Can someone explain- How does the payroll tax cut create jobs???? - New England Patriots Forums

Patsfanin Philly · 12-08-2011, 03:20 PM

Obama: More jobs in jobless benefits than Keystone | Campaign 2012 | Washington Examiner

"As Obama called for passage of those bills, he also responded to a recent Republican push to require him to approve the construction of the Keystone XL pipeline from Canada. "However many jobs might be generated by a Keystone pipeline," he said, "they're going to be a lot fewer than the jobs that are created by extending the payroll tax cut and extending unemployment insurance."

How does the payroll tax cut which only affects 2% of the Social Security tax paid by the employee, not the employer's portion create jobs?????? If it affected the portion paid by the employer and they had more money to spend on employees, I could see it but this has absolutely no effect on the amount paid by employers. The only difference is whether the 2% goes to the IRS or stays in employees pockets. Again, how does this create jobs???
I won't even try to understand how unemployment insurance creates jobs. Does it help people who are down on their luck and out of work? Absolutely. Does it create jobs???? I must have missed that concept....

JackBauer · 12-08-2011, 03:24 PM

I suggest Google

Quote:

Payroll tax cuts are one of the most cost effective ways to increase jobs. According to the CBO, every $1 million in payroll tax cuts creates 13 new jobs. Payroll tax cuts create jobs in four ways. First, some companies use the savings to reduce prices, increasing demand, which would necessitate hiring more workers to meet the demand. Second, other companies increase wages to retain good workers, who would then spend more, increasing demand. Third, some firms keep the tax savings, allowing them to buy more and increase demand. Fourth, companies that already had products in demand would use the savings to hire more workers. This fourth method is the most cost effective way to create jobs. In fact, if the payroll tax cut is only given for new hires, then every $1 million in payroll tax cuts creates 18 new jobs.(Source: CBO, "The Economic Outlook and Fiscal Policy Choices," September 28, 2010)

***IcyPatriot*** · 12-08-2011, 03:31 PM

While the amount seems small to the average person ... it actually affects the poverty line. Supposedly something like 1.5 million will fall below the poverty line without it. Also they say that money is helping the economy ... is it ??? IMO government tends to look at these percentages as having great effects on people - I don't see it but they do and they like arguing about it all the time.

PatriotsReign · 12-08-2011, 03:32 PM

Quote:

Originally Posted by JackBauer

I suggest Google

What a horrible explanation! Very few companies are willing to hire unless there is increased demand for their products/services. So they mostly just pocket the savings.

What this explanation left out is the fact that the payroll tax cut puts more money in the hands of consumers. Someone making $100k would take home $2K extra which increases disposable income which can be spent or used to pay down debt.

The surest way to increase jobs is by increasing consumer spending and this does that.

The negative is that soc sec is hurting and we need more $$ put into it. If it does in fact create jobs, the additional contributions could be greater than the actual reduction.

We'll see...

Ilikehappyppl · 12-08-2011, 03:41 PM

Payroll tax,

Well see, the more money people have the more they spend, the more they spend,the more they buy more jobs are created.

Tax breaks for the rich,

The more money they have the more they hold onto, the more they hold on to the less they spend, the less they spend less jobs are made.

DEMAND=JOBS
NO MONEY=LESS DEMAND
LESS DEMAND=LESS JOBS
MORE MONEY=MORE DEMAND
MORE DEMAND=MORE JOBS

Is it really that hard to understand?

JackBauer · 12-08-2011, 03:43 PM

Quote:

Originally Posted by PatriotsReign

What a horrible explanation! Very few companies are willing to hire unless there is increased demand for their products/services.

I can see why you'd think it's a horrible explanation. Because you clearly didn't read it.

Ilikehappyppl · 12-08-2011, 03:44 PM

Quote:

Originally Posted by PatriotsReign

What a horrible explanation! Very few companies are willing to hire unless there is increased demand for their products/services. So they mostly just pocket the savings.

What this explanation left out is the fact that the payroll tax cut puts more money in the hands of consumers. Someone making $100k would take home $2K extra which increases disposable income which can be spent or used to pay down debt.

The surest way to increase jobs is by increasing consumer spending and this does that.

The negative is that soc sec is hurting and we need more $$ put into it. If it does in fact create jobs, the additional contributions could be greater than the actual reduction.

We'll see...

lol,

Well stop borrowing money from the SS fund, to support false wars.....then we have plenty!

SS is a great program but as long as our dip****'s in office keep borrowing from it to support wars and other bull****, it will go bankrupt.

Hamar · 12-08-2011, 03:49 PM

Quote:

Originally Posted by Patsfanin Philly

Obama: More jobs in jobless benefits than Keystone | Campaign 2012 | Washington Examiner

"As Obama called for passage of those bills, he also responded to a recent Republican push to require him to approve the construction of the Keystone XL pipeline from Canada. "However many jobs might be generated by a Keystone pipeline," he said, "they're going to be a lot fewer than the jobs that are created by extending the payroll tax cut and extending unemployment insurance."

How does the payroll tax cut which only affects 2% of the Social Security tax paid by the employee, not the employer's portion create jobs?????? If it affected the portion paid by the employer and they had more money to spend on employees, I could see it but this has absolutely no effect on the amount paid by employers. The only difference is whether the 2% goes to the IRS or stays in employees pockets. Again, how does this create jobs???
I won't even try to understand how unemployment insurance creates jobs. Does it help people who are down on their luck and out of work? Absolutely. Does it create jobs???? I must have missed that concept....

The payroll cut seems more like robbing Peter to pay Paul kind of thing. The unemployment is sort of the same. inject a few extra dollars into the system at the cost of more problems down the line.

The truth is though... Each side from here on out is going to take what they want and wrap it up in some type of jobs bill. This way if it is shot down they can point at the other side and say, "See, they don't want to create jobs". The sad part of all this is the people will actually make themselves believe this crap just to stay on what they believe is their side.

PatriotsReign · 12-08-2011, 03:57 PM

Quote:

Originally Posted by JackBauer

I can see why you'd think it's a horrible explanation. Because you clearly didn't read it.

I wasn't referring to you as posting a horrible explanation, I was referring to the bit you posted from the article.

...obviously you posted the least important aspect of the tax cut's affects.

The Brandon Five · 12-08-2011, 03:58 PM

Quote:

Originally Posted by Ilikehappyppl

lol,

Well stop borrowing money from the SS fund, to support false wars.....then we have plenty!

SS is a great program but as long as our dip****'s in office keep borrowing from it to support wars and other bull****, it will go bankrupt.

It will go bankrupt anyway. Upside-down demographics guarantee it. The payroll tax is really an insurance or annuity premium. The premiums were too low for too long for too many, and now those of us born after 1965 are expected to make up the difference.

I like the idea of the cutting the payroll tax in principle (putting money in the hands of people who will actually spend or in some cases really need it), but does make the S.S. situation even worse. These are premiums. There needs to be an offset. Maybe raise the earnings limit?