Yesterday, progressive Senator Jan Schakowsky (D-Ill.) proposed a deficit reduction plan that further validates the widespread disgust over our left-wing federal government. Her plan involves, among other things:
Keeping Social Security benefits intact, making deep reductions at the Pentagon and raising corporate taxes to target profits and excessive pay for chief executives.
Schakowsky’s plan would omit the cap on the payroll tax for employers and lift the threshold above the current $106,800 for employees. And she would impose a “legacy tax” of as much as 4 percent on earnings above the cap.
Finally, Schakowsky’s plan calls for an additional $200 billion in economic stimulus over the next two years to create jobs and combat unemployment.
What we really need is a payroll tax holiday, not a payroll tax increase. In terms of economic growth, a payroll tax holiday provides the 2nd highest bang-for-your-buck stimulus of any available tax policy option, trailing only the establishment of a job tax credit. Instead of proposing a productive policy to assist the economy, Schakowsky plans to enact a second stimulus spending package to incite economic growth. Her proposal calls for the federal government to “create jobs and combat unemployment.” Wasn’t that the exact goal of the first stimulus? And yet, here we sit with unemployment stagnant at 9.6%. It shows no signs of dropping any time soon.
Additionally, it bears repeating the Jan Schakowsky actually proposed an increase to our debilitating corporate tax rate. There is no reasonable rationale supporting the ability of this tax increase to promote economic growth. She also wants to end the Bush tax cuts for the wealthy and ratify cap and trade legislation. Yes, she actually wants to sign cap and trade regulation into law, establishing an emissions tax that would greatly reduce industrial efficiency. She wants to pull us out of a recession by imposing stringent regulations on the corporations that provide job growth to our private sector, tax individuals who have been successful in industry, and increase government spending after an election that served as a referendum against government waste.
This proposal represents the distorted viewpoints of most progressive Democrats. If the midterm elections proved anything, it was that the general populace is opposed to a left-wing agenda. Obama and the Democrats have never understood this sentiment. The policy has no chance to be implemented, thank god. But it is disturbing that it is actually being mentioned as a viable deficit reduction initiative, and it further emphasizes the need for a right of center government.