It’s generally considered one of those truths that’s so obvious, it’s simply taken as a given: Republicans love tax cuts. They especially love business tax cuts. What could possibly make GOP leaders oppose one of their own tax-cutting ideas?
President Obama’s support.
As part of the debt-reduction talks, Democrats, who haven’t lost sight of the struggling economy, desperately want to include some measures in the compromise that might give the economy a short-term boost. Knowing that Republicans won’t even consider public investment of any kind, Dems have been reduced to seeking a simple payroll tax cut, an idea the GOP has long championed. It’s not the most effective idea — Republicans adamantly reject the most effective policies — but it’d be better than nothing.
Here’s how Sen. Jon Kyl (R-AZ) — until recently the principle GOP negotiator in the debt fight — explained his newfound opposition to the idea.
“My view generally is that if you can leave more money in the private sector it’ll be easier for a recovery to occur,” he said. “Now — if you — there’s been talk about matching the one that was given to employees with one for employers, that would leave more money for the employer to hire and invest. So it could well help businesses be in a financial position to hire more people and begin to expand. The problem is that a payroll tax is supposed to fund couple of our entitlement programs, and since it wouldn’t be able to do that we’d have to get that money from general revenues, so that puts more pressure on general revenues and makes it more difficult for all the other things we’re trying to fund. So, the answer to your question is yes it might help business, but I’m not sure that its overall impact might not be as positive as we think given the pressures on all the other programs that rely on general revenues.”
To summarize, Jon Kyl, the second highest ranking Republican in the Senate, believes a payroll tax cut, which he’s long supported, might help create jobs. But he’s against it anyway because he now thinks the Republican idea would be too expensive.
A year ago, this same Jon Kyl proudly proclaimed, “You do need to offset the cost of increased spending, and that’s what Republicans object to. But you should never have to offset cost of a deliberate decision to reduce tax rates on Americans.” In other words, as far as Kyl’s concerned, policymakers shouldn’t even try to pay for tax cuts.
Kyl has apparently changed his mind, now that Obama wants the same tax break for businesses that Republicans have supported for years.
When we talk about the GOP’s seemingly inexplicable motivations, Kyl’s shift becomes that much more important. Republicans are actively opposed to any ideas, even their own, that might help give the economy a boost. They are, however, equally enthused in support of ideas that are likely to hold the economy back.
I wonder why that is.