afford to continue the Bush administration's income tax cuts for the wealthy, but in the end, the president agreed to keep those cuts going � as well as those for all Americans � for an additional two years.
In exchange, Republicans agreed to support a 13-month extension of aid for long-term unemployed workers and a one-year reduction in Social Security payroll taxes.
The cut in payroll tax deductions will cost the government $120 billion. It effectively translates into a 2% pay raise for most U.S. workers: A worker with a typical taxable income of $40,000 would take home $800 more over the course of the year.
The White House said the payroll tax cut wouldn't hurt the Social Security fund because the deal would provide a transfer of general revenue into the fund for the elderly. But that simply means the government will be moving money from the left hand to the right � money it gets only by deficit spending.
"It's all going to be put on the government credit card," Williams said.
Moreover, though touted as a one-year measure, the payroll tax cuts will come up for renewal as the 2012 presidential election campaign shifts into high gear."
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